Jan 30/OPTIONS EXPIRY ON GOLD AND SILVER END TOMORROW/GOLD DOWN $4.85 TO $1336.90/SILVER DOWN 6 CENTS TO $17.10/GOLD EFP ISSUANCE: A LARGE 11,909 CONTRACTS/SILVER EFP ISSUANCE: 1461CONTRACTS/HOUSE INTEL COMMITTEE VOTES TO MAKE PUBLIC THE 4 PAGE FISA WARRANT/

 

 

GOLD: $1336.90 DOWN $4.85

Silver: $17.10 DOWN 6 cents

Closing access prices:

Gold $1338.50

silver: $17.13

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: $1345.27 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1335.75

PREMIUM FIRST FIX: $7.79

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SECOND SHANGHAI GOLD FIX: $1362.55

NY GOLD PRICE AT THE EXACT SAME TIME: $1335.55

Premium of Shanghai 2nd fix/NY:$27.00

SHANGHAI REJECTS FULLY NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1345.70

NY PRICING AT THE EXACT SAME TIME: $1343.45

LONDON SECOND GOLD FIX 10 AM: $1344.90

NY PRICING AT THE EXACT SAME TIME. $1346.00???

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 2 NOTICE(S) FOR 100 OZ.

TOTAL NOTICES SO FAR: 698 FOR 69800 OZ (2.1710 TONNES),

For silver:

jANUARY

1 NOTICE(S) FILED TODAY FOR

5,000 OZ/

Total number of notices filed so far this month: 730 for 3,650,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $10,959/OFFER $11,059  DOWN $183 (morning)

Bitcoin: BID/   $10,101/   $10,200 offer down 1035  (CLOSING/5 PM)

end

EXPECT SOME TORMENT IN BOTH GOLD AND SILVER TO END TOMORROW AS WE HAVE LONDON BASED OPTIONS EXPIRING AT AROUND 11 AM WEDNESDAY.

Let us have a look at the data for today

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In silver, the total open interest ROSE BY A TINY SIZED 361 contracts from 200,827 RISING TO 201,188 DESPITE YESTERDAY’S BIG 26 CENT FALL IN SILVER PRICING.  WE HAD ZERO COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  1460 EFP’S FOR MARCH AND AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1460 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE  MAJOR PLAYERS WILLING TO TAKE ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 1460 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S.

ACCUMULATION FOR EFP’S/SILVER/ STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY:

47,174 CONTRACTS (FOR 21 TRADING DAYS TOTAL 47,174 CONTRACTS OR 235.870 MILLION OZ: AVERAGE PER DAY: 2246 CONTRACTS OR 11.231 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  235.8 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 33.6% OF ANNUAL GLOBAL PRODUCTION

RESULT: A TINY SIZED LOSS IN OI COMEX DESPITE THE BIG 26 CENT FALL IN SILVER PRICE.  WE HOWEVER HAD A GOOD SIZED EFP ISSUANCE OF 1460 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 1460 EFP’S WERE ISSUED FOR TODAY  FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 1333 OI CONTRACTS i.e. 1460 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 361  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 26 CENTS AND A CLOSING PRICE OF $17.16 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A GOOD AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just OVER 1 BILLION oz i.e. 1.0060 BILLION TO BE EXACT or 144% of annual global silver production (ex Russia & ex China).

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

In gold, the open interest FELL  BY A LARGE 8799 CONTRACTS DOWN TO 566,441 WITH THE GOOD SIZED FALL IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($11.25). IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR TODAY AND IT TOTALED A GOOD SIZED  11,909 CONTRACTS OF WHICH FEBRUARY SAW 3284 CONTRACTS ISSUED AND  APRIL SAW THE ISSUANCE OF 8625 CONTRACTS.    The new OI for the gold complex rests at 558,239. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DUE TO THE DELAY IN THE RELEASE OF YESTERDAY’S DATA YOU CAN BET THE FARM THAT THEY HAVE DELAYED THE RELEASE OF MANY EFPS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR JANUARY COMEX. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE TODAY WE HAVE A GAIN OF 3110  CONTRACTS: 8799 OI CONTRACTS DECREASED AT THE COMEX AND A STRONG SIZED  11,909 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. EXPECT HUGE NUMBERS OF EFP’S TO BE ISSUED AS WE APPROACH FIRST DAY NOTICE IN THE GOLD FEB COMEX CONTRACT, WEDNESDAY JAN 31.2018

YESTERDAY, WE HAD 4123 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 209,695 CONTRACTS OR 20.9695 MILLION OZ OR 652.22 TONNES (21 TRADING DAYS AND THUS AVERAGING: 9,985 EFP CONTRACTS PER TRADING DAY OR 998,500 OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 21 TRADING DAYS: IN  TONNES: 652 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 652/2200 TONNES =  29.63% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JANUARY ALONE.

Result: A  GOOD SIZED DECREASE IN OI AT THE COMEX WITH THE LARGE SIZED FALL IN PRICE IN GOLD TRADING YESTERDAY ($11.25). IT IS WITHOUT A DOUBT THAT MANY OF THE DEPARTED COMEX LONGS ARE WAITING TO RECEIVE A PRIVATE EFP CONTRACT FOR EITHER FEBRUARY OR APRIL AND THESE GUYS ARE STILL NEGOTIATING THEIR DEAL. WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 11,909 AS THESE HAVE ALREADY BEEN NEGOTIATED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 11,909 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 3110 contractON THE TWO EXCHANGES:

11909 CONTRACTS MOVE TO LONDON AND  8799 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 9.67 TONNES).

we had: 2 notice(s) filed upon for 200 oz of gold.

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

GLD

With gold down another $4.85, we had a big changes in gold inventory at the GLD/a withdrawal of 1.47 tonnes of gold/

Inventory rests tonight: 846.67 tonnes.

SLV/ 

A NO CHANGES IN SILVER INVENTORY AT THE SLV/ INVENTORY RESTS AT 313.896 MILLION OZ/

end

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

1. Today, we had the open interest in silver ROSE BY A TINY 361 contracts from 200,827 DOWN TO 201,188 (AND now A LITTLE FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH  THE FAIR SIZED LOSS  IN PRICE OF SILVER  (26 CENTS WITH RESPECT TO  YESTERDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 1460 PRIVATE EFP’S FOR MARCH  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD MINIMAL COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI GAIN AT THE COMEX OF  361 CONTRACTS TO THE 1460 OI TRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A GAIN OF 1821 OPEN INTEREST CONTRACTS.  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES: 9.105 MILLION OZ!!!

RESULT: A TINY SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE FAIR SIZED LOSS  OF 26 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER GOOD 1460 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR JANUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 34.99 points or 0.99% /Hang Sang CLOSED DOWN 359.60 pts or 1.09% / The Nikkei closed DOWN 337.37 POINTS OR 1.43%/Australia’s all ordinaires CLOSED DOWN 0.895%/Chinese yuan (ONSHORE) closed UP at 6.3235/Oil DOWN to 64.92 dollars per barrel for WTI and 69.06 for Brent. Stocks in Europe OPENED IN THE RED .   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.3235. OFFSHORE YUAN CLOSED DOWN AGAINST  THE ONSHORE YUAN AT 6.3279//ONSHORE YUAN MUCH STRONGER AGAINST THE DOLLAR/OFF SHORE MUCH STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  MUCH WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT HAPPY TODAY.(STRONGER CURRENCY BUT WEAK MARKETS )

 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

b) REPORT ON JAPAN

3 c CHINA

4. EUROPEAN AFFAIRS

European bond tank  (yields rise), stocks tank today.
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Turkey/USA Syria

you knew that this was coming:  a military showdown in Syria

( zerohedge)

ii)Putin responds to Trump’s Kremlin list stating it is an unfriendly act.  Trump so far will not engagein any sanctions and thus Putin will  do the same

( zerohedge)

6 .GLOBAL ISSUES

Israeli leaders outraged over new Polish Nazi war crimes bill that will punish anybody that suggests that the Polish government or its people bore some responsibility for the war crimes committed on their land during the holocaust

( London’s Financial times/)

7. OIL ISSUES

Oil and gasoline drop after a surprise crude oil build

 

( zerohedge)

8. EMERGING MARKET

9. PHYSICAL MARKETS

i)Our banker friends are doing a great job crushing cryptos again

( zerohedge)

ii)How will the deniers of gold market rigging explain the fines and convictions

( TFMetals/Craig Hemke/gATA)

iii)In case you missed yesterday’s big story:  3 banks and 8 individuals charged in gold/silver spoofing

( Reuters/GATA)

iv)Bill Murphy explains why our precious metals will rise in price

( Kitco/Bill Murphy/GATA)

 

10. USA stories which will influence the price of gold/silver

i)it seems that Met Life owes a lot of pensioners money that it had failed to pay and this may add up to tens of thousands of workers for the past years.  The stock tumbled 10% in after hours.  The big question is this a “lone wolf” with respect to MetLife or does this extend to other insurers who engaged in this type of deal

( zerohedge)

ii)A housing bust may be just around the corner:  rates have now hit their highest level since 2014

( Mish Shedlock/Mishtalk)

 

iii)Home prices are rising faster than incomes:

( zerohedge)

 

iv)SWAMP STORIES

 

a)It looks like we have some text messages referring to destroying evidence etc  The FBI is still withholding 85% if the texts and redacting many items that they refer to as personal.

The FBI is doing a good job of preventing the swamp from being drained

( zerohedge)

b)The house Intel committee votes to make the FISA memo public. The fun begins

( zerohedge)

c)FBI director Wray supposedly was shocked by the FISA warrant and more importantly there is talk that McCabe asked agents to change with 302’s which is without a doubt an obstruction of justice

( zerohedge)

d)Seems the noose is getting tighter and tighter around McCabe’s neck.  The House Judiciary tells the FBI to preserve all emails of McCabe especially around the Trump election and afterwards.

( zerohedge)

 

Let us head over to the comex:

The total gold comex open interest  FELL BY A CONSIDERABLE 8799 CONTRACTS DOWN to an OI level 556,441 of  WITH THE GOOD SIZED FALL IN THE PRICE OF GOLD ($11.25 FALL WITH RESPECT TO YESTERDAY’S TRADING).   WE HAD CONSIDERABLE COMEX GOLD LIQUIDATION. HOWEVER THE CME REPORTS THAT  THE BANKERS ISSUED ANOTHER STRONG COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A GOOD SIZED 3284 EFP’S ISSUED FOR FEBRUARY  AND A HUGE 8625 EFP’s  FOR APRIL:  TOTAL  11,909 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON FORWARD… THE COMEX IS NOW AN ABSOLUTE FRAUD!!

