June 30/OPTIONS EXPIRY FINALLY OVER/CHINA FURIOUS AT THE USA FOR SALE OF $1.4 BILLION IN ARMS TO TAIWAN/3 USA STATES IN PRECARIOUS POSITION AS THEY HAVE NOT PASSED THEIR BUDGET: ILLINOIS,CONNECTICUT/MAINE/TRUMP GOES AGAINST HIS CABINET AND WISHES TO UNLEASH A GLOBAL TRADE WAR BY INITIATING TARIFFS/TRUMP CALLS FOR THE COMPLETE REPEAL OF OBAMACARE WITHOUT A NEW “TRUMPCARE”/

GOLD: $1240.70  DOWN $3.50

Silver: $16.57  DOWN 2  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

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SECOND SHANGHAI GOLD FIX: $1252.00.25

NY GOLD PRICE AT THE EXACT SAME TIME: $1243.90

Premium of Shanghai 2nd fix/NY:$8.10

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LONDON FIRST GOLD FIX:  5:30 am est  $1243.25

NY PRICING AT THE EXACT SAME TIME: $1244.10???  

LONDON SECOND GOLD FIX  10 AM: $1242.25

NY PRICING AT THE EXACT SAME TIME. $1242.45   

For comex gold:

JULY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  30 NOTICE(S) FOR 3000  OZ.

TOTAL NOTICES SO FAR: 30 FOR 3000 OZ    (.0933 TONNES)

For silver:

JULY

 878 NOTICES FILED TODAY FOR

4,390,000  OZ/

Total number of notices filed so far this month: 878 for 4,390,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY FELL BY ONLY 1895 contract(s) DOWN to 200,885 DESPITE THE  FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 16 CENT(S). BUT MORE IMPORTANT WE HAVE NOT WITNESSED ANY OBLITERATION OF OPEN INTEREST AS WE ENTERED FIRST DAY NOTICE IN THE ACTIVE SILVER COMEX MONTH OF JULY. AS AN EXAMPLE, AS WE APPROACHED THE ACTIVE MONTH OF MAY WE HAD OBLITERATION OF AROUND 7,000 CONTRACTS ON EACH OF THE LAST 3 DAYS BEFORE ENTERING FIRST DAY NOTICE.

 In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0040 BILLION TO BE EXACT or 144% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 878 NOTICE(S) FOR 4,390,000  OZ OF SILVER

In gold, the total comex gold SURPRISINGLY ROSE BY 116 CONTRACTS DESPITE THE FALL IN THE PRICE OF GOLD   ($3.30 with YESTERDAY’S TRADING). The total gold OI stands at 452,684 contracts.

we had 30 notice(s) filed upon for 3000 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  1895 contracts  DOWN TO 200,885 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (DOWN 16 CENTS).We LOST A FEW AS JUST ABOUT  EVERYBODY ELSE 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. IT DID NOT HAPPEN IN JULY!!

(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 THURSDAY night/FRIDAY morning: Shanghai closed UP 4.36 POINTS OR 0.14%   / /Hang Sang CLOSED DOWN 200.84 POINTS OR 0.77% The Nikkei closed DOWN 186.87 POINTS OR 0.92%/Australia’s all ordinaires CLOSED DOWN 1.57%/Chinese yuan (ONSHORE) closed UP at 6.7807/Oil UP to 45.34 dollars per barrel for WTI and 47.98 for Brent. Stocks in Europe OPENED ALL IN THE GREEN,,   Offshore yuan trades  6.7796 yuan to the dollar vs 6.7807 for onshore yuan. NOW THE OFFSHORE IS MUCH STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH  STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)China’s pMI for mfg and service unexpectedly rise despite employment contraction. This is due to the after-effects of that large stimulus orchestrated by POBC at the start of the year:

( zero hedge)

ii)China is furious with the USA over the sale of $1.4 billion in weapons to Taiwan

( zero hedge)

4. EUROPEAN AFFAIRS

The Eurozone inflation numbers beat expectation of 1.3% from May’s 1.4% but ahead of consensus 1.2%. The bankers are always trying to inflate themselves out of their mess.

( zero hedge

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Qatar/USA/Iran/USAHegemony/

One of the best articles I have seen on the Qatari issue. The real contention is not that Qatar is supporting terrorism but that fact that Qatar has no choice but to face east and supply China with their huge gas fields.  China is paying Iran in yuan for oil so it is understandable why the USA is extremely worried.  The petrodollar scheme just got a knife thrown into its heart.

a must read..

( Darius Shahtahmasebi/AntiMedia.org)

6 .GLOBAL ISSUES

7. OIL ISSUES

i)A rise in interest rates will definitely create problems for the shale boys

( Nick Cunningham/OilPrice.com)

ii)Oil rises on news that USA rig count finally drops  (by 2)

( zerohedge)

8. EMERGING MARKET

9.   PHYSICAL MARKETS

Crazy country: not to allow a big mining operation to commence production because of “environmentalists”

( London’s Financial times/GATA)

10. USA Stories

 i)As we pointed out to you yesterday, Illinois is not the only state in jeopardy today:  It is also Connecticut. Here is why>>( zerohedge)

ib)You can now add Maine to the mix:

( zero hedge)

ic)Connecticut fails to pass budget.  The Governors signs exec. order to take over spending:

( zero hedge)

i d)It is now Dave Kranzler’s turn to talk about the upcoming apocalypse with the Colorado Pension scheme:

( Dave Kranzler/IRD)

ii)Trump seems to be acting on his own now:  He is set to overrule cabinet and unleash a vicious global trade war

( zero hedge)

iii)Project Veritas hits CNN again where it shows its internal culture of hate and the creation of fake news:

( ZEROPOINTNOW/Project Veritas)

iv)This is fascinating:  Trump is now calling for the “immediate'” repeal of Obamacare is the Senate deal falls apart. He then advocates  a new deal in 6 months or so

( zero hedge)

v)This will not be good for 2nd quarter GDP:  Personal consumption falters and together with a fall in the deflator causes the savings rate in the USA to soar.  Also the UK savings rate also soared which puts a damper on the economy:( zero hedge)

vi)What a joke: soft data Chicago PMI spikes to 3 yr highs and beats by 7 standard deviations while at the same time Chicago and the state of Illinois cannot get a budget together for over 3 years:

what a farce..

( zerohedge)

vii)Soft data U. of Michigan Consumer Confidence slips to 7 month lows..hope fades..

( zero hedge)

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY ROSE BY 116 CONTRACTS UP to an OI level of 452,684 DESPITE THE FALL IN THE PRICE OF GOLD ($3.30 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 JULY and it is one of the POORER delivery months  of the year. .

The non active July contract LOST 204 contracts to stand at 146 contracts.Thus by definition this is the amount of gold standing initially in July:  146 contracts x 100 oz per contract =   14,600 oz or.4541 tonnes.  The next big active month is August and here the OI LOST 3,796 contracts DOWN to 294,309, as the bankers trying to keep this month down to manageable size. The next active delivery month is October and here we gained 337 contracts up to 16,252.  October is the poorest of the active gold delivery months as most players move right to December.

We had 30 notice(s) filed upon today for 3000 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI FELL BY ONLY  1895 contracts FROM  202,779 DOWN TO 200,885 DESPITE YESTERDAY’S  16 CENT LOSS. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT AS YOU CAN SEE  THEY HAVE NOT BEEN AS SUCCESSFUL AS THEY WOULD HAVE LIKED. THE BIG NEWS IS THE FACT THAT WE  ENTERED FIRST DAY NOTICE AND  WE HARDLY HAD ANY OBLITERATION OF OPEN INTEREST. THIS IS THE FIRST TIME THIS HAS HAPPENED IN OVER 2 YEARS.

We are now in the next big active month will be July and here the OI LOST 9,2268 contracts DOWN to 2,423 . Thus by definition, the amount of silver standing in July is 2,423 x 5000 oz =  12,115,000 oz

The month of August, a non active month picked up 22 contracts to stand at 432.  The next big active delivery month for silver will be September and here the OI already jumped by another 7,021 contracts up to 152,221.

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 JULY 2016:  12.370 million with the difference being EFP’s taking delivery in London.  Thus we are basically on par to what happened a year ago as to the total amount of silver ounces standing.

We had 878 notice(s) filed for 4,390,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 115,920 contracts which is poor

Yesterday’s confirmed volume was 297,681 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for JULY
 June 30/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
NIL
OZ
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
NIL oz
No of oz served (contracts) today
 
30 notice(s)
3000 OZ
No of oz to be served (notices)
116 contracts
11,600 oz
Total monthly oz gold served (contracts) so far this month
30 notices
3,000 oz
.0933 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   NIL oz
Today we HAD  0 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: NIL oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 0  customer deposit(s):
total customer deposits; NIL  oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil  oz
 we had 1 adjustment(s):
 i Out of the Delaware vault:  2800.000 oz was adjusted out of the customer and this landed into the dealer account of Delaware.  THIS IS EXACT WEIGHT/HOW COULD THIS BE POSSIBLE!!
 
For JULY:

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

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To calculate the initial total number of gold ounces standing for the JULY. contract month, we take the total number of notices filed so far for the month (30) x 100 oz or 3,000 oz, to which we add the difference between the open interest for the front month of JUNE (146 contracts) minus the number of notices served upon today (30) x 100 oz per contract equals 14,600  oz, the number of ounces standing in this NON active month of JULY.
 
Thus the INITIAL standings for gold for the JULY contract month:
No of notices served so far (30) x 100 oz  or ounces + {(146)OI for the front month  minus the number of  notices served upon today (30) x 100 oz which equals 14,600 oz standing in this  active delivery month of JUNE  (0.4541 tonnes)
.
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Total dealer inventory 854,084.858 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
 
JULY INITIAL standings
 June 30 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 107,979.941  oz
CNT
DELAWARE
SCOTIA
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
600,300.640 oz
 Scotia
No of oz served today (contracts)
 878 CONTRACT(S)
(4,390,000 OZ)
No of oz to be served (notices)
1545 contracts
( 7,725,000 oz)
Total monthly oz silver served (contracts) 878 contracts (4,390,000 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 107,979.941 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of CNT:  29,934.69 oz
ii) Out of Delaware: 1959.5 oz
iii) Out of Scotia:  76,085.751
TOTAL CUSTOMER WITHDRAWALS:   107,979.941 oz
We had 1 Customer deposit(s):
i)Into Scotia:  600,300.640 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 1 adjustment(s)
i) out of  CNT:  1,739,952.190 oz was adjusted out of the customer and this landed into the dealer account of CNT
i
The total number of notices filed today for the JULY. contract month is represented by 878 contract(s) for 4,390,000 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 878 x 5,000 oz  = 4,390,000 oz to which we add the difference between the open interest for the front month of JUNE (2423) and the number of notices served upon today (878) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the INITIAL standings for silver for the JULY contract month:  878 (notices served so far)x 5000 oz  + OI for front month of JUNE.(2423 ) -number of notices served upon today (878)x 5000 oz  equals  12,115,000 oz  of silver standing for the JULY contract month.
 
 
 
Volumes: for silver comex
Today the estimated volume was 41.817 which is good
Yesterday’s  confirmed volume was 116,647 contracts which is  HUGE
YESTERDAY’S CONFIRMED VOLUME OF 116,647 CONTRACTS EQUATES TO 583 MILLION OZ OF SILVER OR 83% 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:  37.172 million (close to record low inventory  
Total number of dealer and customer silver:   209,008 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 6.5 percent to NAV usa funds and Negative 6.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.5%
cash .+0.1%( June 30/2017) 
 
2. Sprott silver fund (PSLV): STOCK   NAV  rises TO +.20% (june 30/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises TO -0.71% to NAV  (June 30/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +0.20 /Sprott physical gold trust is back into NEGATIVE/ territory at -0.71%/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 30/no change in gold inventory at the GLD/Inventory rests at 853.66 tonnes

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 30 /2017/ Inventory rests tonight at 853.66 tonnes
*IN LAST 184 TRADING DAYS: 93.47 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 125 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 30/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz

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 30.2017:
 Inventory 339.226  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.13%
  • 12 Month MM GOFO
    + 1.40%
  • 30 day trend

end

At 3:30 pm est we receive the COT report which gives us position levels of our major players.  Once we knew that longs receive a cash bonus plus a future contract (probably a London forward) the value of these COT reports are zero.

However, I will provide them for you but offer no conclusion:

First the GOLD COT

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
236,586 104,914 51,658 117,497 267,360 405,741 423,932
Change from Prior Reporting Period
-16,034 2,969 11,925 7,210 -7,943 3,101 6,951
Traders
168 90 83 50 52 252 196
 
Small Speculators  
Long Short Open Interest  
47,403 29,212 453,144  
4,202 352 7,303  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, June 27, 2017

Our large speculators

those large specs that have been long in gold pitched 16034 contracts from their long side

those large specs that have been short in gold added 2969 contracts to their short side.

Our commercials

those commercials that have been long in gold added 7210 contracts

those commercials that have been short in gold covered 7943 contracts from their short side.