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 3110 OI CONTRACTS IN THAT 11,909 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST 8799 COMEX CONTRACTS. NET GAIN ON THE TWO EXCHANGES: 3110 contracts OR 311,000   OZ OR 9.67 TONNES,

Result: A  STRONG DECREASE IN COMEX OPEN INTEREST WITH THE FAIR SIZED LOSS IN YESTERDAY’S GOLD TRADING ($11.25.) WE HAD CONSIDERABLE COMEX GOLD LIQUIDATION.  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 3110 OI CONTRACTS..

We have now entered the active contract month of JANUARY. The open interest for the front month of JANUARY saw it’s open interest FALL by 0 contracts REMAINING AT 2.  We had 0 notices served upon yesterday so we GAINED 0  contract or an additional NIL oz of gold will   stand AT THE COMEX in this non active month of January as these guys joined others in obtaining a London based forward contract.

FEBRUARY saw a LOSS of 44,722 contacts DOWN to 32,327.  March saw a GAIN of 59 contracts UP to 2197.  April saw a GAIN of 31,373 contracts UP to 377,973. WE HAVE ONE MORE READING DAY BEFORE FIRST DAY NOTICE ON WEDNESDAY JAN 31. THE AMOUNT STANDING FOR FEBRUARY DELIVERY WILL BE A DILLY!!

We had 2 notice(s) filed upon today for 200 oz

PRELIMINARY VOLUME TODAY ESTIMATED;   not available

FINAL NUMBERS CONFIRMED FOR YESTERDAY:  not available

comex gold volumes are RISING AGAIN

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And now for the wild silver comex results.

Total silver OI ROSE  BY A TINY 361  CONTRACTS FROM 200,700 DOWN TO 201,188 DESPITE YESTERDAY’S GOOD SIZED 26 CENT LOSS.  WE WERE ALSO INFORMED THAT WE HAD ANOTHER FAIR SIZED 1460 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (WITH 0 EFP CONTRACTS FOR FEBRUARY..AS SOMEBODY WAS IN URGENT NEED OF METAL AND NEEDED TO GO TO LONDON TO GET IT  AND ZERO FOR ALL OTHER MONTHS)  TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON: THE TOTAL EFP’S ISSUED: 1460.   THE SILVER BOYS HAVE STARTED TO MIGRATE TO LONDON FROM THE START OF DELIVERY MONTH AND CONTINUING RIGHT THROUGH UNTIL FIRST DAY NOTICE JUST LIKE WE ARE WITNESSING TODAY. USUALLY WE NOTED THAT CONTRACTION IN OI OCCURRED ONLY DURING THE LAST WEEK OF AN UPCOMING ACTIVE DELIVERY MONTH AS WE HAVE JUST SEEN IN GOLD TODAY. THIS PROCESS HAS JUST BEGUN IN EARNEST IN SILVER STARTING IN SEPTEMBER 2017. HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS. NICK LAIRD WAS KIND ENOUGH TO SUPPLY US THE TOTAL FOR 2017 GOLD EFP’S AND IT WAS 6600 TONNES FOR THE ENTIRE YEAR.  WE HAD  ZERO LONG COMEX SILVER LIQUIDATION AND A SMALL SIZED RISE IN TOTAL SILVER OI. WE ARE ALSO WITNESSING A FAIR AMOUNT OF SILVER OUNCES STANDING FOR COMEX METAL IN THIS NON ACTIVE JANUARY AS WELL AS THAT CONTINUAL MIGRATION OF EFPS OVER TO LONDON. ON A PERCENTAGE BASIS THERE ARE MORE EFP’S ISSUED FOR GOLD THAN SILVER.  ON A NET BASIS WE GAINED 1821 SILVER OPEN INTEREST CONTRACTS:

361 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1460 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN TWO EXCHANGES: 1821 CONTRACTS

We are now in the poor non active delivery month of January and here the OI LOST 1 contract FALLING TO 1.  We had 1 notice served upon yesterday, so we GAINED 0 contract or an additional NIL oz will stand for delivery AT THE COMEX

February saw a LOSS OF 12 OI contracts FALLING TO 136. The March contract LOST 1381 contracts DOWN to 132,920.

We had 1 notice(s) filed for NIL 5,000 for the January 2018 contract for silver

INITIAL standings for JANUARY

Jan 30/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 47,842.227 oz
SCOTIA
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
   nil OZ
No of oz served (contracts) today
2 notice(s)
 200 OZ
No of oz to be served (notices)
2 contracts
(200 oz)
Total monthly oz gold served (contracts) so far this month
698 notices
69800 oz
2,1710 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 xxx oz
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory movement into the dealer accounts:  nil oz
we had 1 withdrawals out of the customer account:
 i) Out of Scotia:  47,842.227 oz
total withdrawal: 47,842.227  oz
we had 0 customer deposit
total deposits: nil oz
we had 0 adjustments
total registered or dealer gold:  567,868.167 oz or 17.663 tonnes
total registered and eligible (customer) gold;   9,243,336.874 oz 287.51 tones

For JANUARY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 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 JANUARY. contract month, we take the total number of notices filed so far for the month (698) x 100 oz or 69,800 oz, to which we add the difference between the open interest for the front month of JAN. (2 contracts) minus the number of notices served upon today (2 x 100 oz per contract) equals 69,800 oz, the number of ounces standing in this active month of JANUARY

Thus the INITIAL standings for gold for the JANUARY contract month:

No of notices served (696 x 100 oz or ounces + {(2)OI for the front month minus the number of notices served upon today (2 x 100 oz which equals 69,800 oz standing in this active delivery month of JANUARY (2.1710 tonnes). THERE IS 17.629 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL STAND IN THIS NON ACTIVE DELIVERY MONTH OF JANUARY(CME correction from Friday

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ON FIRST DAY NOTICE FOR JANUARY 2017, THE INITIAL GOLD STANDING: 3.904 TONNES STANDING

BY THE END OF THE MONTH: FINAL: 3.555 TONNES STOOD FOR COMEX DELIVERY AS THE REMAINDER HAD TRANSFERRED OVER TO LONDON FORWARDS.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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 17 MONTHS 67 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

DECEMBER FINAL standings

Jan 30 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 1,258,843.95 oz
CNT
HSBC
Malca
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 606,295.500 OZ
 scotia
No of oz served today (contracts)
1
CONTRACT(S)
(5,000 OZ)
No of oz to be served (notices)
0 contracts
(NIL oz)
Total monthly oz silver served (contracts) 730 contracts

(3,650,000 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

we had no inventory movement at the dealer side of things

total inventory movement dealer: nil oz

we had 1 inventory deposits into the customer account

 

i) into Brinks: 606,295.500

total inventory deposits: 606,295.500 oz

we had 3 withdrawals from the customer account;

i) out of CNT: 623,340.04 oz

ii) Out of HSBC: 600,811.04

iii) Out of Malca: 34,692.870

total withdrawals;  1,258,843.95 oz

we had 0 adjustment

total dealer silver:  45.461 million

total dealer + customer silver:  247.355 million oz

The total number of notices filed today for the JANUARY. contract month is represented by 1 contract(s) FOR 5,000 oz. To calculate the number of silver ounces that will stand for delivery in JANUARY., we take the total number of notices filed for the month so far at 730 x 5,000 oz = 3,650,000 oz to which we add the difference between the open interest for the front month of JAN. (1) and the number of notices served upon today (1 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY contract month: 730(notices served so far)x 5000 oz + OI for front month of JANUARY(1) -number of notices served upon today (1)x 5000 oz equals 3,650,000 oz of silver standing for the JANUARY contract month. This is VERY GOOD for this NONACTIVE delivery month of JANUARY.  WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL  OZ WILL  STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JANUARY AS QUEUE JUMPING CONTINUES AS WE PROCEED TO MONTH’S END.

ON FIRST DAY NOTICE FOR THE JANUARY 2017 CONTRACT WE HAD 3.790 MILLION OZ STAND.

THE FINAL STANDING: 3,730 MILLION OZ

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ESTIMATED VOLUME FOR TODAY: n/a

CONFIRMED VOLUME FOR YESTERDAY:  n/a CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF n/a CONTRACTS EQUATES TO  n/a MILLION OZ OR n/a% OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

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 

1. Sprott silver fund (PSLV): NAV RISES TO -1.71% (Jan 29/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.20% to NAV (Jan 29/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.71%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.20%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV FALLS TO 3.46%: NAV 13.98/TRADING 13.50//DISCOUNT 3.46%

END

And now the Gold inventory at the GLD/

jan 30/with gold down by $4.85/GLD shed another 1.47 tonnes of gold from its inventory/inventory rests at 846.67 tonnes

JAN 29/with gold down $11.25, the GLD shed 1.18 tonnes of gold/inventory rests at 848.14 tonnes

jan 26/2018/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

jan 25/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

Jan 24/A HUGE DEPOSIT OF 2.65 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 849.32 TONNES

Jan 23/NO CHANGE IN GOLD INVENTORY DESPITE GOLD’S RISE/INVENTORY RESTS AT 846.67 TONNES

Jan 22/a huge deposit of 5.71 tonnes of gold despite a drop in price/inventory rests at 846.67 tonnes. In 3 trading days, the GLD has added 17.71 tonnes/the bankers are now in trouble!!