Our small specs

those small specs that have been long in gold added 4202 contracts to their long side

those small specs that have been short in gold added 352 contracts to their short side.

And now the silver COT

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
93,869 58,337 22,067 59,720 109,928
-2,131 9,018 600 3,419 -5,207
Traders
103 49 48 41 36
Small Speculators Open Interest Total
Long Short 204,637 Long Short
28,981 14,305 175,656 190,332
2,820 297 4,708 1,888 4,411
non reportable positions Positions as of: 162 120
Tuesday, June 27, 2017

Our large speculators

those large specs that have been long in silver pitched 2131 contracts from their long side

those large specs that have been short in silver added a whopping 9018 contracts to their short side????

Our commercials

those commercials that have been long in silver added 3419 contracts to their long side

those commercials that have been short in silver covered 7943 contracts from their short side.

Our small specs

those small specs that have been long in silver added 4202 contracts to their long side

those small specs that have been short in silver added 352 contracts to their short side.

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Pensions Timebomb In America – “National Crisis” Cometh

Pensions Timebomb – Pensions “Are Going To Be A National Crisis”

– America’s underfunded pension system is “not a distant concern but a system already in crisis”…

– Tax may explode as governments seek to bail out insolvent pension plans

– Illinois, California, New Jersey, Connecticut, Massachusetts, Kentucky and eight other states vulnerable

– The simple mathematical mismatch at the heart of the pension crisis

– Why the pension crisis really is “America’s silent crisis”…

– Pensions timebomb confronts Ireland, UK and most EU countries


By Brian Maher, Managing editor, The Daily Reckoning

“This is going to be a national crisis…

“This” being America’s woefully underfunded pension liabilities, according to Karen Friedman. She’s the executive vice president of the Pension Rights Center.

(A place called the Pension Rights Center does in fact exist. We checked.)

MarketWatch columnist Jeff Reeves howls in confirmation that “collapsing pensions will fuel America’s next financial crisis.”

“This is not a distant concern,” warns he, “but a system already in crisis.”

According to data supplied by the Federal Reserve, pensions — public and private combined — were roughly 27% underfunded at the end of last year.

By some estimates, America’s public pensions alone are sunk in a $6 trillion abyss.

The issue, approached from any direction, is an impossible knot… a tar pit… a minotaur’s maze of blind alleys and dead ends.

How has the American pension come to such an estate?

Most public pension systems were built upon the sunny assumption that their investments will yield a handsome 7.5% annual return.

But consider…

The average public pension plan returned just 1.5% last year.

Last year marked the second consecutive year that plans undershot the 7.5% return rate, according to Governing magazine.

The same plans worked an average gain of 2–4% in 2015.

A highly technical term describes the foregoing if it goes on long enough… and we apologize if it sends you to the dictionary:

Insolvency.

Briefly turn your attention to the Golden State, for example. California.

State pensions are only in funds to meet 65% of their promised benefits.

And California pins its hopes on that golden annual 7.5% return to make the shortage good.

But it’s in a devil of a fine fix if the average public pension plan only returns 1.5%.

The math is the math.

California essentially depends on returns 400% above the norm, according to financial analyst Larry Edelson.

But California is by no means alone.

We won’t run the entire roll call of shame.

But the great state of Illinois, for one, risks sinking into a $130 billion “death spiral” from its unfunded pension liabilities, as Ted Dabrowski of the Illinois Policy Institute described it.

S&P Global Ratings has even threatened to downgrade the state’s credit score to “junk” status.

New Jersey, Connecticut, Massachusetts and Kentucky are also among the worst deadbeats.

But the problems run from ocean to ocean and south to north.

A report from Moody’s reads thus:

For many states and municipalities, exposure to unfunded pension liabilities is already at or near all-time highs. Since cost burdens are already expected to further increase, pension fund investment performance is critical for the credit quality of many governments.

Not even a “best case” cumulative 25% investment return on public pension plans would stanch the blood flow, according to Moody’s.

They say that best-case 25% would merely reduce pension liabilities a slender 1% through 2019 due to weak contributions and poor past investment returns.

“But I don’t have a pension,” comes your response. “This doesn’t concern me.”

Ah, but have another guess — at least if you swear off your taxes in these United States.

Is it your belief that governments will let their prized public pension plans flop?

There are votes to consider, after all.

Jilted pensioners are capable of generating a good deal of hullabaloo, hullabaloo to which the official ear is exquisitely attuned.

Besides, do you think kind Uncle Samuel will turn the politically strategic states of California and Illinois out on their ears?

As our resident income specialist Zach Scheidt argues:

Your tax bill could explode as governments around the country seek to bail out insolvent pension plans. And you know how much politicians like to use your tax money to bail out some constituent. They like to prove their “compassion” with your money!

“Expect to pay higher state and local taxes for fewer services in the years to come,” adds Larry Edelson, before mentioned.

And:

“Don’t be surprised if authorities of all shapes and sizes — from local governments to national agencies — up the ante to get ahold of your assets any way they can.”

We would have to agree. You shouldn’t be surprised in the least.

And we can scarcely imagine the holy hell that would follow another financial crisis.

Illinois Gov. Bruce Rauner warns the state’s pension crisis is driving his beloved Land of Lincoln into “banana republic” territory.

But we suspect the good governor’s mouth ran away with him here…

Can you imagine comparing the venerable, eminently worthy banana republic… to Illinois?

The pension crisis is truly “America’s silent crisis” and indeed the world’s silent crisis.

From The Daily Reckoning newsletter


Related Content

85% of Pension Funds Will Go Bust Within 30 Years

Pensions Timebomb in “Slow Motion Detonation” In U.S., EU and Internationally

Investing in Gold In Your Individual Retirement Account (IRA)

News and Commentary

Gold steady on easing dollar, stocks amid hawkish central banks (Reuters)

Technology Shares Lead Stock Rebound; Oil Gains: Markets Wrap (Bloomberg)

Nikkei dives under 20,000 as Asian markets sharply pull back (Marketwatch)

Tech Spoils Bank Party as Stocks, Dollar Slide: Markets Wrap (Bloomberg)

The Yellowstone Supervolcano Has Just Seen 878 Earthquakes in Two Weeks (Science Alert)

Source: Cape Shiller via ZeroHedge

Source: Cape Shiller via ZeroHedge

Robert Shiller: “The Index I Invented Is At Levels Last Seen In 1929 And 2000” (Zerohedge)

How owning a home in Britain became a luxury (Moneyweek)

Petrodollar wars – Gold in your custody cannot be hacked, erased, or frozen (Zerohedge)

Should you own bitcoin or gold?  That’s easy (SCH)

Lessons from ten of the greatest trades of all time (Moneyweek)

Gold Prices (LBMA AM)

30 Jun: USD 1,243.25, GBP 957.43 & EUR 1,090.83 per ounce
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

Silver Prices (LBMA)

Silver Prices (LBMA)

30 Jun: USD 16.47, GBP 12.69 & EUR 14.44 per ounce
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


Recent Market Updates

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

END

Crazy country: not to allow a big mining operation to commence production because of “environmentalists”

(courtesy London’s Financial times)

Romania hit by $4.4-billion damage claim over stalled gold mine project

 Section: 

By Neil Buckley
Financial Times, London
Thursday, June 29, 2017

A Toronto-listed mining company is claiming $4.4 billion in damages from Romania at the World Bank’s arbitration tribunal, accusing Bucharest of unfairly blocking its $2 billion project to create one of Europe’s biggest gold mines and expropriating its assets.

Gabriel Resources won a licence in 1999 to exploit the Rosia Montana gold and silver deposits in Transylvania, but was never granted the necessary permits. The company says it has complied with all necessary Romanian and European Union legal requirements.

Environmental groups and local campaign groups have fought a bitter battle against the mining plan, saying it would destroy a region of natural beauty and damage historic mine workings dating from Roman times.

Some of the biggest street protests since the Communist era broke out in Romania in 2013 after the then socialist-liberal coalition sent a draft law to parliament giving the go-ahead to the project. An incoming socialist government in January this year asked Unesco to grant world heritage status to Rosia Montana — which would end any chance of developing the mine. …

… For the remainder of the report:

https://www.ft.com/content/52f5c202-5c99-11e7-9bc8-8055f264aa8b


Your early FRIDAY 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 6.7807(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  A LOT STRONGER TO ONSHORE AT   6.7796/ Shanghai bourse CLOSED UP 4.36 POINTS OR 0.14%  / HANG SANG CLOSED DOWN 200.84 POINTS OR 0.77% 

2. Nikkei closed DOWN 186.87 POINTS OR 0.92%   /USA: YEN FALLS TO 111.99

3. Europe stocks OPENED ALL IN THE GREEN       ( /USA dollar index RISES TO  95.76/Euro DOWN to 1.1405

3b Japan 10 year bond yield: RISES TO   +.086%/     !!!!(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::  45.34 and Brent: 47.98

3f Gold DOWN/Yen UP

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

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

3h Oil 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  +.439%/Italian 10 yr bond yield UP  to 2.132%    

3j Greek 10 year bond yield RISES to  : 5.44???  

3k Gold at $1244.35  silver at:16.60 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 23/100 in  roubles/dollar) 59.19-

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 SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.96 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  0.9585 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0933 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  +0.439%

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 2.266% early this morning. Thirty year rate  at 2.817% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Dollar, Bond “Carnage” Pauses; Global Stocks Rebound Led By Tech Shares

 

S&P futures rebounded shortly after the stronger than expected European CPI print, rising 0.3% to 2,426, as markets try to forget all about yesterday’s brief 50% VIX surge and tech rout, which trimmed the seventh consecutive quarterly gain for the S&P 500 Index to 2.4%. Europe shares rose 0.4%, led by tech stocks, after a drop in Asian markets, as oil and the dollar gained.

The action this week however, yesterday’s equity fireworks notwithstanding, has been in dollar and bonds, where as Bloomberg says this morning, thecarnage has paused for a breather with Treasuries steady after yields across the globe rose this week as central bankers shifted toward a more hawkish tone while the dollar gained against most G10 peers, paring its worst weekly loss in six.

Putting the dollar’s quarterly performance in context, it is down -4.8% in Q2, its worst quarterly performance since 2010. Market skepticism remains over the Fed’s dots and tightening intentions, the recent 22 bps of curve flattening, and what the ECB may do next. “Obviously there’s a shift afoot. It really seems that there’s some coordinated effort going on out here among the G10 central banks,” said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore, referring to the series of hawkish-sounding comments on monetary policy.

The euro came off yearly highs on Friday but was still set for its strongest quarter in six years as investors pile into the currency on a brightening euro zone economy and its implications for monetary policy in the bloc. The single currency dropped 0.2% to trade at $1.1403, but in the April-June quarter the euro has climbed over 7%, putting it on track for its biggest quarterly gain since January-March 2011.  The euro shot to one-year highs after Tuesday’s speech by European Central Bank President Mario Draghi bolstered expectations that a reduction in stimulus measures would be signaled as soon as September. Though policymakers looked to play this down in the days that followed, investors appear convinced that economic strength will push them to end stimulus sooner rather than later.

“This is partly a response to Draghi’s comments and also on the back of a euro zone economy that is firing on all cylinders and outperforming the rest of the developed economies,” said Investec economist Victoria Clarke. “It’s at a different stage in the cycle as the U.S. so I do expect some of that to cool in the second half of the year, but the growth momentum doesn’t seem to be going anywhere,” said Clarke.

Volatility, absent for much of the year, made a brief, violent return as the debate on normalizing central bank policy intensified after nine years of unprecedented stimulus. That suggests some investors are growing concerned about the economy’s ability to withstand a tightening cycle. Technology stocks have been under pressure this week, while banks have been supported on the prospect for higher rates.

Overnight, the MSCI All-Country World Index slipped 0.1 percent. The gauge is up 10 percent for the six months, the best start to a year since 1998. The MSCI Asia Pacific Index has gained 15 percent for the past two quarters. The MSCI Asia-Pacific shares ex-Japan fell 0.7%, after hitting a two-year high on Thursday. It is up 5.3% for the quarter and has risen 18.3% this year.

In Europe, the Stoxx 600 stocks index rebounded, parding its fourth straight weekly loss, and on track to end the quarter little changed as gains in technology and consumer shares offset losses in chemical makers. Bayer AG fell 4.3% as it expects an earnings hit from its Brazilian crop science business.

In Asia, stocks retreated amid Wall Street tech weakness: Nikkei closed 0.9% % lower, and Japan’s Topix dropped 0.8%, bringing its quarterly gain to 6.6 percent. The ASX 200 dropped 1.7%. Meanwhile, the Yuan rose to strongest against dollar since November, although it gave up all gains and traded unchanged by the close of trade. The PBOC skipped liquidity operations for a 6th day, draining net 160 billion yuan, its 8th consecutive liquidity drain, and despite the stronger than expected Chinese PMI prints, analysts are starting to wonder if the PBOC isn’t overdoing its latest tightening move.  In Asia, Australian sovereign bonds sharply lower; 10-year yield jumps as much as nine basis points to 2.59% before finding resistance; Aussie breaks above 77 cents following strong Chinese PMI.