Jan 19/no change in gold inventory at the GLD/Inventory rests at 840.76 tonnes

Jan 18/SHOCKINGLY A HUGE DEPOSIT OF 11.80 TONNES WITH GOLD DOWN ALMOST $12.00/INVENTORY RESTS AT 840.76

Jan 17/no changes in gold inventory at the GLD/inventory rests at 828.96 tonnes

Jan 16/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.96 TONNES

Jan 12/no changes in inventory at the GLD despite the rise in gold price/inventory rests at 828.96 tonnes

Jan 11/ANOTHER IDENTICAL WITHDRAWAL OF 2.95 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.96 TONNES

Jan 10/with gold up today, a strange withdrawal of 2.95 tonnes/inventory rests at 831.91 tonnes

Jan 9/no changes in gold inventory at the GLD/Inventory rests at 834.88 tonnes

Jan 8/with gold falling by a tiny $1.40 and this being after 12 consecutive gains, today they announce another 1.44 tonnes of gold withdrawal from the GLD/

Jan 5/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.32 TONNES

Jan 4/2018/no change in gold inventory at the GLD/Inventory rests at 836.32 tonnes

Jan 3/a huge withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 836.32 tonnes

Jan 2/2018/no changes in gold inventory at the GLD/inventory rests at 837.50 tonnes

Dec 29/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.50 TONNES

Dec 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 837.50 TONNES

Dec 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/ INVENTORY RESTS AT 837.50 TONNES

Dec 26/no change in gold inventory at the GLD

Dec 22/ A DEPOSIT OF 1.48 TONNES OF GOLD INTO GLD INVENTORY/INVENTORY RESTS AT 837.50 TONNES

Dec 21′ NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.02 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Jan 30/2018/ Inventory rests tonight at 846.67 tonnes

*IN LAST 316 TRADING DAYS: 94.48 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 250 TRADING DAYS: A NET 62.83 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory

Jan 30/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 29/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 26.2018/inventory rests at 313.896  million oz

Jan 25/with silver up today and yesterday, the SLV could only muster a gain of 848,000 oz

Inventory rests at 313.896 oz

jan 24/NO CHANGE IN SILVER INVENTORY DESPITE THE GOOD ADVANCE IN PRICE/INVENTORY RESTS AT 313.048 MILLION OZ/

Jan 23/ANOTHER HUGE WITHDRAWAL OF 1.131 MILLION OZ OF SILVER DESPITE THE TINY LOSS/THE CROOKS ARE USING THE INVENTORY TO RAID ON SILVER.

JAN 22.2018/with silver down by 5 cents/ the crooks at the SLV liquidate 1.321 million oz of silver/inventory rests at 314.179 million oz/

Jan 19/ no changes in silver inventory at the SLV/inventory rests at 315.500 million oz/

jan 18/A WITHDRAWAL OF 848,000 OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 315.500 MILLION OZ/

Jan 17/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Jan 16/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.348  MILLION OZ

Jan 12/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Jan 11/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.348 MILLION OZ/

Jan 10/with silver up again, we had a huge withdrawal of 1.227 million oz from the SLV/inventory rests at 316.348 million oz

Jan 9/a withdrawal of 848,000 oz from the SLV/Inventory rests at 317.575 million oz/

jan 8/no change in silver inventory at the SLV/Inventory rests at 318.423 million oz/

Jan 5/DESPITE NO CHANGE IN SILVER PRICING, WE HAD A HUGE WITHDRAWAL OF 2.026 MILLION OZ/INVENTORY RESTS AT 318.423 MILLION OZ.

Jan 4.2018/a slight withdrawal of 180,000 oz and this would be to pay for fees/inventory rests at 320.449 million oz/

Jan 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.629 MILLION OZ.

Jan 2/WITH SILVER UP DRAMATICALLY THESE PAST 4 TRADING DAYS, THE FOLLOWING MAKES NO SENSE: WE HAD A WITHDRAWAL OF 2.83 MILLION OZ FROM THE SLV

INVENTORY RESTS AT 320.629 MILLION OZ/

Dec 29/no changes in silver inventory at the SLV/inventory rests at 323.459 million oz/

Dec 28/DESPITE THE RISE IN SILVER AGAIN BY 13 CENTS, WE LOST ANOTHER 1,251,000 OZ OF SILVER FROM THE SILVER.

Dec 27/WITH SILVER UP AGAIN BY 17 CENTS, WE LOST ANOTHER 802,000 OZ OF SILVER INVENTORY/WHAT CROOKS/INVENTORY RESTS AT 324.780 MILLION OZ/

Dec 26/no change in silver inventory at the SLV./Inventory rests at 325.582

Dec 21/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.227 MILLION OZ/

.

Jan 30/2017:

Inventory 313.896 million oz

end

6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration

+ 1.74%
12 Month MM GOFO
+ 2.11%

end

Major gold/silver trading /commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

London Property Market Tumbles As Glut of Luxury Apartments Grows To 3,000

– London property market tumbles as glut of luxury apartments grows to 3,000
– Property crisis in London as over half of 1,900 luxury apartments built 2017 fail to sell
– London’s still high priced property causes companies to locate offices elsewhere
– At current rates, glut of London properties will take three years to sell
– Leading London-based estate agents Foxtons’ sees 42% drop in earnings, yoy
– UK’s largest estate agent issues second profit warning in three months
– Number of homes sold in December fell to 99,100, lowest level since Nov 2016
–  The ‘Shard disaster’ – Ten apartments at top of London’s largest skyscraper, all priced over £50m and in five years not a single one has sold
– Property gold? Diversify and own the physical property of real gold

Editor: Mark O’Byrne

There is much talk of bubbles bursting of late. Bitcoin, bonds have been considered in this regard but so far very little consideration of the property bubbles in London, Sydney, Toronto, Vancouver, Hong Long and other major cities.

London’s property market is another market to consider when looking for evidence that the party is over when it comes to frothy, record-high asset prices.

On average, UK properties take around six weeks to sell. London properties have been consistently below average, with many taking less than a day to go from ‘For Sale’ to ‘Under Offer’. However, in recent months, three London regions – West, North-West and South-West – appeared in the slowest 10 postcode areas for property sales.

According to this research by the Homeowners Alliance, West London has taken the very bottom spot after properties spent an average of 107.9 days on the market as of last month.

This is in line with other data that shows property prices in the capital have fallen for the first time since 2009.

Delicate buyers: London becomes price-sensitive

One of the first things someone outside of London says about the city is how expensive it is. They often say it as if those of us who are from there have never noticed.

Arguably, this has been the case for the last eight years or so when it comes to London’s luxury properties. But it seems many buyers are waking up to the sheer madness of paying millions for a tiny shoe box small apartment, that is in the no man’s land of Brexit and majorly exposed to the vulnerable indebted UK economy and a further devaluation of the pound.

The Guardian reports that more than half of the 1,900 ultra-luxury apartments built in London last year failed to shift. There are now an estimated 3,000 unsold luxury properties, such as these, in the capital. These are the apartments that are priced above £1,500 per square-foot.

For the slightly cheaper apartments, priced at between £1,000-£1,500 per sq ft, there are 14,000 unsold properties. The average price per sq ft across the country is £211.

In the West of London (the worst performing area in the UK in terms of days sold) Savills is marketing a two-bedroom duplex penthouse for £7.25m, a ridiculous amount. But, this is not as eye watering when you consider it has already had a discount of 39.6 per cent off its original launch price of £12m.

The FT reports:
“76 per cent of properties have been on the market for more than six months [In St. James’s]” says Tim Macpherson, head of London residential sales at Carter Jonas, and “almost half — 45.7 per cent — have been reduced in price”.

The problem really is very serious in the West of London. The Guardian reports:

The steepest discounts are currently to be found in St James’s and Victoria, where the average prime property price has been reduced by 14.1% (£766,000) and where more than three-quarters of homes have been on the market for more than six months. In Knightsbridge, prices have been reduced by 12.1% on average, followed by Mayfair (11.4%) and Temple and the City (10.5%).

Gluttonous property developers of London

In any other industry a glut of supply would require the manufacturers to take stock of what was going on and likely hold off on producing any more goods until the glut had shifted or a new strategy had been taken. This would be forced to happen in any industry where the environmental and social disruption was so great, thanks to the production process.

But not in London. No authority has stepped in and demanded building firms halt works. Instead, there are a further 420 residential towers (each at least 20 storeys high) in the pipeline, according to New London Architecture and GL Hearn.

The Coutts London Prime Property Index Q4 2017, warns of the risk of ‘over supply’:

Londoners have grown used to the sight of cranes and construction sites dotted across the capital. More than 26,000 new units are currently under construction or have received permission to start building in post codes covered by the Coutts London Prime Property Index as at December 2017.

New developments are cropping up throughout the 15 areas we cover, but it’s Central and West & South West London that are leading the charge. While this reflects the degree of demand in these sought-after areas, there is a risk of a potential over-supply of luxury new builds leading to an increase in listing times for them and higher discounts than on existing homes.

The government love this. They believe that this promotes confidence in the capital. They are happy with this – especially at a time when financial companies are threatening to pull out jobs and offices in the City, in the face of Brexit. For some reason, building more residential apartments means we don’t need to worry about it. But who is going to buy them?

Not the foreigners we have so long relied on, it seems. Property buying agent Henry Pryor told the Guardian:

“We’re going to have loads of empty and part-built posh ghost towers,” he says. “They were built as gambling chips for rich overseas investors, but they are no longer interested in the London casino and have moved on.”

So the London Casino’s chips are down, the house has folded. But the owners keep building more roulette tables and penthouses, desperate to try and entice the gamblers. Where was the tipping point? Most likely London’s very own phallic-symbol of arrogance, the Shard.

There are ten apartments at the top of the capital’s largest skyscraper. All are priced over £50m each. In five years not a single one has sold.

A ‘Shard-shaped disaster’

The key problem with London’s property market is that the developers and government are keen only to serve the tip of the triangle – the wealthiest Brits and international buyers.

But this is no longer where the demand is. Many of those investors from the likes of China and Russia are keen to shift properties they bought a few years ago. Illusions of making quick profit shattered in the wake of the slowing property market and massive currency devaluation of Brexit.

International investors really don’t care where they buy. London is most likely not their home, or where they plan to spend a significant amount of time. They will find the next property bubble or asset class that will serve their millions far better. Where Brexit isn’t a ‘thing’ and stamp duty cannot touch them.

It is the bottom of the Shard that is struggling. The foundations of London’s society. There are no affordable properties being built for those who have to work in London, or at least want to work in London. Estate agent Savills estimates that 58% of demand in London is for homes priced below £450k, but only 25% of homes being built are at this price.

This does not bode well long-term for the UK’s capital. At a time when the Prime Minister and members of the Royal Family are traveling the world in an effort to show the country is open for business, why would a foreign company move to or expand it’s presence? Brexit aside, if employees are unable to find somewhere affordable to live in the capital, businesses will not be tempted to come to an area where they are unable to attract key talent and core workers.

Salesmen begin to suffer

Foxtons is one of the capital’s largest estate agents. Their offices alone have been an excellent marker for the size of the London bubble.

From personal experience I realised we were in full bubble mode when I organised to see a property in South-East London five years ago. I caught the bus there. The estate agent turned up in a brand new Porsche Cayenne.


Source: Guardian

Since then Foxtons capital offices have been transformed into large glass-fronted show spaces, akin to a Scandinavian concept furniture store. They display no properties in the window. Instead there are low coffee tables and armchairs for you to place yourself in as someone greets you and gets you a drink from the moodily lit fridges in the middle of the space.

Eventually someone called Darren in a shiny suit swaggers around and asks you lots of invasive questions about your finances. In no other industry would someone get away with interviewing you like this.