Futures on the S&P 500 Index rose 0.3% as US traders walked in, having spoent most of the overnight session unchanged. The cash index fell 0.9% on Thursday, the most since May 17 as the VIX briefly surged more than 50% as a result of what some suggested was a risk parity fund unwind. the S&P remains 2.4% higher this quarter.

The euro fell 0.3 percent to $1.1407, after increasing 0.6 percent on Thursday to the highest levels since last year’s Brexit vote. It’s gained 7.1 percent this quarter. The pound dropped 0.2 percent to $1.2985, snapping seven days of gains. The currency is up 2.5 percent this quarter. The yen fell 0.2 percent to 112 per dollar. The Bloomberg Dollar Spot Index rose 0.1 percent, heading for a monthly loss of 1.3 percent. It’s poised for a fourth month of losses.

Crude futures rose for a seventh day, up 0.9% to $45.34, and on course for the longest run of gains this year, as signs of slipping U.S. supply eased pressure on OPEC-led curbs. Gold fell 0.1 percent to $1,244.09 an ounce. The precious metal is heading toward its first monthly decline this year.   Dalian iron ore slips 1.7% despite stronger than expected Chinese PMI data.

The yield on 10-year Treasuries added one basis points to 2.28 percent. The rate has climbed 14 basis points this week. Benchmark yields in the U.K. were little changed at 1.24 percent, as were French yields at 0.8 percent. Yields in Germany fell one basis point.

There will be a flurry of data later today including Michigan sentiment, but no major earnings are expected

Bulletin headline Summary from RanSquawk

  • USD weakness modestly tamed with GBP and EUR pulling back from its recent highs
  • Bayer weighs on the Dax despite stella German Retail Sales
  • Looking ahead, highlights include US PCE and Baker Hughes rig count.

Top Overnight Headlines

  • BOE’s Haldane repeats any policy tightening to be limited, gradual: BBC
  • U.K. June GfK consumer confidence -10 vs -7 estimate; Lloyd’s business barometer 30 vs 27 previous
  • China manufacturing PMI 51.7 vs 51.0 est; non-mfg 54.9 vs 54.5 prev
  • Aso doesn’t see any changes to monetary or fiscal policy
  • Japan May core CPI 0.4% vs 0.4% est; jobless rate 3.1% vs 2.8% est
  • Japan May industrial output -3.3% vs -3.0% est; y/y 6.8% vs 6.9% est
  • Obamacare Repeal Risks Worsening America’s Opioid Crisis
  • Harvard Links Billionaire Samwers, Ex-Eton Manager in New Fund
  • Trump’s Taste for Confronting Putin to Be Tested Face-to-Face
  • Deutsche Bank Declines to Provide Dems With Trump, Russia Info
  • Adelson-Backed Lobbying Against Web Gaming Makes Sessions Fold
  • Nord Pool to Expand Trading Into 7 New EU-Countries Next Year
  • Ecopetrol to Prepay $1.93b Syndicated Loan Due 2020 on June 30
  • IFresh Says Two Legal Disputes May Have Material Adverse Impact
  • Moody’s: North America Coal Sector Outlook Remains Stable

Market Snapshot

  • S&P 500 futures up 0.3% to 2,426
  • STOXX Europe 600 up 0.4% to 382.01
  • MXAP down 0.6% to 154.74
  • MXAPJ down 0.8% to 504.70
  • Nikkei down 0.9% to 20,033.43
  • Topix down 0.8% to 1,611.90
  • Hang Seng Index down 0.8% to 25,764.58
  • Shanghai Composite up 0.1% to 3,192.43
  • Sensex down 0.2% to 30,796.71
  • Australia S&P/ASX 200 down 1.7% to 5,721.49
  • Kospi down 0.2% to 2,391.79
  • German 10Y yield fell 1.5 bps to 0.437%
  • Euro down 0.4% to 1.1397 per US$
  • Brent Futures up 0.7% to $47.74/bbl
  • Italian 10Y yield rose 11.9 bps to 1.859%
  • Spanish 10Y yield fell 1.2 bps to 1.521%
  • Brent Futures up 0.7% to $47.74/bbl
  • Gold spot down 0.2% to $1,243.59
  • U.S. Dollar Index up 0.2% to 95.79

In Asia, stocks traded in a sea of red amid month-, quarter- and half-year end flows, as well as a negative lead from US where tech underperformed. ASX 200 (-1.4%) and Nikkei 225 (-1.2%) were broadly pressured from the open with the latter suffering from a firmer JPY, while Japanese CPI and Unemployment data also left much to be desired. Elsewhere, Shanghai Comp. (+0.07%) and Hang Seng (-0.7%) brushed aside the better than expected Chinese Official Manufacturing PMI and adhered to the downbeat tone after the PBoC continued to refrain from liquidity operations. Finally, 10yr JGBs traded lower despite the risk averse tone, as Japanese yields tracked their global counterparts higher in the wake of the recent hawkish tone from European central bankers. Furthermore, the BoJ were also in the market today, although its Rinban announcement was for a relatively reserved JPY 475b1n of JGBs.

Top Asian News

  • China Factory Momentum Gains in June on Back of Trade Rebound
  • BOJ Plans to Keep Current Pace of Bond Buying in July
  • Hedge Fund Renaissance Picks Winner as Japan Stock Surges 1,813%
  • Global Demand Eases China Deleveraging Pain With Factory Support
  • China Says Trump’s Taiwan Arms Sale Undercuts Early Goodwill
  • Asahi Sells Chinese Beverage Stake For $625 Million, Nikkei Says
  • Limits of Japan’s Export-Led Recovery Show Through in Poor Data

In Europe, the historic, frantic trade on the last day of the month, quarter and half, has been far from visible today, with local bourses trading subdued. Much of the volatility was seen through the US and Asian sessions, however, a dip was seen in the open; with bank buying not enough to offset falls for commodity and health care related sectors. The healthcare sector has been weighed upon by Bayer having fallen 5%, after reporting that they see a negative earnings impact from its Brazilian crop science business — seeing its FY17 one time effect of EUR 300 — 400mln. Gilts have been the noticeable paper to watch this morning, down to a new low around 125.15, looking towards March’s 124.42 low, a key yield is approaching in the cash, with 1.30% the next to lookout for. Bunds also have edged lower, breaking below 162, however, with no real conviction. Psychological cash yield levels seem to be the theme, with 0.50% approaching in the cash.

Top European news

  • Euro-Area Inflation Slows as Draghi Urges Prudence in QE Exit
  • German Labor Market Takes Breather as Unemployment Inches Higher
  • Nestle’s New CEO to Show Off M&A Acumen as Activists Circle
  • Goldman Said to Bid for $1.3 Billion of UniCredit U.K. Mortgages
  • Delivery Hero Gains on First Day of Trading as Tech IPO Succeeds
  • German Parliament Backs Fines for Social Media for Hate Speech
  • Bayer to Cut 2017 Forecasts as Crop Unit Struggles in Brazil
  • U.K. Saving Ratio Falls to Record Low as Squeeze Takes Toll
  • U.K. Confidence Lowest Since Just After Brexit Vote

In currencies, a cautious start to the last day of trading for June, and H1, but extreme USD weakness has been modestly tamed, with EUR/USD backing off the mid 1.1400’s, while Cable is back under 1.3000. Both key pairs, which have rallied on hawkish twists to the respective central bank outlooks, and as such, remain well placed to retest the highs later on today if the US data comes out weak again. EUR/GBP usually sees some month end pressure to the upside, but there has been little evidence of this in the last few days, remaining on the heavy side and below the 0.8800 mark also. It could be a busy one for the CAD also, as the April GDP numbers could put some fresh light on the optimism going through at the present time. Against this is the level of appreciation seen in the time frame achieved, and to this end, we continue to eye support levels ahead of 1.2900 as sub 1.3000 levels suggest the market is still ready to probe lower.

In commodities, heading into month end, it could be a busy day for the USD as the day wears on, but a number of factors seen impacting on the leading assets this morning. For metals, the better than expected China PMIs will add to the support which has seen Copper testing USD2.70, but through this level, prices are certainly looking heavy. Iron ore is the lead based on the China story, and as long as this holds up, better levels will be maintained. WTI continues to probe levels through USD45.0, but tech based resistance continues to contain trade, with sellers still looking for better levels to fade strength based on US production levels. Output has decreased according to the report this week from the DoE, so the bid tone looks comfortable for now. Gold and Silver are trading extremely tight ranges, but we see the yellow metal looking vulnerable at present, and if the USD manages to recover a little more ground into the weekend, then we could be set for a retest of the early Monday lows seen in brief, but sharp hit in thin volumes. We hit lows just under USD1237.00 at the time.

Looking at the day ahead, we are due to get the May personal spending and income reports, along with the PCE core and deflator readings. The Chicago PMI for June will also be released before we end the day with the final revision to the University of Michigan consumer sentiment reading. Away from the data, given all the focus this week it’s probably worth keeping an eye on scheduled comments due from the ECB’s Lautenschlaeger (at 11.30am BST) and Coeure (at 1.00pm BST).

US Event Calendar

  • 8:30am: Personal Income, est. 0.3%, prior 0.4%; Personal Spending, est. 0.1%, prior 0.4%; Real Personal Spending, est. 0.2%, prior 0.2%
    • PCE Deflator MoM, est. -0.1%, prior 0.2%;  PCE Deflator YoY, est. 1.5%, prior 1.7%
    • PCE Core MoM, est. 0.1%, prior 0.2%; PCE Core YoY, est. 1.4%, prior 1.5%
  • 9:45am: Chicago Purchasing Manager, est. 58, prior 59.4; Sentiment, est. 94.5, prior 94.5; Current Conditions, prior 109.6; Expectations, prior 84.7

DB’s Jim Reid concludes the overnight wrap

Welcome to the last day of June and with it, the halfway point for the year. For the most part in 2017 we have agonised about the lack of volatility in markets. In fact it was probably one of the dullest starts to a year that we can remember when you consider how low various measures of asset class vol got relative to history. Just as it looked like we may be heading into the dog days of summer in a similar vein, this week the cast of hawks which descended on the village of Sintra have certainly sparked a bit of life back into markets.

Indeed as investors debate the various snippets of forward guidance thrown up the ECB, BoE and BoC in the last few days, in addition to a Fed which is in a gradual tightening phase, bond markets this week having been running to stand still on the path to normalization. In a year of super low vol it could well be that we look back on this week at the end of the year as the one in which the tide finally turned.

In markets the last 24 hours has been all about the continued sell off for European bonds. We thought it would be worth taking stock and we’ve detailed some of the moves here with the first number in brackets being the change in basis points over the last 24 hours and the second number being the change versus last Friday. As you’ll see, the magnitude of the moves has also seen a number of markets hit fresh multi-month highs in yield. In no particular order, these are the moves for 10y maturities; Bunds (+8.3, +19.7) to 0.450% and the highest since March 21st, OATs (+8.9, +19.9) to 0.803% and the highest since May 24th, Gilts (+9.5, +21.9) to 1.250% and the highest since February 16th, BTPs (+12.1, +23.3) to 2.145% and the highest since June 8th. Treasuries have also been swept up by the moves on the continent and are up +12.4bps this week (and +3.9bps yesterday) at 2.267% and the highest since May 23rd. We’ve also seen the 2s10s Treasury spread steepen nearly 10bps this week to 89bps and is currently on course for its first steepening over the course of a week since the five days ending May 5th.

It’s worth noting also that the 10y Treasury-Bund spread is at the tightest (182bps) since Trump was elected. It had gotten as wide as 236bps at one stage (the widest since 1989). That narrowing probably also says something about the disappointment in the lack of progress on Trump’s proposed reforms including the lack of support for the healthcare bill this week. It’s not just been rates which have seen big moves this week though. The Euro rose another +0.55% yesterday and is up +2.21% since Friday and at the highest (1.1441) since April last year.

Meanwhile risk assets have also been hit although that seems to mostly be to do with the continued sell-off across the tech sector. The S&P 500 made another u-turn yesterday by falling -0.86% and is down -0.76% for  the week now. The Nasdaq tumbled -1.44% and is down -1.93% over the week which is the worst weekly performance since December last year. The VIX also briefly surged above 15.00 yesterday which is the highest in over a month while the VXN (Nasdaq Vol) closed at the highest (18.43) since November last year. As you might expect however with a rising rate environment, and also the overall positive read through from the Fed’s stress test this week, US Banks (+1.84% yesterday) have rallied +5.34% this week. Meanwhile in Europe the Stoxx 600 tumbled -1.34% yesterday and is down -1.80% this week.

There wasn’t necessarily any new news to trigger yesterday’s big sell off for bonds. A higher than expected CPI print in Germany for June (+0.2% mom vs. 0.0% expected) has raised hopes for a better than expected  Euro area reading today (consensus is for +1.2% yoy headline and +1.0% core). It’s worth noting that we will also receive PCE data in the US while this morning we’ve already had CPI data out of Japan (more on that shortly) – so a good day to test the inflation pulse. It’s worth also noting that Oil (+0.42% yesterday) has quietly gone about rising for the last six sessions while Iron Ore is also now back into a bull market having bounced 20% from the June lows. So the commodity complex is showing signs of rallying off the recent lows. Meanwhile the BoE’s Haldane also continued his hawkish rhetoric by saying that “we need to look seriously at the possibility of raising interest rates” after citing concerns about the rising cost of living in the UK.

Coming back to the ECB, yesterday DB’s Mark Wall published a report in which he reflects on Draghi’s comments. Mark writes that Draghi’s hawkish turn this week came against the run of data and events – weaker PMI,  lower oil prices, higher euro exchange rate, etc. However, the tone was at least more consistent with the decision to ax rates guidance, less risky given the easing in euro area financial conditions since the French election and — over the entirety of the speech — more balanced and conditional than the headlines suggest. The strategy seems to be to talk some confidence into the perception of inflation. The impact has been to tighten financial conditions. Mark goes on to say that after the dovish June Council meeting, we changed our call to a “slow and extend” decision by December. “Slow and extend” still feels appropriate, all the more so with the euro having risen further. But having effectively opened Pandora’s Box with the first formal admission of exit, clarification and transparency is more urgent. Our baseline is now to expect the “slow and extend” QE decision in September. Mark also highlights that the Euro could act as a self-correcting mechanism on exit and in the note attached details some scenarios to help judge the limits of Euro appreciation. You can find more here.

To Asia now where before we look at how markets are finishing the week, there’s been a bit of data to dig through. First up is China where the manufacturing PMI for June came in at a better than expected 51.7 (vs. 51.0 expected), up 0.5pts from May. New orders and output sub-indices were both reported as rising. The non-manufacturing PMI also rose 0.4pts to 54.9. Meanwhile in Japan the latest inflation data for May was a fraction softer than expected. Headline CPI held steady +0.4% yoy (vs. +0.5% expected) while the core-core also held steady at 0.0% yoy (vs. +0.1% expected). The core did however rise one-tenth to +0.4%, as expected.

In terms of markets, equity bourses in Asia have mostly tracked the losses on Wall Street and Europe yesterday. The Nikkei (-1.09%), Hang Seng (-0.91%), ASX (-1.40%), Shanghai Comp (-0.26%) and Kospi (-0.43%) are all weaker to end the week. Sovereign bond markets have also continued to sell with yields across the region between 2bps and 9bps higher. US equity futures are little changed. Moving on. Once again, yesterday’s US economic data was left in the shadows a bit. The third and final Q1 GDP reading was revised up two tenths to +1.4% qoq saar with final sales being revised up four-tenths to +2.6%. A stronger estimate of consumer spending appeared to be the driver of the upward revision. The core PCE was revised down one-tenth to +2.0% qoq saar. The only other data in the US was the latest weekly initial jobless claims reading which came in at 244k and up 2k relative to the prior week. The other data of note in Europe yesterday included the European Commission’s economic sentiment reading for June which rose 1.3pts to 111.1 (vs. 109.5 expected) and a new 10-year high. In the UK mortgage approvals were little changed in May.

Looking at the day ahead, it looks set to be a fairly busy end to the week with a number of important releases due up. First up will be retail sales in Germany, shortly followed by the flash June CPI report in France.  Following that we’ll get the latest unemployment reading in Germany and then the final revisions to Q1 GDP in the UK. After that, all eyes turn to the aforementioned CPI report for the Euro area. This afternoon in the US we are due to get the May personal spending and income reports, along with the PCE core and deflator readings. The Chicago PMI for June will also be released before we end the day with the final revision to the University of Michigan consumer sentiment reading. Away from the data, given all the focus this week it’s probably worth keeping an eye on scheduled comments due from the ECB’s Lautenschlaeger (at 11.30am BST) and Coeure (at 1.00pm BST).

 END

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 4.36 POINTS OR 0.14%   / /Hang Sang CLOSED DOWN 200.84 POINTS OR 0.77% The Nikkei closed DOWN 186.87 POINTS OR 0.92%/Australia’s all ordinaires CLOSED DOWN 1.57%/Chinese yuan (ONSHORE) closed UP at 6.7807/Oil UP to 45.34 dollars per barrel for WTI and 47.98 for Brent. Stocks in Europe OPENED ALL IN THE GREEN,,   Offshore yuan trades  6.7796 yuan to the dollar vs 6.7807 for onshore yuan. NOW THE OFFSHORE IS MUCH STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH  STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

END

b) REPORT ON JAPAN

c) REPORT ON CHINA

China’s pMI for mfg and service unexpectedly rise despite employment contraction. This is due to the after-effects of that large stimulus orchestrated by POBC at the start of the year:

(courtesy zero hedge)

China PMIs Unexpectedly Accelerate Despite Ongoing Employment Contraction

Validating the recent surge in iron ore, which has jumped more than 18% from 2017 lows hit just two weeks ago on speculation the PBOC may be willing to flirt with another round of inflation, overnight Beijing reported an unexpectedly strong bounce in its manufacturing and service sectors.

China’s NBS June manufacturing PMI came in at 51.7 for June, above both the previous reading of 51.2 and expectations of a 51 print, remaining comfortably above the 50-point expansion line. This was the second highest level of 2017, on the back of improving market sentiment and industrial upgrading, according to an NBS statement posted on its website, despite an ongoing troubling contraction in the employment subindex. Unlike the Caixin PMI, the official index tracks mostly larger, state-owned enterprises.

Two key sub-indices both increased from the previous month, although ominously the employment index declined for one more month and remained in contraction territory:

  • The production sub-index went up to 54.4 in June, higher than 53.4 in May.
  • The new order sub-index also increased to 53.1 in June from 52.3 in May.
  • The employment index slightly declined to 49.0 in June, from 49.4 in May.

Both inflation indicators were higher, as the input prices index rose to 50.4 from 49.5 in May, and the output price index rebounded to 49.1 from 47.6 in May after three consecutive months of decline. Trade indicators were stronger: Both the new export order index and the import index increased by more than 1.0 pt, reaching 52.0 and 51.2 respectively. Raw material inventory inched up (to 48.6 vs. 48.5 in May) but finished goods inventory declined (to 46.3 vs. 46.6 in May). The suppliers’ delivery times suggested longer delivery times (which imply better demand conditions) – it fell for a third consecutive month in June, from 50.2 in May to 49.9.

“Stronger foreign demand is helping to support manufacturing activity,” Capital Economics’ Julian Evans-Pritchard wrote. “The price components both increased for the first time since December, suggesting that downward pressure on producer prices may now be easing.”

Separately, the official non-manufacturing PMI (comprised of the service and construction sectors at roughly 80%/20% weights) also surprised to the upside, rising to 54.9 in June from 54.5 in May. Services PMI rose to 53.8 from 53.5 in May, while construction PMI climbed to 61.4 from 60.4 in May.

The stronger than expected numbers “mean that momentum in the economy continues to be robust and we’ll have only a gradual slowdown at worst in the coming quarters,” Dariusz Kowalczyk of Credit Agricole in Hong Kong, said in a Bloomberg Television interview. “China is doing very well.”

As Bloomberg notes, economic activity this year has so far proven more resilient than expected – likely on the heels of the loan explosion at the start of the year which has since been tapered alongside China’s shadow banking crunch – giving policy makers time to focus on reining in financial risks and cooling a frothy property sector. Firmer global trade is boosting corporate profits and hiring, easing fears – for now – that efforts to cut excessive financial borrowing could derail the government’s target of 6.5% expansion in output.

Companies are assuming that curbs on excess leverage and the property sector will be transient this year, as the Communist Party won’t allow much economic pain before the leadership transition in the fall, according to a report published by research firm CBB International this week.

Goldman adds that judging from the NBS PMIs, June activity growth appeared to be healthy, however it adds that one caveat is that China’s mfg PMI trends seem to be at least slightly distorted by prices – thus the increase in output prices in June might have flattered somewhat the pickup in the headline PMI reading.

The Caixin manufacturing PMI release next Monday will give another early gauge of activity momentum in June.

end

China is furious with the USA over the sale of $1.4 billion in weapons to Taiwan

(courtesy zero hedge)

Furious China “Outraged” By U.S. Sale Of $1.4BN In Weapons To Taiwan

One day after the US announced it would sell $1.42 billion in weapons to China’s offshore nemesis Taiwan, Beijing lashed out at the United States, saying it was “outraged” and demanded the US revoke immediately its “wrong decision”, saying it contradicted a “consensus” President Xi Jinping reached with his counterpart, Donald Trump, in talks in April in Florida.

The proposed U.S. package for Taiwan includes technical support for early warning radar, high speed anti-radiation missiles, torpedoes and missile components.

The sales would send a very wrong message to “Taiwan independence” forces, China’s embassy in Washington said in a statement. A U.S. State Department spokeswoman said on Thursday the administration had told Congress of seven proposed sales to Taiwan, the first under the Trump administration. “The Chinese government and Chinese people have every right to be outraged,” the embassy said.

Besides token bluster, however, this time China also warned that Trump’s action was counter to the agreement reached with Xi in Palm Beach, suggesting retaliation will likely be imminent. “The wrong move of the U.S. side runs counter to the consensus reached by the two presidents in and the positive development momentum of the China-U.S. relationship,” the embassy said.

This was the second major diplomatic escalation between the US and China in just the past 24 hours, with the US announcing late yesterday the first sanction imposed on Chinese entities for ties with North Korea, a move which likewise was slammed by the Chinese press.

As a reminder, one of Trump’s initial diplomatic snafus was to implicitly recognize Taiwan when he spoke over the phone with its president Tsai Ing-wen shortly after the election, in the process infuriating Beijing. China regards Taiwan as a wayward province and has never renounced the use of force to bring it under its control. China’s Nationalists fled to the island after losing the civil war with China’s Communists in 1949.  The United States is the sole arms supplier to Taiwan.

In the meantime, China’s Defense Ministry said Taiwan was the “most important, most sensitive core issue in Sino-U.S. ties”, warning the United States to end such sales to avoid further damaging peace and stability in the Taiwan Strait.

Trump’s relationship with China has been quite complex: Trump was initially critical of China during his successful 2016 presidential campaign but his meeting at his Mar-a-Lago resort in Florida with Xi raised hopes for warmer relations. Trump later played up his personal relationship with Xi, calling him a “good man”, and stressed the need for China’s help in reining in a defiant North Korea’s development of nuclear weapons and missiles.

And now, according to the latest report, Trump is allegedly preparing to go back to square 1 and unleash trade war on China and others.

As Reuters notes, China’s anger over the U.S. plan to supply Taiwan with weapons risks undermining Trump’s attempts to press China to help on North Korea.  Beijing’s relationship with Taiwan has been frosty since President Tsai Ing-wen took power in Taipei last year. Tsai leads an independence-leaning party that refuses to recognized Beijing’s “one China” policy.

* * *

Asked about the sales at an event on Thursday evening in Washington, Chinese Ambassador Cui Tiankai said the United States was “incorrigible” when it came to Taiwan, the official Chinese Communist Party People’s Daily newspaper reported on its website.

“But we should still continue to instruct (them) and continue advancing on the right track of China-U.S. relations because this is what truly fits for both countries’ long term interests,” the paper quoted Cui as saying. The sales, which require congressional approval, would be the first since a $1.83 billion sale that former President Barack Obama announced in December 2015, also to China’s dismay. The previous package included two navy frigates in addition to anti-tank missiles and amphibious attack vehicles.

Trump is expected to meet and perhaps chat with Xi Jinping during next week’s G-20 meeting. Since Putin will also be present, and will meet with the US president, there will be plenty of drama.

4. EUROPEAN AFFAIRS

The Eurozone inflation numbers beat expectation of 1.3% from May’s 1.4% but ahead of consensus 1.2%. The bankers are always trying to inflate themselves out of their mess.

(courtesy zero hedge)

Eurozone Inflation Beats Expectations, Yet Euro Is Disappointed

After this week’s hawkish central banker whirlwind, traders and analysts were keenly looking forward to today’s Eurozone June inflation print to see if it would validate Draghi’s unexpected hawkish pivot; the data was released on Friday morning by Eurostat, and while dropping from May’s 1.4% headline print to 1.3%, it beat the 1.2% consensus expectations, rising 1.3%. The core print of 1.1% excl. energy, food, alcohol and tobacco likewise beat estimates of 1.0%, and was above May’s 0.9%.


Chart courtesy of Schuldensuehner

Looking at the main headline components, energy posted a sharp decline, rising at 1.9%, compared with 4.5% in May, followed by services (1.6%, compared with 1.3% in May), food, alcohol & tobacco, 1.4%, compared with 1.5% in May, while non-energy industrial goods rose 0.4%, compared with 0.3% in May.

And yet despite the upside surprise relative to expectations,the Euro – at least according to Citi – appears disappointed.