For a long-time Foxtons have survived on the premise that the customer needs them more than they need the customer. Now the tap has run dry and so have their profits.

Last week announced expectations that its earnings before interest, taxes, depreciation and amortisation for the last twelve months to come in at just £15m, a 42% drop from its £26m earnings in 2016. This followed a year of dire financial statements from the company.

It’s not just London estate agents that are suffering. Countrywide, the UK’s largest estate agents have seen their share price fall by nearly a fifth after the group issued its second profit warning in three months.

Much of the group’s disappointing results were thanks to sales in London and the South-East, but data from elsewhere suggests the London-curse is set to spread across the country.

Country-wide properties and buyers are slumping

The Royal Institution of Chartered Surveyors found that 86% of its members surveyed had not seen any increase in inquiries from first-time buyers in December. The same survey found that the number of new buyer inquiries  fell last month by 15%.  Agreed sales also dropped across the country, with a balance of 13% reporting a decline in volumes.

Investment house, Goodbody took this information and concluded that we are now in ‘the first stage of a housing downturn’.

Data published by HMRC found that the number of homes changing hands in December fell to 99,100, the lowest level since November 2016.

It is clear that the UK property market is stumbling, it is only stumbling now partly thanks to the strong gusts that are coming from the bursting bubble that is London’s property market as people seek alternatives.

The bitter cold of London’s prices will soon sweep around the country and bitcoin mania will no longer be the dinner-party conversation of choice.

Property gold? London property bubble should be a warning to all speculators

For too long the capital has encouraged speculators that prices will continue to rise for ever. As with bitcoin, the capital’s properties became these extreme financial assets that delivered capital gains far in excess of people’s ability to earn income from work, or from investment in the real economy.

For so many government ministers, questioned about the unaffordable London property market they had a two part response. The first was that it was a positive sign for the whole country. The second was that high prices were thanks to too little supply.


Gold in GBP – 10 years (GoldCore)

Really it has nothing to do with a shortage of supply, it has had everything to do with encouraging speculation.

Speculation has been fuelled by governments encouraging home ownership by UK residents and speculation by foreign investors. All of this was further fuelled by record-low interest rates, zero-rate mortgages, loans from the bank of Mum and Dad, government subsidies and tax breaks. It has all been kindling on an ever-growing fire.

Time to diversify and own the physical property of real gold.

Related reading 

London Property Crash Looms As Prices Drop To 2 1/2 Year Low

London House Prices Are Falling – Time to Buckle Up

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

Follow Us On FacebookLinkedin and Twitter

News and Commentary

Gold drops on firmer dollar, higher bond yields (Reuters.com)

Asia Stocks Follow U.S. Drop as Bond Slump Extends (Bloomberg.com)

Stocks Fall as Treasury Yields Climb to 2014 Highs (Bloomberg.com)

CFTC Files Eight Anti-Spoofing Enforcement Actions against Three Banks (Deutsche Bank, HSBC & UBS) & Six Individuals (CFTC.gov)

These Are The 6 Traders Who Were Just Arrested For Manipulating The Gold Market (ZeroHedge.com)

U.S. Releases Sweeping List of Russian Oligarchs and Officials (Bloomberg.com)

Latest Updates on Russia Sanctions List (Bloomberg.com)


Source: US Treasury via Bloomberg

Gold Prices At Their Highest Since August 2016 (Gold-Eagle.com)

Gross Domestic Problems (MauldinEconomics.com)

This is why – and how – to combat consistency (StansBerryChurcHouse.com)

Davos Dumbbells (BonnerAndPartners.com)

The Donald’s Davos Delusions (DavidStockMansContraCorner.com)

London’s Bankers Haven’t Been This Gloomy Since 2008 (Bloomberg.com)

Gold Prices (LBMA AM)

30 Jan: USD 1,345.70, GBP 954.37 & EUR 1,083.56 per ounce
29 Jan: USD 1,348.40, GBP 955.07 & EUR 1,085.46 per ounce
26 Jan: USD 1,354.35, GBP 950.21 & EUR 1,087.41 per ounce
25 Jan: USD 1,360.25, GBP 954.35 & EUR 1,095.27 per ounce
24 Jan: USD 1,350.50, GBP 957.50 & EUR 1,093.77 per ounce
23 Jan: USD 1,337.10, GBP 959.10 & EUR 1,091.74 per ounce

Silver Prices (LBMA)

30 Jan: USD 17.30, GBP 12.24 & EUR 13.91 per ounce
29 Jan: USD 17.34, GBP 12.33 & EUR 13.99 per ounce
26 Jan: USD 17.40, GBP 12.21 & EUR 13.99 per ounce
25 Jan: USD 17.52, GBP 12.29 & EUR 14.12 per ounce
24 Jan: USD 17.19, GBP 12.16 & EUR 13.93 per ounce
23 Jan: USD 16.98, GBP 12.19 & EUR 13.87 per ounce


Recent Market Updates

– Silver Bullion: Once and Future Money
– Greatest Stock Bubble In History? GoldNomics Podcast Transcript
– Davos – My Personal Experience of the $100,000 Event, $60 Burgers, Massive Inequality and the Blockchain Revolution
– Is This The Greatest Stock Market Bubble In History? Goldnomics Podcast
– Cyber War Coming In 2018?
– Government Shutdown Ends – Markets Ignore Looming Debt and Bond Market Threat
– Global Pension Ponzi – Carillion Collapse One Of Many To Come
– The Next Great Bull Market in Gold Has Begun – Rickards
– Gold Bullion May Have Room to Run As Chinese New Year Looms
– Digital Gold Flight To Physical Gold Coins and Bars
– Gold and Silver Bullion Are Only “Safe Investments Left” – Stockman
– Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver”
– London Property Crash Looms As Prices Drop To 2 1/2 Year Low

END

 

Our banker friends are doing a great job crushing cryptos again

 

(courtesy zerohedge)

Cryptos Are Getting Crushed Again

Having bounced back from the Coincheck-hack crash, cryptocurrencies are extending yesterday’s ugliness today and accelerating to the downside…

 

Bitcoin is back below the Coincheck crash lows…

 

There are no clear catalysts for this drop.

Deutsche Bank  executives have suggested that “governance” that will legitimize crypto investments could exist in “five to ten years.”

Originally speaking in an interview with Bloomberg on Monday, Jan. 29, Mueller cautioned against current investment in cryptocurrency as only for those “who invest speculatively” while appealing for businesses in the sphere to work together with regulators.

“Once security and the corresponding trust have been created, cryptocurrencies can be assessed and evaluated like established asset classes,” he forecast.

“It’s possible that the required governance will be in existence in five to ten years.”

Deutsche Bank has traditionally taken a bearish view on cryptocurrencies as prices rise, cautioning in December that a major fall in Bitcoin was being “discounted as a small issue” by financial markets.

The lack of volatility in traditional stocks was driving investor interest in more risky assets such as Bitcoin, fellow Deutsche Bank analyst Masao Muraki determined in a note mid-January.

“Now, a growing number of institutional investors are watching cryptocurrencies as the frontier of risk-taking to evaluate the sustainability of asset prices,” he wrote.

Germany continues to fall behind in its treatment of cryptocurrencies at consumer level, providing a stark contrast to initiatives in other countries, such as neighboring Switzerland.

Earlier this month, the country’s central bank director nonetheless precluded comments from UK and US lawmakers at the World Economic Forum 2018 that regulation of cryptocurrency should be a joint international effort.

*  *  *
As a reminder this early-year weakness in crypto is not unusual…

As CoinTelegraph notes, the lead up to Chinese New Year is one of high spending as people book all sorts of travel and holidays, not to mention buy presents. Thus, just like Christmas and December is a time for spending in the West, January has a similar pattern in the east.

With Bitcoin’s value almost halving from $20,000 in the middle of December to $10,000 at its worst in January, Wallin is both unperturbed or surprised.

“The January drop is a recurring theme in cryptocurrencies as people celebrating the Chinese New Year, aka Lunar New Year, exchange their crypto for fiat currency,” explains Alexander Wallin, CEO of trading social network SprinkleBit, as quoted by Bloomberg.

“The timing is about four to six weeks before the lunar year when most people make their travel arrangements and start buying presents,” he added.

The holiday takes place on Feb. 16; however, the build-up is where people start to spend their money. And with the Chinese population heavily vested in Bitcoin, it has a huge role to play on the movement of the market.

The thoughts are that people have been taking their profits into the build-up of the New Year, turning their Bitcoin into fiat currency to use for gift buying.

 

end

How will the deniers of gold market rigging explain the fines and convictions

 

(courtesy TFMetals/Craig Hemke)

 

TF Metals Report: How will the deniers of gold market rigging explain this?

 Section: 

2:26p ET Monday, January 29, 2018

Dear Friend of GATA and Gold:

The TF Metals Report today wonders what excuses will be made by deniers of monetary metals market manipulation now that three investment banks — Deutsche Bank, UBS, and HSBC — have been fined millions of dollars by the U.S. Commodity Futures Trading Commission for manipulating the futures markets in the monetary metals.

The TF Metals Report’s commentary is headlined “CFTC Fines Banks for Precious Metal Price Manipulation” and it’s posted here:

https://www.tfmetalsreport.com/blog/8799/cftc-fines-banks-precious-metal…

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

END

 

In case you missed yesterday’s big story:  3 banks and 8 individuals charged in gold/silver spoofing

 

(courtesy Reuters/GATA)

U.S. authorities charge three banks, eight individuals in futures ‘spoofing’ probe

 Section: 

By Michelle Price
Reuters
Monday, January 30, 2018

WASHINGTON — The U.S. Justice Department and the country’s derivatives regulator said on Monday they had filed civil and criminal charges against three European banks, which paid $46.6 million to settle the cases, and eight individuals for alleged manipulation in U.S. futures and commodities markets.

UBS, Deutsche Bank, and HSBC and former traders at the banks, as well as individuals at other firms, were charged following a large-scale multi-agency probe including the Commodity Futures Trading Commission (CFTC) into so-called “spoofing” in metals and equities futures.

Deutsche Bank and UBS have agreed to pay $30 million and $15 million respectively to settle the civil charges in the case, while HSBC will pay $1.6 million to settle the charges, the CFTC said.