As Citi’s Rui Dint notes, the EURUSD is ticking slightly lower on the release of the overall Eurozone inflation print – despite a small upside beat, and asks – why isn’t EUR higher?

His answer:

After German CPI on Thursday beat by 0.2% points at 1.5% YoY, market positioning seems to have adjusted slightly into today’s data print for a similar upside surprise. Such a print would also increase expectations that the ECB will remove accommodative monetary policy sooner than later, especially in the light of Draghi’s willingness to look through weak inflation on Tuesday. However this did not transpire and put together with the fact that the headline print is a YTD low, EUR isn’t trading higher on the data print.

Looking into the details, this was exactly in line with Citi Economics expectations. It previewed: “Base effects, coupled with renewed weakness in oil prices, are likely to shave another ~0.3pp off the headline YoY rate in June solely via the energy component. Fresh food prices have also probably remained quite weak, in line with the past three readings. Core HICP inflation on the other hand likely bounced back to 1.1% YoY, still affected by a different timing of spring holidays relative to 2016.”

EURUSD currently trades around 1.1400 between decent levels on either side – 1.1375-50 is the immediate area to watch on the downside. The kneejerk reaction, however, was clearly lower, suggesting the CPI whisper number was higher.

In summary: the inflation print was neither too hot nor too cold to demolish any potential, if only near-term, hawkish relent by Draghi.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Qatar/USA/Iran/USAHegemony/

One of the best articles I have seen on the Qatari issue. The real contention is not that Qatar is supporting terrorism but that fact that Qatar has no choice but to face east and supply China with their huge gas fields.  China is paying Iran in yuan for oil so it is understandable why the USA is extremely worried.  The petrodollar scheme just got a knife thrown into its heart.

a must read..

(courtesy Darius Shahtahmasebi/AntiMedia.org)

Qatar Begins Turning Its Back On The US Dollar

Authored by Darius Shahtahmasebi via TheAntiMedia.org,

Late last week, Saudi Arabia and other members of the Gulf Cooperation Council (GCC) that are involved in attempting to isolate Qatar sent the tiny Gulf nation a list of 13 demands. They are insisting that Qatar meet these demands within ten days or face unspecified further action.

The list of demands includes Qatar shutting down Al-Jazeera and its affiliate stations; shutting down other news outlets that Qatar funds, including Middle East Eye; curbing diplomatic ties with Iran and expelling members of Iran’s Revolutionary Guard; terminating the Turkish military presence in Qatar; consenting to monthly audits for the first year following acceptance of the demands, and aligning itself entirely with the other Gulf and Arab countries militarily, politically, socially, and economically – to name but a few.

The most ludicrous of the demands is that Qatar must end its interference in sovereign countries’ internal affairs. Qatar does interfere in a number of countries, including Libya and Syria, but as the German Foreign Minister explained, this list of demands directly challenges Qatar’s sovereignty. Who is interfering with whose sovereignty, exactly?

Unsurprisingly, Qatar has dismissed the list of demands as neither reasonable nor actionable. Surely, the Saudi-led anti-Qatar alliance is aware of this. It would be tantamount to asking Great Britain to shut down the BBC and expel American troops – it just wouldn’t happen. All of the world’s major newspapers are complicit in running state-sanctioned propaganda, and singling Al-Jazeera out is hardly fair or practical.

In that context, Saudi Arabia and its friends have given Qatar a list of demands they cannot conceivably meet and imposed a ten-day deadline to concede or face unspecified further action. Qatar was essentially doomed from the start of this rift, and it’s only just beginning. As Newsweek lamented“the demands are designed to be impossible to comply with.”

The UAE has warned that Qatar is now facing indefinite isolation and that the economic and political sanctions are likely to become permanent. Taken together with the recent promotion of the Saudi King’s son, Mohammed bin Salman, now first in line to the throne, things are indeed heating up against Qatar. Prince Salman is widely regarded as one of the main proponents behind the Saudi-Qatar rift.

The ultimate agenda of the Saudi-led alliance is to deter Qatar from continuing its relationship with Iran, Saudi Arabia’s regional arch rival. But even the Guardian notes that “cutting ties to Iran would prove incredibly difficult,” as Iran and Qatar share a massive offshore natural gas field that supplies Qatar with much of its wealth. In fact, Iran immediately came to Qatar’s aid and began supplying the country with food after the Saudi-led sanctions created a shortage within the country. Shaking off Iran and Turkey —the two countries that have stood by Qatar’s side during this feud — is almost unthinkable. Qatar would be left without a single ally on either side of the Middle East region.

Qatar was initially among a handful of countries, including Turkey and Saudi Arabia, that wanted to install a natural gas pipeline through Syria and into Europe. Instead, the Syrian government turned to Iran and Iraq to run a pipeline eastward and cut out the formerly mentioned countries completely. This is precisely why Qatar, Saudi Arabia, and Turkey have been among some of the heaviest backers of the Syrian opposition fighters. This pipeline dispute pitted the Sunni Gulf States against the Shia-dominated bloc of Iran, Iraq, and Syria (Syria’s president is from a minority denomination of the Shia sect of Islam). Although Iran and Qatar shared this lucrative gas field, they were directly at odds in regard to how the field should have been utilized.

Not long after Bashar al-Assad’s proposed deal with Iran and Iraq was announced, foreign fighters began to flood the country. Syria was demonized at the outset, even though then-Secretary of State John Kerry dined with Assad two years before the conflict erupted. It should be clear that Washington’s issues with Assad are not rooted in human rights concerns considering the dictator had been in power for 11 years and was notorious for human rights abuses in the period before the so-called revolution began.

Though Qatar has been heavily involved in arming the Syrian opposition and calling for Assad’s departure (Assad being an integral Iranian ally), Qatar actually maintains an independent foreign policy agenda of its own. Over the past two years, Qatar has conducted over $86 billion worth of transactions in Chinese Yuan and has signed other agreements with China that encourage further economic cooperation.

This is incredibly important because Qatar shares its major natural gas reserve with Iran, and Iran also conducts its oil-related business dealswith China in Yuan. Shortly after the nuclear accord reached in 2015, the Islamic Republic sought to capitalize on these economic opportunities by ramping up production on their share of the Iran-Qatari gas reserve. In November 2016, Iran signed a deal with France’s Total, a multinational integrated oil and gas company, to develop this project. Iran is expected to surpass Qatar’s gas production by next year, and Qatar was left with little choice but to join the venture. It lifted a self-imposed ban on developing the gas field in April of this year.

If Iran and Qatar continue down this path, the U.S.’ self-asserted hegemony over the world’s financial markets will directly come under attack, and rising economic and military powers like Russia and China will continue to reap the benefits.

Remember that Hillary Clinton’s leaked emails confirmed that the U.S. and France were so concerned with attacking Muammar Gaddafi in Libya not out of humanitarian concern, but rather, out of fear of his plan to unite Africa under a single gold-backed currency that would be used to buy and sell oil on the global markets.

Remember that in 2000, Saddam Hussein announced he would sell Iraqi oil in euros, and the Guardian reported in 2003 that Iraq had actually netted a handsome profit in doing so — at least until the U.S. invaded not long after and immediately switched the sale of oil back to U.S. dollars.

Perhaps it sounds like a conspiracy theory (even with Clinton’s leaked emails as evidence), but it’s important to ask why Saudi Arabia is so concerned with Qatar, if not for economic reasons? Because of Qatar’s support for terrorism? Hillary Clinton’s leaked emails also revealed that both Saudi Arabia and Qatar financially sponsored ISIS – making such a rationale hypocritical beyond belief.

Pot. Kettle. Black.

The push to oust Assad in Syria has almost all but failed, and Qatar, learning from its mistakes, is not relying on Assad’s departure to maintain its vast supply of wealth (though it would probably still welcome such a move). As Counterpunch explains:

“The failure of this insurgency, however, has spelled the death of this proposal, leaving Qatar bound to look East to Asia – already their biggest customers – for their LNG markets. But most of the existing Eastbound LNG pipeline infrastructure is controlled by Iran. For Qatar, then, cutting its Iran links would be cutting off its nose to spite its face. This is why the Saudis aim to demonstrate that the alternative is having their entire face cut off.”

How far in Saudi Arabia’s face-cutting agenda against Qatar these Gulf State adversaries will go is unclear, but Qatar has already seen some heavy-handed treatment in the early stages of this conflict. Further complicating the issue is the fact that Qatar hosts the largest U.S. military base in the region, with 11,000 troops currently stationed there.

Further, the U.S. just recently implemented a policy to target Iran for regime change. President Trump met with Saudi Arabia and the GCC nations earlier this year and sword-danced and sabre-rattled his way down a warpath with Iran. Trump’s military has been striking down Iranian drones and Iranian-backed troops in Syria, and the White House has just launched fresh accusations against the Syrian government regarding an attack that hasn’t even happened yet.

Clearly, Qatar cannot meet Saudi Arabia’s demands, and Saudi Arabia must be completely aware of this. As we have seen in Yemen and Syria, Saudi Arabia almost always resorts to outright brutality in order to bully non-compliant states into submission. As we have also seen in America’s treatment of Iraq and Libya, countries that depart from the U.S. dollar are not met kindly by the American military, either.

In this context, expect this rift to heat up on multiple fronts. We may very well be witnessing Qatar’s denigration into a Syrian or Yemeni-style battlefield in the months to come.

Let’s hope this is not the case.

end

6 .GLOBAL ISSUES

7. OIL ISSUES

A rise in interest rates will definitely create problems for the shale boys

(courtesy Nick Cunningham/OilPrice.com)

Will Central Banks Derail The Shale Boom?

Authored by Nick Cunningham via OilPrice.com,

The U.S. Federal Reserve has already increased interest rates several times, most recently in June, with promises to do much more. Rate hikes pose a problem for the oil industry, which has used debt to underpin a drilling boom across the U.S. shale patch. Higher rates could raise the cost of drilling.

But low oil prices, and few prospects for a strong rebound in the near-term – and possibly even the medium- and long-term – undercut the rationale for higher rates. After all, inflation is soft, and low commodity prices have a lot to do with that.

In fact, the decline of oil prices this year has led to even lower inflation than expected, not just in the U.S., but also in Europe. The Fed has insisted that weak inflation is “transitory,” but more people are starting to wonder if that is true. “There is now a much bigger chance that there will be an important disinflationary impact from lower oil prices,” Thierry Wizman, global interest rates and currencies strategist for Macquarie, told MarketWatch. With oil prices and broader inflation low, why raise rates?

Still, the Fed seems intent on moving forward. And the Bank for International Settlements (BIS), a group of central banks from around the world, urged central banks a few days ago to continue the “great unwinding.” That is, the extraordinary monetary stimulus stemming from the 2008-2009 financial crisis needs to be reined in. Fed chair Janet Yellen has warned about overpriced asset classes, a side effect of loose monetary policy. The hawkish Fed thinks that monetary policy needs to tighten in order to prevent overheating.

They aren’t alone. The European Central Bank (EBC) has hinted that it could cut back on its policy of quantitative easing. “The time is approaching when the [Federal Reserve] will no longer be the only major central bank in tightening mode,” BNP Paribas SA wrote in a note to clients. In fact, the prospects of tighter conditions from the EBC led to a sharp selloff in bonds and strengthening of other currencies against the dollar.

What does this have to do with oil? A tightening of interest rates could pose problems for the shale industry. The shale boom was underwritten by cheap debt – low interest-rates allowed anyone and everyone to drill, with companies rolling over debt each year to keep the drilling frenzy going. According to May 2017 report from Columbia University’s Center on Global Energy Policy, the total debt of 63 shale companies in the U.S. rose fourfold between 2005 and 2015.

That wasn’t a problem when oil prices were high. The crash in oil prices pushed more than 100 companies into bankruptcy, mostly small and less efficient ones.

But even if the urge to raise interest rates from the central bank is controversial, it seems to be almost a foregone conclusion. So, the shale industry will face rising interest rates at a time when oil prices might be stuck wallowing below $50 per barrel.

This is a much more serious problem for smaller companies without the best credit ratings. The oil majors will take the rate hikes in stride, but for smaller drillers, the rate hikes could be a looming threat. Columbia University concludes that a 2 percent increase in the London Interbank Offer Rate (LIBOR) would cause interest expenses for companies with credit ratings between B and CCC- to skyrocket by 30 percent. Part of that has to do with the knock-on increase in credit spreads for these companies.

An even grimmer scenario of interest rates rising to 5 percent would ultimately mean that small and medium-sized drillers might only be able to obtain unsecured debt at rates exceeding 10 to 12 percent, Columbia University argues.

The upshot is that higher interest expenses would wipe out much of the gains from cost reductions and efficiencies that these shale drillers achieved over the past three years.

On top of all of this, higher interest rates have a more obvious effect on oil prices. Higher rates will strengthen the dollar, and since oil is priced in dollars, demand will fall as oil becomes costlier. The result will be downward pressure on prices. The flip side of this, of course, is that monetary tightening from other central banks outside of the U.S. tends to have the opposite effect.

In short, the tightening from the Fed poses one more problem for the shale industry at a time when it is fighting hard to stage a rebound.

end

Oil rises on news that USA rig count finally drops  (by 2)

(courtesy zerohedge)

US Oil Rig Count Drops For First Time In 24 Weeks As Trump Unveils US-Mexico Petroleum Pipeline

Last week saw US crude production decline by the most since Aug 2016 (perhaps affected by ‘Cindy’) and given the lagged response to WTI prices, many expected the oil rig count to drop this week. As WTI heads for its 7th up-day in a row – the longest streak in 6 months – it is supported as the US oil rig count dropped 2 to 756, the first drop in almost 6 months.

“Is it possible we’d have our first negative number in 24 reports? Unlikely but it’s possible” when you see production down 3 of the past 7 weeks,  Bob Yawger, director of the futures division at Mizuho Securities USA in New York, says by telephone

  • *U.S. GAS RIG COUNT UP 1 TO 184 , BAKER HUGHES SAYS :BHI US
  • *U.S. OIL RIG COUNT DOWN 2 TO 756 , BAKER HUGHES SAYS :BHI US

WTI is extending gains on the print…

As a reminder, Citi’s head technician Tom Fitzpatrick, explained yesterday why oil is now due for a rebound, or as Citi puts it…

Oil hits the floor and is now set to soar!

  • We believe that WTI Crude has posted a short term bottom. Previous short term bottoms have typically seen strong upside follow through with an average low to high rally of 22% over three weeks. 
  • The present price action on WTI Crude is also very similar to that seen in October/November of last year and in that instance, we saw a rally of nearly 23% in the 3 weeks after the low was posted. 

  • We are very focused on the price action seen in October and November of last year where we fell for 5 weeks from a high of $51.93 to a low of $42.20. This time, we also fell for 5 weeks from a high of $52.00 and hit a low of $42.05 last week.

Lower 48 Production fell 55k b/d last week – the biggest drop since Aug 2016…

Total U.S. crude output dropped 100k b/d to 9.25m b/d last week, biggest drop in almost a year and 3rd decrease in the last 7 weeks, according to EIA report Wednesday

We suspect the drop is related to shut-ins from tropical depression Cindy and will recover quickly. It appears President Trump is confident that the Lower 48 will keep pumping as OilPrice.com’s Tsvetana Paraskova reports, to boost American energy exports, the administration of U.S. President DonaldTrump has approved the construction of a new petroleum pipeline from the U.S. to Mexico that “will go right under the wall,” President Trump said on Thursday.

As part of the ‘energy week’, which promotes U.S. global leadership and dominance in energy, President Trump announced six initiatives “to propel this new era of American energy dominance,” he said.

The first initiative is the U.S. to start reviving and expanding its nuclear energy sector. Next, the Department of the Treasury will address barriers to the financing of highly efficient, overseas coal energy plants, President Trump said, mentioning Ukraine as one of the countries that need coal. The third initiative is the petroleum pipeline to Mexico. The fourth step to growing American relevance in global energy is U.S. Sempra Energy signing a deal to start negotiating sales of more American natural gas to South Korea.

The U.S. also approved two long-term applications to export additional natural gas from the Lake Charles LNG terminal in Louisiana, President Trump said, pointing out the fifth initiative. As a sixth initiative, the U.S. is “creating a new offshore oil and gas leasing program” to open up more areas for offshore development, President Trump said.

We will be dominant. We will export American energy all over the world, all around the globe. These energy exports will create countless jobs for our people, and provide true energy security to our friends, partners, and allies all across the globe, President Trump said in his speech.

The U.S. Department of State issued on Thursday three pipeline presidential permits for U.S.-Mexico pipelines. The permit for the New Burgos Pipeline authorizes construction, connection, operation, and maintenance of a new pipeline that has the capacity to deliver up to 108,000 bpd of certain refined petroleum products. The pipeline will cross the U.S.-Mexico border near Peñitas, Texas.

“New permits for the existing Dos Laredos and existing Burgos pipelines, which cross the border in Texas near Laredo and Peñitas, respectively, reflect a change in the name of the permit holder and authorize transport of a broader range of petroleum products than under the previous Presidential permits,” the Department of State said.

The U.S. Department of Energy announced on Thursday the approval of the two long-term applications to export additional LNG from the Lake Charles LNG Liquefaction Project in Lake Charles, LA.

8. EMERGING MARKET

end

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

Euro/USA   1.1405 DOWN .0035/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 ALL IN THE GREEN

USA/JAPAN YEN 111.99 DOWN 0.006(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 1.2973 DOWN .0035 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2976 DOWN .0016 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 34 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1405; 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 4.36 POINTS OR 0.14%     / Hang Sang  CLOSED DOWN 200.84 POINTS OR 0.77% /AUSTRALIA  CLOSED DOWN 1.57% / EUROPEAN BOURSES OPENED ALL  IN THE GREEN 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED DOWN 186.87 POINTS OR 0.92%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 200.84 POINTS OR 0.77%  / SHANGHAI CLOSED UP 4.36 POINTS OR 0.14%   /Australia BOURSE CLOSED DOWN 1.57% /Nikkei (Japan)CLOSED DOWN 186.87 POINTS OR 0.92%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1243.50

silver:$16.57

Early FRIDAY morning USA 10 year bond yield: 2.266% !!! UP 0 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.8177, UP 0  IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 95.76 UP 13  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.027%  DOWN 1 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.086%  UP 2  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.539% UP 1/2  IN basis point yield from THURSDAY 

ITALIAN 10 YR BOND YIELD: 2.158 UP 13 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 62 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.466% UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1412 DOWN .0028 (Euro DOWN 28 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.43 DOWN  0.434 (Yen DOWN 43 basis points/ 

Great Britain/USA 1.3003 DOWN 0.0005( POUND DOWN 5 basis points) 

USA/Canada 1.2982 DOWN .0009 (Canadian dollar UP 9 basis points AS OIL ROSE TO $45.72

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This afternoon, the Euro was DOWN  by 28 basis points to trade at 1.1412

The Yen FELL to 112.43 for a LOSS of 44  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 5  basis points, trading at 1.3003/ 

The Canadian dollar ROSE by 9 basis points to 1.2982,  WITH WTI OIL RISING TO :  $45.72

The USA/Yuan closed at 6.7809/
the 10 yr Japanese bond yield closed at +.086% UP 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2 IN basis points from THURSDAY at 2.2877% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.830  UP 2 in basis points on the day /

Your closing USA dollar index, 95.72  UP 10 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 FRIDAY: 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 UP 62.60 OR 0.29%

NASDAQ WAS closed DOWN 3.93 POINTS OR 1.44%  4.00 PM EST
WTI Oil price;  45.72 at 1:00 pm; 

Brent Oil: 48.37 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.03 DOWN 35/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 35 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.466%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$46.33

BRENT: $48.88

USA 10 YR BOND YIELD: 2.303%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.835%

EURO/USA DOLLAR CROSS:  1.1425 down .0015

USA/JAPANESE YEN:112.17  up 0.180

USA DOLLAR INDEX: 95.64  up 1  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.3015 : UP 17 POINTS FROM last NIGHT  

Canadian dollar: 1.2945 UP 47 BASIS pts 

German 10 yr bond yield at 5 pm: +0.466%

END

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

TRADING IN GRAPH FORM FOR THE DAY

June Gloom: Nasdaq Suffers Biggest Loss Since October As Dollar, Bonds, Economy Plunge

The thundering herd of “individuals” shifted awkwardly as June came to an end…

US Economic data in Q2 was the most disappointing since Q2 2011…

June was a rollercoaster:

  • Nasdaq’s worst month since October (breaking a 7 month win streak)
  • FANG Stocks worst month (first losing month) since November
  • Dow best month since February
  • Small Caps best month since November
  • Risk-Parity Funds lost 1.6% in June – the first loss since November
  • 10Y Treasury Yield biggest rise since November
  • Treasury Yield Curve unchanged.
  • Gold’s worst month since November
  • USD Index feel for 5th of last 6 months
  • WTI fell for 4th straight month (despite last 7 days up – best streak in 6 months)

Small Caps were the biggest gainers in June, Nasdaq the biggest loser… the S&P (light green) bounced of unch for June yesterday and its 40DMA…

The Dow manage to outperform, helped by the banks, the long bond ended June unch, Gold down, and WTI down wose but making a big comeback…

FANG Stocks could not catch a bid…

Notably, as both high-beta stocks and bonds are hammered in the last two weeks, so Risk-Parity funds are coming under serious pressure…

The Dollar Index tumbled in June to its weakest since Sept 2016…

Led by a 3.7% surge in the Loonie (JPY was 1.5% weaker against the dollar in June)…

Treasuries saw the biggest moves in the month… Fascinatingly, 30Y actually saw yields lower on the month even as the rest of the curve all rose (led by 5Y)…

By a miracle of modern algos, the 2s10s Treasury curve ended June perfectly unchanged thanks to the dramatic steepening in the last 4 days…

Copper had the best month of the commodity bunch as perhaps signals that China is folding on its tightening efforts are appearing…big finish to the month for crude too…

*  *  *

Ok – so having got June out of the way, this week has been full of swings too…

The Dow desperatly scrambled up to unchanged on the week, Nasdaq bouned a little but couldn’t hold gains, and While Small Caps led the week, BUT when the ugliness hit at the bell, everythig plunged, Dow closed red on the week and Small Caps managed tiny gain…

VIX jumped back above 11 into the close as Nasdaq went red on the day..

And an ugly week for bonds too…

The Dollar Index saw its worst week in the last 7, led by strength in Cable, the Loonie, and Euro; JPY was weaker on the week…

WTI soared 7.3% on the week and despite Dollar weaknes, Precious metals limped lower…

WTI Crude is up 7 days in a row – the best streak in 6 months, bouncing off support around $42/43 again…

It seems Citi was right after all.

end

As we pointed out to you yesterday, Illinois is not the only state in jeopardy today:  It is also Connecticut. Here is why>>

(courtesy zerohedge)

It’s Not Just Illinois: Connecticut Faces Friday Day Of Reckoning

With Illinois facing a Friday night deadline by which it has to come up with its first fiscal budget in three years or face a downgrade to junk resulting in what a policymaker called a “death spiral“, another mini drama is taking place in Connecticut, which is also facing big budget problems as wealthy residents, hedge funds and major corporations flee the state’s high taxes and its fiscal future gets murkier by the day.

Just today, we reported that Aetna, the insurance giant founded in Hartford where it has been for the past 164 years, announced it would move its headquarters to New York City despite intensive lobbying efforts by Connecticut officials. The move, which followed a departure by GE of its Fairfield HQ of 40 years, is a blow to the company’s hometown, which is facing severe financial problems. Hartford’s problems are a representation of the troubles facing the entire state: while Illinois’ story is familiar, Connecticut has the distinction of the third-worst ratings in the country, only behind Illinois and New Jersey after S&P, Moody’s and Fitch all downgraded the state last month in what officials described as a “call to action” for state leaders.

“We’ve been downgraded by everybody in the last six months, and in the last year two or three times,” Senate Republican President Len Fasano said cited by Fox news. “If we don’t pass a budget, I think we will see a further downward spiral.”

And, just like Illinois (and 14 other states), Connecticut faces a Friday day of reckoning: the state has yet to pass a fiscal 2018 budget by the June 30 deadline.

“We must immediately take the necessary steps to mitigate the current year deficit and then balance the … budget with recurring measures to reduce spending and structural solutions to our long-term problems,” a spokesperson for the Connecticut Office of Policy and Management said in response to Moody’s downgrade.

It’s not just the rating, however.

Connecticut’s deficit has reached $5 billion, and according to an analysis by Pew, the state only has $240 million in its ‘rainy day fund’; just five states have a smaller cushion. Much of the financial troubles are tied to the state’s pension system, which two-term Democratic Gov. Daniel Malloy’s office is seeking to address with a new plan to save the state $24 billion in “coming years.” One solution offered by Malloy is to require new state employees to be covered under a new hybrid pension system. The agreement, which Malloy’s office made with the state union, is tentative and awaiting legislative approval.

“Connecticut can and will adopt a responsible, balanced budget for the coming biennium—the question is how best to handle our finances until that happens,” Malloy said. He offered a short-term “mini-budget” to allow “more time to negotiate a full budget, without making our current problems any worse and without further jeopardizing the state’s bond rating.”

But, like in Illinois, Republican Fasano told Fox News the governor’s budget is not seeing support on “either side of the aisle.” “His proposal decimates municipalities, social services and has no support, so we did our own budget,” Fasano said. “He has really shown the propensity of turning this state in a very negative direction.”

What makes things even more complicated is the even split in the State Senate:

Fasano serves as the State Senate’s Republican president in conjunction with the Democratic president. This is a special situation, as for the first time in decades, the State Senate is split evenly in the historically blue state.