All three banks received reduced penalties from the CFTC for providing significant assistance in the investigations. UBS self-reported the alleged misconduct by its traders to the regulator, the CFTC said. …

… For the remainder of the report:

https://www.reuters.com/article/us-usa-cftc-arrests/u-s-authorities-char

END

 

Bill Murphy explains why our precious metals will rise in price

 

(courtesy Kitco/Bill Murphy/GATA)

 

To catch up with other assets, metals will explode, Murphy says in Kitco interview

 Section: 

7:14p ET Monday, January 29, 2018

Dear Friend of GATA and Gold:

Daniella Cambone of Kitco News interviewed GATA Chairman Bill Murphy this month at the Vancouver Resource Investment Conference, prompting him to say that if gold and silver are to catch up with the prices of other assets and escape the clutches of the gold cartel, they will explode — and he thinks they will this year. Murphy’s interview is three minutes long and can be seen at Kitco News here:

http://www.kitco.com/news/video/show/VRIC-2018/1831/2018-01-26/Gold-And-…

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

END

 




Your early TUESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

 

i) Chinese yuan vs USA dollar/CLOSED UP AT 6.3235 /shanghai bourse CLOSED DOWN AT 34.99 POINTS 0.99% / HANG SANG CLOSED DOWN 359.60 POINTS OR 1.09%
2. Nikkei closed DOWN 337.37 POINTS OR 1.43% /USA: YEN FALLS TO 108.64

3. Europe stocks OPENED  RED   /USA dollar index FALLS TO 89.08/Euro RISES TO 1.2418

3b Japan 10 year bond yield: RISES TO . +.094/ (TROUBLE THIS MORNING) GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.64/ 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:: 64.92  and Brent: 69.06

3f Gold UP/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 DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.687%/Italian 10 yr bond yield UP to 2.031`% /SPAIN 10 YR BOND YIELD DOWN TO 1.415%

3j Greek 10 year bond yield RISES TO : 3.667?????????????????

3k Gold at $1343.40 silver at:17.22: 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 34/100 in roubles/dollar) 55.98

3m oil into the 64 dollar handle for WTI and 69 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.64 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 0.9334 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1592 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 +0.687%

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 2.701% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 2.950% /

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

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

Global Markets A Sea Of Red As Dollar Selloff Resumes

The global selloff that started on Monday as traders were spooked by the double whammy of surging interest rates and fears about iPhone X demand, and resulting in the biggest drop in US stocks since September, accelerated overnight and as seen below world stocks and US equity futures are a sea of red this morning:

In an odd reversal, yesterday’s dollar bounce lost steam amid position rebalancing before Trump’s State of the Union address and the Fed’s two-day meeting.  So far today, it has been a tale of two halves: Light dollar buying throughout the Asia session, reversing once London opened, with EUR and other G10 pairs bouncing off the lows. Bunds have also come down from the highs. USD is now looking heavy, with perhaps more selling to come according to some desks, even as US yields are dipping. Most pairs remain range-bound for the time being, as we head into the magic of month-end tomorrow, for the first time in 2018. Month-end related selling is expected at some point.

The euro advanced alongside the yen, and the pound erased a drop. The yen advanced against all of its Group-of-10 peers as a stock selloff prompts risk aversion. Tokyo-based funds are selling the Aussie against the yen ahead of Trump’s speech Tuesday night, according to a trader who spoke to Bloomberg. “After last week’s large moves, currency markets are wary of this week’s  upcoming events but also of the implications for higher yields,” said Mansoor Mohi-uddin, head of currency strategy at NatWest Markets in Singapore. “The focus in G-10 currencies is whether higher yields cause stocks to weaken, thus supporting safe haven currencies.”

Predictably, volatility across FX continues to rise, with EUR/USD driven back above 1.24, while GBP/USD rallies 100 pips to 1.41 after sliding below 1.40. Actually make that vol across all assets classes.

Treasury yield rose above 2.7% before slipping back, while European government bonds edged higher as traders digested growth data from the region. Rate moves were supported as rebalancing inflows widely flagged over last week, keeping the curve relatively unchanged; bunds initially rally after soft Saxony CPI reading, however other German regions reduce probability of large national German CPI miss. US TSYs tracked the dollar for much of the session, although they have since rebounded from session lows even as the BBDXY continues to decline.

Overnight the US bond selloff spread to Japan, where the benchmark 10-year bond yield briefly rose over 2bps above 0.10%, the highest since July 11, with yields up ~1bp across the curve at last check. Any sustained increase in the 10-year yield to 0.1% would test speculation the BOJ will offer to buy unlimited amount of bonds for fixed rates.

Meanwhile in equities, European stocks opened in the red and drifted lower, mirroring a particularly weak Asian equity session and the drop in U.S. index futures. The Stoxx Europe 600 Index drops 0.5%, declining for the fourth time in five days. Miners are among the biggest decliners as copper and gold prices fall, with banks also sliding. Index losses are tempered by a gain for Swatch after its earnings beat estimates, while Siemens Gamesa also advances after saying it’s on the right path to meet 2018 targets.

Asian markets also traded lower across the board as the selling in US equity futures and retreat from record highs gathered pace overnight. Australia’s ASX 200 (-0.9%) and Japan’s Nikkei 225 (-1.4%) were both negative with Australia led lower by weakness across commodity-related sectors, while Japanese participants digested earnings and a slew of data including a contraction in Household Spending, as well as higher Unemployment. Selling accelerated in late trade amid a slump in US equity futures, in which DJIA futures fell over 200 points after a breakdown of near-term support at 26,400. Hang Seng (-1.1%) and Shanghai Comp. (-1.0%) conformed to the losses after continued PBoC inaction which resulted to a daily net drain of CNY 240bln and amid reports that banks were ordered to curb overnight lending, while tech names and Apple suppliers in the region were also mostly downbeat after the tech giant was said to reduce Q1 iPhone X orders by 50% due to slower than expected sales

At the same time, a wariness is emerging in equity markets as surging rates on government bonds test appetite for stocks at elevated valuations. Investors are weighing whether stronger corporate earnings, a pick-up in economic growth and optimism over U.S. tax cuts can continue driving up prices in markets that recently touched their highest on record; as noted yesterday, Goldman Sachs predicted a correction is imminent, but said any such pullback would be a buying opportunity.

“An acceleration in the selloff of global bond markets appears to be starting to let some of the air out of the recent rally in global equity markets,” said Michael Hewson, chief market analyst at CMC Markets UK. “U.S. markets suffered their worst one day fall this year, though sharp falls in tech stocks also contributed.” Apple Inc. shares dropped as much as 2.6 percent amid renewed concerns about falling demand for the iPhone X.

Looking at today’s key event, expect Trump’s State of the Union address to borrow from Trump’s Davos appearance with respect to detailing the America First approach, Credit Agricole strategists including Valentin Marinov write in a note. Markets will be particularly sensitive to any hints of further trade barriers to protect domestic U.S. producers, probably with negative implications for the USD.

A quick look at the ongoing Brexit chaos, cable initially sold off on news that PM May will reject the EU’s proposed deal on the Brexit transition period and go into battle next week over freedom of movement and so-called “rule taking”, the Telegraph reported. Then, the Times said that May is facing a donors’ revolt and growing pressure to leave Downing Street as soon as the outline of a trade deal is negotiated with the European Union this autumn. Finally, BuzzFeed leaked the UK government’s unreleased Brexit analysis which reportedly showed that UK will be worse off in every scenario outside the EU.

Elsewhere, many metals pared Monday’s gain, though gold reversed a decline to trade higher. Bitcoin fluctuated around $11,000 and emerging-market stocks slumped. Both WTI and Brent crude futures traded lower amid the (early) resurgence in the USD with prices hovering around the USD 65bbl and USD 69bbl levels respectively with energy newsflow otherwise relatively light. In metals markets, gold trades lower amid the global risk environment and the yellow metal’s safe-haven status.

Bulletin Headline Summary from RanSquawk

  • European bourses are trading mostly lower (Eurostoxx 50 -0.3%), in-fitting with the global risk sentiment
  • Choppy trade for the USD as gains prove to be short-lived with EUR/USD and GBP/USD back above 1.2400 and
  • 1.4000 respectively
  • Looking ahead, highlights include German national CPIs and a slew of central bank speakers

Market Snapshot

  • S&P 500 futures down 0.3% to 2,844.50
  • STOXX Europe 600 down 0.3% to 398.53
  • MSCI Asia Pacific down 1.1% to 184.84
  • MSCI Asia Pacific ex Japan down 1.3% to 605.78
  • Nikkei down 1.4% to 23,291.97
  • Topix down 1.2% to 1,858.13
  • Hang Seng Index down 1.1% to 32,607.29
  • Shanghai Composite down 1% to 3,488.01
  • Sensex down 0.7% to 36,027.57
  • Australia S&P/ASX 200 down 0.9% to 6,022.80
  • Kospi down 1.2% to 2,567.74
  • German 10Y yield fell 1.9 bps to 0.675%
  • Euro down 0.02% to $1.2381
  • Italian 10Y yield rose 2.0 bps to 1.758%
  • Spanish 10Y yield fell 1.8 bps to 1.401%
  • Brent futures down 0.4% to $69.21/bbl
  • Gold spot up 0.3% to $1,343.98
  • U.S. Dollar Index down 0.1% to 89.20

Top Headline News

  • The U.S. identified 96 of Russia’s richest people as “oligarchs” and 104 top government figures in lists mandated under last year’s sanctions law, adding pressure over alleged Kremlin interference in the 2016 presidential vote
  • Struggling to find an approach to Brexit that can win the support of her divided cabinet, U.K. PM Theresa May is asking European officials and leaders to come up with ideas on what kind of future relationship might be on offer, according to three people familiar with the situation
  • The euro-area economy expanded 0.6% q/q in 4Q, matching the median economist forecast while economic confidence for the region fell to 114.7 from 115.3 in December
  • Mnuchin says U.S. debt limit suspension can be extended into February
  • Dubai’s Biggest Lender in Talks With Sberbank on Turkey Unit
  • Wynn Scrutiny Intensifies as Macau Regulators Voice Concerns
  • HNA Crisis Deepens as Group Is Said to Face Liquidity Crunch
  • Varian to Buy Sirtex for $1.3 Billion to Add Cancer Drugs
  • Trump Agenda Faces Tough Fiscal Reality After State of the Union
  • Blackstone in Talks Buy TRI Unit Stake For $17b: Reuters
  • Japan December retail sales 0.9% vs -0.4% est; y/y 3.6% vs 2.2% est
  • New Zealand December trade balance NZ$640m vs -NZ$125m estimate

Asian markets traded lower across the board as the selling in US equity futures and retreat from record highs gathered pace overnight. ASX 200 (-0.9%) and Nikkei 225 (-1.4%) were both negative with Australia led lower by weakness across commodity-related sectors, while Japanese participants digested earnings and a slew of data including a contraction in Household Spending, as well as higher Unemployment. Furthermore, selling then accelerated in late trade amid a slump in US equity futures, in which DJIA futures fell over 200 points after a breakdown of near-term support at 26,400. Hang Seng (-1.1%) and Shanghai Comp. (-1.0%) conformed to the losses after continued PBoC inaction which resulted to a daily net drain of CNY 240bln and amid reports that banks were ordered to curb overnight lending, while tech names and Apple suppliers in the region were also mostly downbeat after the tech giant was said to reduce Q1 iPhone X orders by 50% due to slower than expected sales. Finally, 10yr JGBs were lower as Japanese yields played catch up to their US counterparts in which the US 10yr yield rose above 2.7% to its highest since April 2014, while firmer demand for the 2yr JGB auction.