“We are tied, 18-18, and that’s making it more difficult because the Democrats can no longer plow across the finish line a progressive agenda, fiscally speaking—so they can’t figure out what to do,” Fasano said. “Senate Republicans are the only ones with a line-by-line, detailed and balanced budget.”

Fasano claimed the budget put forth by Senate Republicans changes taxes and includes structural provisions that would help keep businesses in the state, although if Aetna is any indication, it’s not nearly enough.

“We are doing things to try to attract people to stay here as best we can, given the fact that we have a $5 billion deficit,” Fasano said. “If we do not pass a budget by June 30, we have sent a message, I think to everyone, that we have no idea what we’re doing, and that is not going to give [comfort] to people to buy or stay here.

Those who have already left the state, mostly affluent hedge fund managers who have migrated to Florida, already got the message.

And while Aetna’s departure was a hit to the state, the state capital Hartford has been struggling with a financial quagmire of its own, even as we reported in early May, meeting last month to discuss the option of filing bankruptcy. “We know that now more than ever, we are in competition across all industries –not just with Massachusetts or New York state, but more specifically with Boston and New York City,” Malloy said last month.

Another problem is the fundamental deterioration in the state’s economy.

Connecticut’s unemployment rate rose to 4.9 percent in April, up from 4.5 percent in January. “Keeping those employees in Connecticut is far more important than where Aetna plants its corporate flag,” Malloy said. Malloy is looking to boost jobs with the approval this week to begin construction on the state’s third casino.

The Democratic governor remains optimistic, however, and his office told Fox News that companies like Xerox, Sikorsky, and Vineyard Vines, among others, have committed to the state over the last two years. But Fasano said he spoke with GE executives before they left and they cited state financial issues.

“They said Connecticut continues to tax at rates that make it unaffordable for businesses, people to stay here and didn’t see what Connecticut looked like seven or eight years from now,” he said. “… That’s the same analysis I’ve heard from a number of businesses as to why they’re leaving. The progressive agenda this governor put forth is now coming home to roost.”

* * *

So will CT pass a state budget? There was some 11th hour hope on Thursday, when AP reported that Connecticut House Democrats said they’ve come up with a two-year budget proposal that could be ready for a vote on July 18. The last minute $40 billion two-year plan would increase the state’s 6.35% sales tax to 6.99% to help maintain funding to cities and towns. It would also provide municipalities with additional ways to generate local revenue and restore the local property tax credit against the personal income tax.

The proposal was being offered up Thursday as lawmakers grappled over whether to pass Democratic Gov. Dannel P. Malloy’s three-month, stop-gap budget before the fiscal year ends on Friday. Malloy says it will be less draconian than having him run state government using his limited executive authority.

And, of course, there’s disagreement, about whether to vote on the mini budget. If the disagreement is not overcome by Friday, Connecticut could soon be in the same financial straits as Illinois.

Incidentally, the muni bond market – with its usual glacial delay – finally noticed that not all is well, and today yields on AAA-rated 10-year muni bonds rose 7 basis points to close at 1.95% , the biggest one day absolute increase since Dec. 15. There was a similar move for 5-year muni bonds which rose 5bps on the day to end at 1.34% now up 10 bps week-to-date, also the largest day-over-day move since December 15.

(courtesy zero hedge)

“You Want To Play Chicken? Let’s Play Chicken” Maine Governor Threatens Shutdown Over Proposed Tax Hike

Connecticut isn’t the only state in New England that’s facing a budget showdown today. As Reuters reports, Maine is bracing for a possible partial government shutdown on Friday – what would be the first in the state since 1991 – as Republican Governor Paul LePage has warned he will reject any budget deal that does not cut income taxes.

LePage, a second-term Republican who faced national scrutiny and calls to resign earlier this year after making an allegedly racist comment about out-of-state drug dealers worsening the heroin epidemic in Maine, said he would declare a state of civil emergency if a budget is not reached by midnight, which would keep state police, prisons, parks and tax collection services but close most other aspects of state government, according to Reuters.

“I will tell you this: If they put a tax increase, ready for a shutdown. End of story,” LePage said in a Thursday interview on Maine’s WGAN radio. “They’re playing chicken at 100 miles per hour and I’m telling you something, you want to play chicken, let’s play chicken.”

The conflict at the center of the budget showdown is the issue of funding the state’s schools, as Reuters explains.

“Legislators are negotiating a roughly $7 billion two-year budget, with the main sticking point being how to fully fund state schools. Voters in November passed a measure imposing a 3 percent income tax on state residents who earn more than $200,000 a year, a measure the governor and statehouse Republicans object to.

The Democratic Speaker of the state House of Representatives, Sara Gideon, has blasted the threat of a shutdown, saying earlier this week, “We must find a path forward and close this budget.”

Maine state law gives the governor 10 days to respond to any budget passed by the legislator. LePage warned on Thursday he planned to wait that long before vetoing any budget that raised taxes. Most of the government would be shut during that time.”

Delays this year in negotiations leave the state, with a heavily tourist-dependent economy, facing the prospect of a partial government shutdown at the start of the long July 4 holiday weekend.”

Concerned about the potential impact of a shutdown, a local advocacy group is preemptively suing the state in federal court, seeking an order that would ensure that public assistance payments continue uninterrupted to the 450,000 people in the state, about one in three residents, who receive them.

To be sure, the stakes in Maine’s budget battle aren’t nearly as high as Connecticut’s. The nutmeg state has yet to pass a fiscal 2018 budget, and the deadline is Friday. Connecticut has the distinction of the third-worst ratings in the country, only behind Illinois and New Jersey after S&P, Moody’s and Fitch all downgraded the state last month in what officials described as a “call to action” for state leaders.

“We’ve been downgraded by everybody in the last six months, and in the last year two or three times,” Senate Republican President Len Fasano said cited by Fox news. “If we don’t pass a budget, I think we will see a further downward spiral.”

Connecticut is currently operating with a $5 billion budget deficit, and according to an analysis by Pew, the state only has $240 million in its ‘rainy day fund’; just five states have a smaller cushion. Much of the financial troubles are tied to the state’s pension system, which two-term Democratic Gov. Daniel Malloy’s office is seeking to address with a new plan to save the state $24 billion in “coming years.” One solution offered by Malloy is to require new state employees to be covered under a new hybrid pension system. The agreement, which Malloy’s office made with the state union, is tentative and awaiting legislative approval. Connecticut and Maine aren’t alone; Illinois also faces a Friday budget deadline that, if not met, could result in ratings agencies downgrading the state – which is struggling under the weight of unfunded public employee pensions – to junk status, virtually guaranteeing a debt-fueled death spiral that will likely lead to bankruptcy.

The showdown comes as Connecticut’s already narrow tax base has seen some major defections recently as corporations and wealthy hedge funds decamp for states like Florida, which offer lower tax rates, or cities like Boston and New York, which offer a stronger talent pool. Yesterday, we reported that Aetna, the insurance giant founded in Hartford where it has been for the past 164 years, announced it would move its headquarters to New York City despite intensive lobbying efforts by Connecticut officials. That move followed a departure by GE of its Fairfield HQ of 40 years.

END

Connecticut fails to pass budget.  The Governors signs exec. order to take over spending:

(courtesy zero hedge)

Connecticut Gov. Signs Exec. Order Taking Over Spending After State Fails To Pass Budget

With Maine looking like it will be the first state to shut down heading into the new fiscal year on Saturday morning and perhaps beating Illinois to the punch, moments ago Connecticut, as previewed last night, will also enter the new fiscal year without a budget, inviting rating agencies to downgrade it to Illinois’ “barely junk” rating or perhaps making CT the first US junk-rated state.

Lawmakers and the governor had been unable to reach an agreement on a two-year budget that will cover a projected $5 billion deficit for months, and not even the threat of the new year prompted them to move as we expected.

Meanwhile, Governor Malloy signed an executive order taking over the state’s spending authority which will cut most services but at least keeps the government open. From Reuters:

  • CONNECTICUT GOVERNOR SIGNS EXECUTIVE ORDER TO TAKE CONTROL OF STATE SPENDING AFTER FAILURE TO PASS FY 2018/19 BIENNIAL BUDGET
  • CONNECTICUT EMERGENCY SPENDING PLAN KEEPS STATE GOVERNMENT OPEN BUT CUTS SERVICES

As a result of the failure to pass a budget, AP reports that nonprofit social service agencies that rely on state funds are preparing for deep cuts. Democratic Gov. Dannel P. Malloy, who wanted the General Assembly to at least pass a proposed three-month mini-budget, is expected to reluctantly sign an executive order that maintains only essential state services.

Connecticut’s General Assembly failed to pass a version of the state budget on Friday, forcing Democratic Gov. Dannel P. Malloy, who wanted the General Assembly to at least pass a proposed three-month mini-budget, to sign an executive order to take control of state spending, according to the Associated Press.

.@GovMalloyOffice signed executive order today to keep government running

Gian-Carl Casa, president and CEO of Connecticut Community Nonprofit Alliance, says agencies that help people struggling with mental illness to domestic violence are planning to lay-off staff and close programs.

The failure is the latest blemish on Malloy’s record. The two-term governor has said he will not seek a third term when is current one is up at the end of 2018.

end

It is now Dave Kranzler’s turn to talk about the upcoming apocalypse with the Colorado Pension scheme:

(courtesy Dave Kranzler/IRD)

Pension Apocalypse Is Coming

“It’s unequivocal now: We are taking money from the new employees and using it to pay off this liability for the old employees,” said Turner, a Gov. John Hickenlooper appointee. “And some might call that a Ponzi scheme.” – Denver Post, 6/27/17

The people in Denver who bother to read the news, especially the ones who are or will be dependent on the Colorado public employees pension fund (PERA), were greeted with a shock Tuesday. PERA is now admitting to be 42% underfunded, down from an alleged 38% underfunding last year. How on earth is it possible for the underfunding of a pension to increase during a period of time when the Dow, S&P 500, Nasdaq and fixed income markets are hitting or are near all-time highs?

And what about the valuations of these funds using realistic mark to market prices for the illiquid assets, like private equity, commercial real estate and OTC derivatives?  Harvard University is about to sell its private equity assets.  My bet is that the value received will be covered up as much as possible.  And we’ll never know where the fund was marked on its books.  But judging of the failure vs. expectations of the SNAP and Blue Apron IPOs, private equity investments are likely over-marked on the books by at least 15-20%. A market to market here would devastate the stated funding levels of every pension fund.

It’s not just Illinois, which is de facto bankrupt, and the Connecticut State pension fund, which is also de facto insolvent.  Nearly every State’s pension fund is severely underfunded, as well as most private funds.

That 42% underfunding for PERA, by the way, makes very generous actuarial assumptions about the assumed rate of return on assets vs. the assumed payouts. Those assumptions have been wrong for at least 20 years and will continue to be wrong. That’s why PERA’s – as well as most every other pension fund – has become more underfunded over the last year.

The quote at the top is from Lynn Turner, who was one of the few competent, if not respected, SEC commissioners in my lifetime. In my view, when politicians and public officials are willing to state the truth about a dire situation in public,  it implies that the situation is on the precipice and they want to be disassociated with it – i.e the rats are jumping ship.  Yesterday the Illinois State Senate minority leader resigned…

I would argue that the one of the primary reasons the Fed is working hard to keep the stock market propped up is because, if the Dow/SPX/Nasdaq were to fall 5-10% for an extended period of time – as in more than a month – the entire U.S. pension Ponzi scheme would blow up and decimate the financial system. It’s a literal black swan in full view.

This is explains the “V” rallies in the stock market when the market abruptly drops 1% on a given day – like Tuesday and Thursday this past week. The fact that the market reversed Wednesday’s overt Fed intervention on Thursday signals the possibility that the Fed is losing control.

Meanwhile, the paper price of gold has once again withstood a vicious overnight attack that began in London and continued when the Comex opened by holding up at the $1240 level and bouncing. This is the fourth time since the so-called Fed attack last week disguised by the fake news as the “fat finger” trade.

Trump “Overrules” Cabinet, Prepares To Unleash Global Trade War

While one of Trump’s recurring campaign promises was that he would “punish” China and other key US trade counterparties if elected, for taking advantage of free-trade by imposing steep tariffs and duties on foreign imports to “level the playing field”, the President’s stance changed drastically after the election, U-turning following his amicable meeting with China’s president Xi Jinping in March, but mostly as a result of pressure by his ex-Goldman advisors to keep existing trade arrangements in place and not “rock the boat.”

Now, all that may be about to fall apart.

According to Axios, behind the constant media scandals, “one of the most consequential and contentious internal debates of his presidency unfolded during a tense meeting Monday in the Roosevelt Room of the White House” where with “more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they’re hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports.”

In other words, Trump – true to his campaign promises – is set to launch a global trade wars after all, one where then main country impacted would be China, however the collateral damage would extend to Canada, Mexico, Japan, Germany and the UK.

And what may be even more striking is that Trump overruled his cabinet, as “the sentiment in the room was 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed.” Axios adds that while “no decision has been made, the President is leaning towards imposing tariffs, despite opposition from nearly all his Cabinet.”