Top Asian News

  • China Stocks in Hong Kong Sink to Pare World’s Steepest Rally
  • PetroChina Says Profit May Triple Amid Cost Cuts, Higher Oil
  • Top Noble Group Shareholder Urges SGX Probe of Trader’s Actions
  • Apps to Screen Tenants Latest Chinese Startups Battleground
  • Asian Suppliers Fall on Report Apple Cut IPhone X Targets

European bourses are trading broadly lower (Eurostoxx 50 -0.3%), in-fitting with the global risk sentiment spurred from equity performance seen in US and Asia-Pac hours. The only index immune to losses this morning is the SMI (+0.3%) with the Swiss bourse supported by the luxury sector after a positive update from Swatch (+2.7%) and the latest Swiss watch exports which have also lifted Richemont (+1.8%) higher in sympathy. Elsewhere, IT names trade higher after chip makers such as Infineon (+0.8%) and STMicroelectronics (+0.5%) are granted some reprieve in the wake of yesterday’s news that Apple could curtail some of their production of the iPhone X. Additionally, material names lag their peers amid the price action seen in the metals complex. Finally, Telecom Italia (+2.8%) top the FSTE MIB after news that the Co. are to unveil their network spin-off proposal on February 7th.

Top European News

  • U.K. Mortgage Approvals at 3-Year Low as Housing Market Slows
  • Russian Traders Unfazed by U.S. Oligarch List as Bonds Rally
  • Top Norway Fund Manager Is Betting on Rigs for 200% Return

In currencies, the USD initially managed to maintain its recovery momentum after recovering above 89.500 on widespread gains vs its G10 rivals (Ex-JPY and CHF), before sentiment reversed and the USD was dragged into negative territory.

  • EUR/USD briefly retested overnight lows around 1.2337 on a weak inflation read from German state Saxony, but very mixed data from others ahead of heavyweight NRW, broad USD softness and progress in German coalition negotiations prompted a marked rebound towards 1.2400.
  • GBP/USD initially lost the 1.4000 handle with stops triggered on a break to 1.3980, but has recovered to trade around 1.4080 in choppy price action.
  • AUD/USD mid-range between 0.8040-0.8100 and undermined by ongoing weakness in metals/commodities, while
  • NZD/USD has retreated further towards 0.7300 despite decent NZ trade data as CFTC shorts continue to pare positions.
  • USD/CAD nudging higher again between 1.2330-1.2380 as some positive NAFTA discussions are offset by another downturn in oil prices.

Ahead, US President Trump’s State of the Union address kicks off a busy line up of risk events, with the FOMC concluding its 2-day meeting on the last trading day of January and NFP looming on Friday.

In commodities, both WTI and Brent crude futures traded lower amid the (early) resurgence in the USD with prices hovering around the USD 65bbl and USD 69bbl levels respectively with energy newsflow otherwise relatively light. In metals markets, gold trades lower amid the global risk environment and the yellow metal’s safe-haven status. Elsewhere, copper was pressured during Asia-Pac and fell below USD 3.20/lb amid broad declines across the complex and with sentiment spooked as the equity sell-off gathered pace. Additionally, zinc prices have shown losses in London after printing 11 year highs yesterday.

Looking at the day ahead, the highlight is President Trump’s first State of the Union address in front of Congress. Also due to speak is the BoE’s Carney before the UK Parliament’s Economic Affairs Committee. Datawise, in Europe the highlights include a first look at Q4 GDP for the Euro area and France, the flash January CPI report in Germany, UK credit and money aggregates data for December and January confidence indicators for the Euro area. In the US the highlight is the January consumer confidence print, while the November S&P/ Case-Shiller house price index is also due to be released. Away from this, the ECB’s Mersch speaks in Frankfurt and Catalonia’s parliament votes on its regional
president. Pfizer and McDonald’s will release earnings.

US Event Calendar

  • 9am: S&P CoreLogic CS 20-City NSA Index, prior 203.8; MoM SA, est. 0.6%, prior 0.7%; YoY NSA, est. 6.3%, prior 6.38%
  • 10am: Conf. Board Consumer Confidence, est. 123, prior 122.1;Present Situation, prior 156.6;Expectations, prior 99.1

 

DB’s Jim Reid concludes the overnight wrap

Bonds continue to be caught in the cross hairs at the moment although a story at the end of the European session on the ECB likely tapering between September and December rather than abruptly ending the program stemmed a little bit of the sell-off yesterday. The global rise in yields did start to cause some damage though with the S&P 500 (-0.67%) seeing its worst day since September and the VIX climbing 24.9% to 13.84 – the highest close since August. More on equities below but the bond sell-off started after we went to print yesterday morning and finished with 10yr USTs +3.5bp and 10yr Bunds +6.5bps. 5yr equivalents sold off 2bps and 3.3bps respectively. The four bonds mentioned above are up +8bps, +12.4bps, +7.9bps and +12.8bps respectively since the intraday lows after the ECB meeting on Thursday afternoon. So a pretty substantial sell-off in these low yield times.

In terms of landmarks, US 10yr hit the highest level since April 2014 (close 2.695% – day’s highs 2.725%) and 10yr Bunds the highest since September 2015 (close 0.691% – day’s highs 0.6995%). 5 year Bunds spent most of the day trading above 0% but closed at -0.006%. We haven’t closed above zero since November 2015.

There was nothing particularly igniting the sell-off. However there’s no doubt that global yields remain too low given strong growth, the likely pick up in US inflation, much less QE going forward, significantly higher upcoming US treasury supply, higher oil and a weaker dollar. Yesterday gives us confidence that the reasoning behind our credit view for 2018 has some basis. To recap we think Q1 will be good for credit but that higher yields and inflation through the year will eventually lead to volatility picking up and spreads reversing. It’s too early for too much damage to be done in credit (especially with CSPP technicals still strong – see below) but recent moves have given us a hint of a slightly higher vol regime if rates continue to climb as we expect.

Despite the notable rise in 10y treasury yields, our US economists believe there is considerable scope for bond yields to rise before they weigh on growth and equities. They note the economy neutral 10-year yield (10yr-star) in nominal terms is currently c3.5% – suggesting that bond yields could rise about 80bp from current levels before we would begin to worry about them materially slowing growth momentum. For more details, refer to their note.

Staying with rates, the Bloomberg story that the ECB will likely taper QE between September and YE 2018 was attributed to officials familiar with the discussions. The main implication is that it probably rules out a rate increase before June 2019 as the perception is that there will be a six month gap between the end of QE and the first rate hike. Staying with the ECB, the latest CSPP/PSPP ratio has exceeded last week’s record and is again way above the long-run average. The net CSPP purchases were €2.3bn last week with net PSPP purchases at €5.8bn. The CSPP/ PSPP ratio was a huge 39.5% (27.2% over last 4 weeks vs. 11.5% before QE was trimmed in April 2017). There may have been another lumpy PSPP redemption just like in the previous week, which could have pushed the ratio up meaningfully.  However, with every weekly print, a signal is emerging from the noise that gives us confidence that the role of corporate bonds in QE has indeed risen as we forecast – at least around the 20% mark that we expect on average in H1.

This morning in Asia, equities have followed the negative lead from the US and are down c1%. The Nikkei (-1.46%), Kospi (-1.08%), Hang Seng (-1.05%) and China’s CSI 300 (-0.53%) are all down, while UST 10y yields are up c2bp as we type. Elsewhere, Exxon Mobil is reportedly planning a $50bn capex over the next five years in the US, according to a tweet from Texas Senator Kevin Brady – whose district is home to Exxon’s corporate campus.

Now recapping other markets performance from yesterday. US equities retreated c0.6% from their record highs (S&P & Dow -0.67%; Nasdaq -0.52%). All sectors within the S&P were in the red with losses led by utilities, energy and telco stocks. Apple fell 2.1% after the Nikkei reported that Apple told suppliers it will halve 1Q production targets for the iPhone X. European markets were broadly lower, with the Stoxx 600 (-0.19%) and Dax (-0.12%) modestly lower while the FTSE rose marginally (+0.08%), partly benefiting from a lower Sterling.

Turning to currencies, the US dollar index gained 0.27%, while the Euro and Sterling fell 0.39% and 0.62% respectively, although the latter is still up c4.2% since early January. In commodities, WTI oil retreated -0.88% from its c3 year high. Elsewhere, precious metals weakened c1% (Gold -0.61%; Silver -1.30%) and other base metals were mixed but Zinc edged 0.5% higher to a fresh 10 year high (Copper -0.13%; Zinc +0.50%; Aluminium -0.71%).

Away from the markets and ahead of tomorrow’s official forecasts, unnamed sources told Reuters that the German government has lifted its 2018 GDP growth forecast to 2.4% from 1.9%, while the unemployment rate is expected to fall 0.4ppt yoy to 5.3% in 2018. Elsewhere, ITV reported that Ms Merkel said her behind the scenes Brexit talks with UK’s PM May were going round in circles, with an endless cycle of “what do you want?” (from Ms Merkel) and “make me an offer” (from PM May).

Following on with some more Brexit headlines. On the EU side, Chief negotiator Barnier noted “we very much need the UK to clarify its position” and “we have to make sure we do have time (to complete the Brexit deal)….we’re working towards the end of October”. Conversely, the UK’s Brexit Secretary Davis pushed back on the deadline, noting “…it can be done in the time – (but) the end of this year” and subject to clarity on a future trade deal. Elsewhere, he added “… we think it would be cherry picking the other way around (by the EU) to leave financial services out” and given it’s so big, we’ll have to treat it separately, with a key argument around financial services being regulatory equivalence. Finally, Bloomberg noted the opposition leader Mr Corbyn has told a private group of business executives that his party’s policy on Brexit is wide open, but a second referendum is out of the question.

Over in Canada, the sixth round of NAFTA talks seemed to have ended with a slightly positive tone. The US trade representative Lighthizer noted “…we finally began to discuss core issues…but we’re progressing very slowly”, my hope is that we “start seeing some breakthroughs between now and the next round” of talks scheduled in late February. Elsewhere, the Canadian and Mexican counterparts noted “some progress” and “on the right track to reach a deal” respectively post the talks.

Finally as a reminder, President Trump’s State of Union speech is out just before we go to print in the morning (late evening US time tonight). DB’s Ruskin noted that it’s not normally a market mover but that if there is a potential market sensitive topic its US trade relations with China.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the December PCE core was in line at 0.2% mom and 1.5% yoy. Notably the three and six month annualised rate was firmer at 1.9% yoy and 1.7% yoy respectively. The January Dallas Fed manufacturing activity index was above market at 33.4 (vs. 25.4) and the highest in 12 years. Elsewhere, the December personal income was above expectations at 0.4% mom (vs. 0.3%) while personal spending was in line at 0.4% mom, but the prior month’s reading was upwardly revised by 0.2ppt. In Europe, Germany’s December import price index was in line at 1.1% yoy, while Italy’s December PPI was lower than the prior month’s print at 2.2% yoy (vs. 2.8%).

Looking at the day ahead, the highlight is President Trump’s first State of the Union address in front of Congress. Also due to speak is the BoE’s Carney before the UK Parliament’s Economic Affairs Committee. Datawise, in Europe the highlights include a first look at Q4 GDP for the Euro area and France, the flash January CPI report in Germany, UK credit and money aggregates data for December and January confidence indicators for the Euro area. In the US the highlight is the January consumer confidence print, while the November S&P/ Case-Shiller house price index is also due to be released. Away from this, the ECB’s Mersch speaks in Frankfurt and Catalonia’s parliament votes on its regional
president. Pfizer and McDonald’s will release earnings.

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 34.99 points or 0.99% /Hang Sang CLOSED DOWN 359.60 pts or 1.09% / The Nikkei closed DOWN 337.37 POINTS OR 1.43%/Australia’s all ordinaires CLOSED DOWN 0.895%/Chinese yuan (ONSHORE) closed UP at 6.3235/Oil DOWN to 64.92 dollars per barrel for WTI and 69.06 for Brent. Stocks in Europe OPENED IN THE RED .   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.3235. OFFSHORE YUAN CLOSED DOWN AGAINST  THE ONSHORE YUAN AT 6.3279//ONSHORE YUAN MUCH STRONGER AGAINST THE DOLLAR/OFF SHORE MUCH STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  MUCH WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT HAPPY TODAY.(STRONGER CURRENCY BUT WEAK MARKETS )

3 a NORTH KOREA/USA

/SOUTH KOREA

 

3 b JAPAN AFFAIRS

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

 European bond tank  (yields rise), stocks tank today.
(courtesy zerohedge)

European Credit Markets Plunge To 6-Month Lows; Stocks Tank

“Whatever it takes” may not be enough to save this..

 

Despite the ongoing money-printing and delusion of ECB bond purchases, European credit markets are crashing.

Investment-Grade European corporate bond yields spiked to 6-month highs today – diverging notably from the flow of central bank buying…

 

And as credit weakens so stocks tumbled most in over 6 weeks…

 

 

Which sent Europe’s VIX surging…

 

 

But US VIX is back above EU VIX – by the most since August 2015’s China-Deval flash crash…

 

END

Israeli Leaders Outraged Over Polish Nazi War Crimes Bill

A new Polish law that would make it illegal in Poland to suggest that the Polish government and people bore responsibility for the crimes committed on their land during the Holocaust has outraged Israeli leaders, according to the Financial Times.

Poland’s lower house voted to approve the law on Friday through a series of changes that would make it a crime punishable with up to three years in jail to accuse the Polish nation or state “publicly and against the facts” of being “responsible or complicit in” Nazi war crimes.

As many Americans will remember, President Obama inadvertently sparked a minor diplomatic crisis back in 2012 when he referred to a “Polish death camp” instead of a “Nazi death camp” while conferring the Presidential Medal of Freedom on Jan Karski, a hero of the Polish resistance.

Obama’s phrasing elicit a vehement denunciation from former Polish PM Donald Tusk. Initial White House apologies were rebuffed while Polish politicians demanded that Obama “correct the record”.

 

Poland

 

Concentration camps like Auschwitz were built on Polish land by the Nazis following the German invasion and occupation of Poland in 1939.

Though the law must still be approved by Poland’s upper house of Parliament and its president, it has already provoked an outraged response from Israeli Prime Minister Benjamin Netanyahu, who described the law as “baseless” and suggested it was tantamount to an official denial of the Holocaust.

“One cannot change history and the Holocaust cannot be denied. I have instructed the Israeli Ambassador to Poland to meet with the Polish prime minister this evening and express to him my strong position against the law,” Netanyahu said.

In a sign of the sensitivities surrounding the issue, Yair Lapid, the son of a Holocaust survivor and head of Israel’s centrist Yesh Atid party became embroiled in a heated row on Twitter with the Polish Embassy in Israel after he tweeted that the law “tries to deny Polish complicity in the Holocaust.”

 

אני מגנה בכל תוקף את החוק החדש שעבר בפולין המנסה להכחיש את מעורבות אזרחים פולנים רבים בשואה.
אף חוק פולני לא ישנה את ההיסטוריה, פולין הייתה שותפה לשואה. מאות אלפי יהודים נרצחו על אדמתה מבלי לפגוש קצין גרמני אחד.

 

Your unsupportable claims show how badly Holocaust education is needed, even here in Israel

 

The embassy responded by saying his claims were “unsupportable” and showed “how badly Holocaust education is needed, even here in Israel.”

Patryk Jaki, Poland’s deputy justice minister, who proposed the legislation, said that the bill was not “against Israel”, but aimed to “properly point out the perpetrators”. The reaction in Israel was “proof of how necessary this project is”, he added.

 

Poland

 

Mateusz Morawiecki, Poland’s prime minister, said that Poland and Israel had agreed in 2016 to oppose any attempts to distort Jewish or Polish history, either by downplaying the suffering of Jews during the Holocaust or by using “erroneous terms such as ‘Polish death camps’”.

 

Polska i Izrael w 2016 wydały wspólne oświadczenie, w którym sprzeciwiają się wszelkim próbom wypaczania historii narodów żydowskiego lub polskiego przez negowanie lub umniejszanie ofiary Żydów podczas Holokaustu lub stosowanie błędnych terminów takich jak “polskie obozy śmierci”

 

“Auschwitz-Birkenau is not a Polish name, and Arbeit Macht Frei is not a Polish phrase,” he tweeted, referring to the slogan ‘work sets you free’ on the concentration camp’s entrance.

The Yad Vashem Holocaust memorial in Jerusalem said the law was “liable to blur the historical truths regarding the assistance the Germans received from the Polish population during the Holocaust.”

“Restrictions on statements by scholars and others regarding the Polish people’s direct or indirect complicity with the crimes committed on their land during the Holocaust are a serious distortion,” the center said in a statement.

Poland’s foreign ministry insisted the law would not impede “freedom of research” and “discussions on history or artistic activity.”

END

7. OIL ISSUES

 

Oil and gasoline drop after a surprise crude oil build

 

(courtesy zerohedge)

8. EMERGING MARKET

 

 end

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

Euro/USA 1.2418 UP .0037/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES ALL RED 

USA/JAPAN YEN 108.64 DOWN  0.298 (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/

GBP/USA 1.4120 UP .0048 (Brexit March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2328 DOWN .0007 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 37 basis points, trading now ABOVE the important 1.08 level RISING to 1.2334; / Last night the Shanghai composite CLOSED DOWN 34.99 POINTS OR 0.99% / Hang Sang CLOSED DOWN 359.60 POINTS OR 1.09% /AUSTRALIA CLOSED DOWN 0.85% / EUROPEAN BOURSES ALL RED  

The NIKKEI: this TUESDAY morning CLOSED DOWN 337.37 POINTS OR 1.43%

Trading from Europe and Asia:
1. Europe stocks OPENED  RED

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 359.60 POINTS OR 1.09% / SHANGHAI CLOSED DOWN 34.99 POINTS OR 0.99% /

Australia BOURSE CLOSED DOWN 0.85% /

Nikkei (Japan)CLOSED DOWN 337.37 POINTS OR 1.43%

INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1343.70

silver:$17.21

Early TUESDAY morning USA 10 year bond yield: 2.701% !!! UP 1 IN POINTS from MONDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ALSO GETTING DANGEROUSLY CLOSE TO 2.70%

The 30 yr bond yield 2.950 UP 1 IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)

USA dollar index early TUESDAY morning: 89.09 DOWN 21  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.957% UP 1  in basis point(s) yield from MONDAY/

JAPANESE BOND YIELD: +.097% UP   9/10   in basis points yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.409% DOWN 1  IN basis point yield from MONDAY/

ITALIAN 10 YR BOND YIELD: 2.030 UP 2  POINTS in basis point yield from MONDAY/

the Italian 10 yr bond yield is trading 61 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.683%  DOWN 1 IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.2402 UP.0022 (Euro UP 22 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 108.85 DOWN 091 Yen UP 9 basis points/

Great Britain/USA 1.4137 UP .0065( POUND UP 65 BASIS POINTS)

USA/Canada 1.2331 DOWN  .0004 Canadian dollar UP 4 Basis points AS OIL FELL TO $64.49

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This afternoon, the Euro was UP 22 to trade at 1.2402

The Yen ROSE to 108.85 for a GAIN of 9 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

The POUND ROSE BY 65 basis points, trading at 1.4137/

The Canadian dollar ROSE by 4 basis points to 1.2331/ WITH WTI OIL FALLING TO : $64.49

The USA/Yuan closed AT 6.3239
the 10 yr Japanese bond yield closed at +.097% UP  9/10  BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from MONDAY at 2.712% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.9754  UP 2  in basis points on the day /

Your closing USA dollar index, 89.20 DOWN 11 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED DOWN 83.55 POINTS OR 1.09%
German Dax :CLOSED DOWN 126.77 POINTS OR 0.95%
Paris Cac CLOSED DOWN 47.81 POINTS OR 0.87%
Spain IBEX CLOSED DOWN 127.40 POINTS OR 1.21%

Italian MIB: CLOSED DOWN 320.63 POINTS OR 1.35%

The Dow closed DOWN 362.59 POINTS OR 1.37%

NASDAQ WAS DOWN 64.02 Points OR 0.86% 4.00 PM EST

WTI Oil price; 64.49 1:00 pm;

Brent Oil: 68.84 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 56.37 UP 5/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 5 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.683% FOR THE 10 YR BOND 1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$64.33

BRENT: $68.80

USA 10 YR BOND YIELD: 2.7199%   THE RAPID ASSENT IN YIELD IS VERY DANGEROUS/ANYTHING OVER 2.70% AND  DERIVATIVES BLOW UP

USA 30 YR BOND YIELD: 2.972%

EURO/USA DOLLAR CROSS: 1.2398 UP.0017  OR 17 BASIS POINTS

USA/JAPANESE YEN:108.79 DOWN 0.144/ YEN UP 14 BASIS POINTS

USA DOLLAR INDEX: 89.22 DOWN 9 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.4144 : UP 72 POINTS FROM FRIDAY NIGHT

Canadian dollar: 1.2329 DOWN 5 BASIS pts

German 10 yr bond yield at 5 pm: +0.683%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Markets In Turmoil: Bonds Bloodbath, Stocks Slammed, VIX Vertical

For the first time since Dec 20th, The Dow dared to lose investors’ money for two days straight.