Needless to say, if Trump follows through, the outcome would have a profound effect on U.S. economic and foreign policy; Trump will formalize his decision in the coming days.

What is also notable, is that this is the first time  – so far off the record – in which Trump has openly defied his Wall Street establishment advisors, while siding with the Bannon “populist” front:

In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.

Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.

As Axios adds, the reason why Trump defied the guidance of his Wall Street-derived advisors is Trump’s base “which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight.

This, more than anything, should send shivers down Wall Street’s spine, because for all his bluster and outrageous media outbursts, Trump had largely been in Wall Street’s pocket so far.

Not anymore, and with Trump’s base hell bent on punishing the 1% (which includes Wall Street), if Trump indeed launches global trade war, his future decisions will become increasingly market unfriendly.

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.

END

Project Veritas hits CNN again where it shows its internal culture of hate and the creation of fake news:

(COURTESY ZEROPOINTNOW/Project Veritas)

O’Keefe’s Third Undercover Film Exposes CNN’s Internal Culture Of Hate And The Actual Creation of Fake News

Content originally published at iBankCoin.com

Project Veritas founder James O’Keefe has just capped off a week destroying CNN’s last shred of credibility with a Friday morning release of an undercover encounter with another employee of the beleagured network. Jimmy Carr, a hate-filled Associate Producer, said that virtually everyone he knows at the network – surprise – absolutely hates President Trump.

Carr: “On the inside, we all recognize he is a clown, that he is hilariously unqualified for this, he’s really bad at this and that he does not have America’s best interests. We recognize he’s just f*cking crazy.”

“Here’s the deal, this is a man who’s not actually a Republican… He just adopted that because that was the party he thought he could win in. He doesn’t believe anything that these people believe.”

Carr goes on to rattle off a laundry list of grievances against the President, stating that “90% of us are on board with just the fact that he’s crazy.”

Carr didn’t stop at the President. When asked about the election, the Associate Producer said American voters are “Stupid as shit,” before insulting Kellyanne Conway – a top Trump advisor and the first woman to run a successful Presidential campaign.

Ratings

Carr then echoed what another CNN producer admitted to a Project Veritas operative – it’s all about Ratings.

“It’s decisions made by people higher than me and if they go wow, your ratings are soaring right now, keep up what you’re doing. Well, what we’re doing is Russia, ISIS, London terror, shooting in Chicago, that’s it.

Fake News Bust

O’Keefe also caught CNN selectively editing out a Trump supporter’s answer during an election panel to make him appear stupid when giving an answer to the topic of illegal immigrants voting in the 2016 election.

Entire video:

.

Week of horror for CNN

Undercover footage released earlier in the week dealt devastating blows to the credibility-damaged network whose President, Jeff Zucker, may be on the chopping block if a merger between AT&T and CNN parent company Time Warner is approved.

On Monday, Project Veritas released undercover footage of a candid discussion with CNN producer John Bonifield, in which the “Very Fake News” network employee admitted that the whole Russia story against President Trump is a “Mostly B.S.” ratings grab by CNN’s CEO Jeff Zucker.

Bonifield also admitted that he hasn’t seen any evidence of President Trump committing a crime.

But all the nice cutesy little ethics that used to get talked about in journalism school, you’re just like, that’s adorable. That’s adorable. This is a business. –John Bonifield

Then on Wednesday O’Keefe captured footage of CNN host Van Jones saying that the Russia – Trump story is “a big nothing burger.”

.

Van Jones responded with a CNN op-ed, calling the video a hoax and “highly edited right wing propaganda” made by a “con man.”

[F]or those of you unfamiliar with James O’Keefe and his misnamed  “Project Veritas,” here’s a helpful recap: James O’Keefe is a notorious con man whose infamy arises from his addiction to pulling the same media stunts, over and over again. –Van Jones

(Perhaps the Project Veritas operative approached Van Jones off camera to role-play as a conservative for fun?)

White House Endorses

On Tuesday, White House Deputy Press Secretary Sarah H. Sanders encouraged people to watch the O’Keefe video of CNN Producer John Bonifield admitting the Russia story was “Mostly B.S.” pushed by CEO Jeff Zucker for ratings.

“whether it’s accurate or not, I don’t know – I think if it is accurate, it is a disgrace to all of media, to all of journalism.” –Sarah H. Sanders

Huckabee’s endorsement drew the ire of the MSM, however instead of discussing the content of O’Keefe’s video – pundits like Chuck Todd did a full Exorcist head swivel over the fact that Huckabee hadn’t personally verified each claim in the undercover sting (which CNN confirmed the authenticity of).

“CNN stands by our medical producer John Bonifield.  Diversity of personal opinion is what makes CNN strong, we welcome it and embrace it,” CNN said in a statement. –USA Today

Death knell?

Will a cleanout of CEO Jeff Zucker and perhaps a few other sacrificial wolves restore credibility to the news network that’s been faking it for years? I wouldn’t hold my breath as long as guys like James O’Keefe are around to expose the shills.

When asked about  and hidden-cameras, @ChrisCuomo said: “Sometimes that’s when you’re the most honest.”

Get ready. 

This is fascinating:  Trump is now calling for the “immediate'” repeal of Obamacare is the Senate deal falls apart. He then advocates  a new deal in 6 months or so
(courtesy zero hedge)

Trump Calls For “Immediate” Repeal Of Obamacare If Senate Deal Fails

Instead of lashing out at various media personalities on Twitter this morning, President Trump has instead pivoted to Healthcare Law, and in an early morning tweet has endorsed a strategy for replacing Obamacare may resonate with conservatives like Kentucky’s Rand Paul: Repeal now, replace later.  Trump tweeted: “If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date!”

If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date!

The tweet is notable because it is the polar opposite of what Trump told Paul Ryan shortly after he won the election and shortly before Congress went into session, as Axios reminds us. And, more confusing, part of the reason why the House GOP leadership didn’t run with a clean repeal vote, as they’d done many times under President Obama, was because Trump had made it clear to Ryan he wouldn’t sign the bill.

Furthermore, Axios adds that Trump is “frustrated, like every other Republican involved in the jammed-up health care negotiations. HHS Secretary Tom Price met with senior officials at the White House yesterday, and a source familiar with the meeting said the mood was far more negative than the day before” which means that moderate Republican senators “aren’t buying what Mitch McConnell is offering them. At least not yet.”

So with a deal seemingly out of the question, Trump is preparing for a Plan B, even if it is with a 6 month delay and 180-degree the opposite of what he pitched at the start of the year.

As for the Senate, after originally planning to go ahead with a planned “do or die” vote, McConnell said Wednesday he would delay the vote until after the July 4 recess, as the GOP still lacks the votes.

The question now is how will moderates like Maine’s Susan Collins and Alaska’s Lisa Murkowski react to Trump’s plan? Both have raised questions about the revised bill’s cuts to medicare spending in their states, something that would negatively impact chronically ill elderly constituents who tend to vote in larger numbers than younger cohorts of the population.

end

This will not be good for 2nd quarter GDP:  Personal consumption falters and together with a fall in the deflator causes the savings rate in the USA to soar.  Also the UK savings rate also soared which puts a damper on the economy:

(courtesy zero hedge)

Savings Rate Soars To 8-Month Highs As Trumphoria Fades

Following the collapse in UK savings rate (to 54 year lows) this morning…

US Real Personal Spending rates disappointed in the US (rising just 0.1% MoM – the weakest since February). While incomes rose slightly more than expected, spending growth was just 0.1% MoM – the weakest since August 2016.

The PCE Deflator grew at its slowest since Nov 2016…

All of which sent the savings rate to its highest since September…after plunging into year end 2016 on Trump confidence it has since surged as spending has slowed down

Not exactly the signal that everyone is exuberantly buying the Trump trade.

end

What a joke: soft data Chicago PMI spikes to 3 yr highs and beats by 7 standard deviations while at the same time Chicago and the state of Illinois cannot get a budget together for over 3 years:

what a farce..

(courtesy zerohedge)

WTF Chart Of The Day – Chicago PMI Spikes To 3 Year High, Beats By 7 Standard Deviations

Even as the rest of the ‘soft’ survey data catches down to ‘hard’ data’s ugly reality…

Someone or something in Chicago is exuberantly celebrating Trumpmania as the city collapses under a hail of bullets.

Beating expectations by 7 standard deviations, June PMI spike to 65.7 – the highest since May 2014.

This is the fifth consecutive increase in busines confidence with new orders at their highest since May 2014 and order backlogs spiking to their highest since July 1994.

The Employment indicator slipped slightly to 56.6 from 57.1 in May. Panelists were concerned about finding reliable and well qualified workers and there was a rise in temporary hires, a growing job market trend in recent months.

Inflationary pressures at the factory gate remained broadly stable after easing for three consecutive months. Panelists reported a continued rise in the price of steel and plastic products, although they mentioned that suppliers were holding off passing through prices increases.

“June’s MNI Chicago Business Barometer Survey is a testament to firms’ expectations of a busy summer. With Production and New Orders touching levels not seen in three years, rising pressure on backlogs and delivery times has led to higher optimism among firms both in general business conditions and the local economy,” said Shaily Mittal, Senior Economist at MNI Indicators.

How long before they ‘revise’ this farcical print?

end

Soft data U. of Michigan Consumer Confidence slips to 7 month lows..hope fades..

(courtesy zero hedge)

UMich Consumer Confidence Slips To 7-Month Lows As Hope Fades

Despite modestly beating expectations, UMich consumer sentiment for June dropped to 95.1 – the lowest since Nov 2016 – led by a collapse in ‘hope’ for the future.

Inflation expectations for the medium-term fell very modestly but both short- and medium-term remain near record lows.

Personal finance expectations improved in June as did the percentage of Americans expecting higher incomes. However, the percentage of Americans who expect a comfortable retirement dropped notably… and the percentage of Americans who expect the country to have contonuous good times for the next 12 months also tumbled.

The survey shows a widening divide between how Americans view the current state of the economy and prospects for a potential extra boost from Congress and the White House, as lawmakers wrangle over health care and taxes. While 51 percent of all consumers reported recent improvement in their finances — the highest share since 2000 — Republicans are becoming less sanguine about the situation in Washington, according to the report.

For the first time since the election, a bigger share of consumers expected a downturn in the next five years than an uninterrupted expansion. Even so, the average level of sentiment in the first half was the best in 16 years, which supports the household spending that accounts for 70 percent of the economy.

It seems news from the government is the biggest drag on sentiment…

The partisan divide still meant that June’s Sentiment Index of 95.1 was nearly equal to both the average (95.7) between the optimism of Republicans and the pessimism of Democrats and the value for Independents (94.6). Surprisingly, the optimism among Republicans and Independents has largely resisted declines in the past several months despite the decreased likelihood that Trump’s agenda will be passed in 2017.

“Increasing uncertainty about future prospects for the economy has thus far been offset by the recent strength in jobs and incomes,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “The data provide no indication of an imminent downturn nor do the data provide any indication of a resurgent boom in spending.”
end
As is my custom: let us close out the week with this great offering from greg Hunter of USAWatchdog
(courtesy Greg Hunter/USAWatchdog)

CNN Proven Very Fake News, Dollar Tanking, Yellowstone Could BlowBy Greg Hunter On June 30, 2017 In Weekly News Wrap-Ups

A CNN producer and a top on air talent were both caught on hidden camera admitting the so-called Trump collusion story was a “nothing burger,” “pretty much BS” and was being followed “because of ratings.” Project VERITAS produced the videos that aired just after CNN was forced to retract and take down a false story on a Trump supporter and friend. A $100 million lawsuit was reportedly threatened, and the story was quickly taken down. Apologies were made by CNN after some involved with the story were forced to quit. It appears none of the bosses in charge took any of the blame.

The U.S. dollar continued to sink in value. It was down in value a half percent in a single day on Thursday. Gregory Mannarino of TradersChoice.net says a declining U.S. dollar is desired by the Treasury Department and the Federal Reserve. The idea is to pay back borrowed dollars with devalued currency. Mannarino thinks they will continue to “kill the dollar,” which will cause more inflation for “We the People.”

There are earthquakes happening around the Yellowstone Caldera, and some 800 have recently been detected. This worries scientists because the Caldera has been dormant for hundreds of years. Scientist say if Yellowstone blows, it could kill 90% of the people living within 600 miles. Of course, the mainstream press is so worried about following the false narrative of the Trump/Russia collusion story they fail to report things like Yellowstone and the potential problems.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

http://usawatchdog.com/cnn-proven-very-fake-news- dollar-tanking-yellowstone-could-blow/

After the Wrap-Up:

Analyst Lynette Zang from ITM Trading will be the guest for the Early Sunday Release. Zang, who has deep Wall Street experience, contends that another crash is close at hand because the wealthy are exiting the stock and bond markets in droves. Don’t miss it.

-END-

We will see you MONDAY night

Have a great evening/weekend.

To all our Canadian friends, a very happy Canada day

To all our American friends, a very happy 4th of July holiday to you all.

Harvey.

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