This is the biggest two-day drop since September 2016.

The culprits…?

And what they said afterwards…

Bear in mind that stocks are still on the path to their best monthly gain in 2 years (and the 15th monthly gain in a row).

The Dow kicked off Tues regular trading session with a gap down that amounted to 241 pts, or 0.91 pct loss on the open. As a percentage of prior day’s close, that’s the worst opening gap since Sept 11, 2002, when the blue-chip average started with a 0.96 pct loss (Thomson Reuters data).

That said, today’s sharp Dow opening slide skewed by one stock, UnitedHealth; UNH responsible for ~100 pts of DJI opening drop, roughly 40% of the decline. The S&P 500 gap-opened today 0.73% lower – the worst initial print since May 17 of last year.

Friday’s meltup seems like a long time ago now…

China was ugly overnight again…

 

Healthcare-related stocks tumbled…

 

VIX spiked back above 15…

 

For the first time since August…

 

It wasn’t just Equity risk that is spiking…

 

 

And Credit markets started to stir with HY CDX back above 300bps…

 

Bonds bloodbath’d even more with 10Y at new cycle highs and 30Y ramping up near 3.00%…

 

30Y up 26bps year-to-date…

Testing key technical levels…

 

Today was the worst day for bond and equity holders since the Election…

 

Which along with a spike in vol has crushed Risk Parity fund performance in the last couple of days…

Risk Parity funds are near their deleveraging limits…

 

 

Lots of talk about End of Month rebalancing but it appears more like bonds spooked stocks…

 

The Dollar Index ended the day modestly lower once again despite Mnuchin’s best efforts…

As Bloomberg notes, the dollar pared losses after Treasury Secretary Steven Mnuchin reiterated his support for a strong greenback in the long term, while investors awaited U.S. President Donald Trump’s first State of the Union address. The Bloomberg dollar index was down ~0.1% after swinging from gains of 0.3% in Asian trading to losses of 0.4% early in the New York morning; the dollar briefly erased its decline after Mnuchin told a Senate committee that he “absolutely” supports a strong dollar and in no way “intended to talk down” the greenback last week in Davos.

 

Cryptocurrencies took another dive today (on Bitfinex subpoenas) with Bitcoin down 10% and testing back below $10,000…

 

Commodities were mixed with crude down hard but copper, gold, and silver down very modestly…

 

WTI/RBOB tumbled today ahead of tonight’s API data…

 

 

And finally, don’t forget, Americans have never been more sure that stocks are going higher…

end

TRADING TODAY:  BOND BLOOD BATH:

30Y TSY Yield Nears 3.00% – Triggers Gundlach’s “Bonds Will Damage Stocks” Threshold

While all eyes are on the 10Y, it’s the 30Y bond that is bloodbath-ing today with its yield snapping above October’s highs, breaking towards 3% for the first time since May 2017…

Notably, 30Y at 3% was DoubleLine’s Jeff Gundlach’s Second Trigger for bonds to damage stocks (after his first trigger -10Y crossing 2.63% – hit earlier in the month):

Reminding his audience of the rivalry between himself and Bill Gross, Gundlach disagreed with the former bond king, who made headlines today with his statement that the bond bull market is over, and said that “Gross is too early with his TSY bear market call.”

What is the catalyst for Gundlach? As he explained, one “needs to see the 30Y at 2.99% or above for the trendline to break.”

And it just did…

END

it seems that Met Life owes a lot of pensioners money that it had failed to pay and this may add up to tens of thousands of workers for the past years.  The stock tumbled 10% in after hours.  The big question is this a “lone wolf” with respect to MetLife or does this extend to other insurers who engaged in this type of deal

(courtesy zerohedge)

MetLife Tumbles After Discovering “Material Weakness” In Financial Reporting

In an ugly echo of the GE debacle from two weeks ago, MetLife stock tumbled 10% after hours on Monday after the company announced that it would revise prior financial reports because of overdue monthly pension benefits that it had failed to pay to possibly tens of thousands of workers in past years.

Specifically, MetLife had uncovered a “material weakness” in internal control over financial reporting of its annuity business and expects to increase reserves in total between $525m and $575m pre-tax. It also disclosed that the Securities and Exchange Commission ​enforcement staff ​“has made an inquiry” about the matter. MetLife said it also is responding to questions from its lead state regulator, the New York Department of Financial Services, and other state regulators.

Shares tumbled as much as 10% on the news.

From the press release:

Management of the company has determined the prior release of group annuity reserves resulted from a material weakness in internal control over financial reporting. MetLife expects to increase reserves in total between $525 million and $575 million pre-tax, to adjust for reserves previously released, as well as accrued interest and other related liabilities. The amount of the reserve increase is based in substantial part on actuarial, legal, statistical, and other assumptions. If actual facts and factors differ from those the company has assumed, the reserve the company has established could be adversely or positively affected.

As a result of the gross oversight, full-year net income for 2017 would be slashed by $165 million to $195 million, with the insurer adding that it intends to “make prior period revisions to reflect the balance of these adjustments in the appropriate historical periods.” The company also expects to correct historical periods for unrelated errors in those periods, as required by accounting standards. Those errors were previously recorded in the periods in which the company identified them.

MetLife also unveiled that it is responding to inquiries from the U.S. Securities and Exchange Commission, as well as state regulators from New York and other locations.

What does this mean? As auditor Francine McKenna noted, the part about “currently reviewing its processes and procedures for identifying unresponsive and missing international group annuity annuitants and pension beneficiaries” simply means that Metlife had no idea how many people they owed.

“Like property escheatment. Unclaimed potentially dead people.”

Explaining this further, MetLife is one of numerous large and highly rated life insurers that agree to take responsibility for some or all of the payments due participants in private-sector plans from employers such as Sears Holdings and PPG Industries. These deals are called “pension risk transfer.” Many employers with old-fashioned pension plans, under which they pay monthly benefits to retired workers, are eager to reduce their exposure to investment and interest risk in running pensions by striking risk-transfer agreements with insurers.

Those deals provide assets for investment, while helping the employer cut the risk of volatility in results. But they also require insurers and the employers to clean up and transfer data for many workers, including some that have left the company long ago.

And here lies the rub:

The New York insurer disclosed the unpaid pensions in mid-December and has been working with a firm that specializes in finding addresses to get in touch with the retirees who are owed money. It had set a goal to determine by Feb. 1 how much money it owed people. A law firm hired by MetLife has been investigating how its retirement business erred in allowed the pensions to go unpaid, according to the WSJ.

The New York insurer disclosed the unpaid pensions in mid-December and has been working with a firm that specializes in finding addresses to get in touch with the retirees who are owed money. It had set a goal to determine by Feb. 1 how much money it owed people. A law firm hired by MetLife has been investigating how its retirement business erred in allowed the pensions to go unpaid.

As Bloomberg adds, the charges add to a expenses MetLife incurred last year, many of them spurred by the separation of a U.S. retail business called Brighthouse Financial Inc.

Chief Executive Officer Steve Kandarian spun off that unit in August to help it remove some volatility in results and focus on other businesses including ones selling insurance through employers and international markets.

As a result of the uncovered weakness, MetLife pushed back its earnings release for the fourth quarter, which was originally scheduled for this week, to Feb. 13 and said it will hold a call the next day. MetLife still expects to file its 10-K by March 1

Following the MetLife news, the big question on many investors minds is whether GE and MET are ‘lone wolves’ or this type of unreported “material weakness” is a pervasive issue across the entire industry?

 

end

 

A housing bust may be just around the corner:  rates have now hit their highest level since 2014

(courtesy Mish Shedlock/Mishtalk)

“This Isn’t A Drill” Mortgage Rates Hit Highest Level Since May 2014

Submitted by Mish Shedlock of MishTalk

A housing bust may be just around the corner. Rates have climbed to a level last seen in May of 2014.

Mortgage News Daily reports Mortgage Rates Surge to Highest Levels in More Than 3 Years.

The chart does not quite show what MND headline says but the difference is a just a few basis points. I suspect rates inched lower just after the article came out.

For the past few weeks, rates made several successive runs up to the highest levels in more than 9 months. It was really only the spring of 2017 that stood in the way of rates being the highest since early 2014. After Friday marked another “highest in 9 months” day, it would only have taken a moderate movement to break into the “3+ year” territory. The move ended up being even bigger.

From a week and a half ago, most borrowers are now looking at another eighth of a percentage point higher in rate. In total, rates are up the better part of half a point since December 15th. This marks the only time rates have risen this much without having been at long term lows in the past year. For example, late 2010, mid-2013, mid-2015, and late 2016 all saw sharper increases in rates overall, but each of those moves happened only 1-3 months after a long term rate low.

Not a Drill

So far this month, MBS have stunningly dropped over 200 bps, which easily translates into a .5% or more increase in rates. I’ve been shouting “lock early” for quite a while, and this is precisely why, This isn’t a drill, or a momentary rate upturn. It’s likely the end of a decade+ long bull bond market. LOCK EARLY. -Ted Rood, Senior Originator

Housing Bust Coming

Drill or not, if rising rates stick, they are bound to have a negative impact on home buying.

In the short term, however, rate increases may fuel the opposite reaction people expect.

Why?

Those on the fence may decide it’s now or never and rush out to purchase something, anything. If that mentality sets in, there could be one final homebuilding push before the dam breaks. That’s not my call. Rather, that could easily be the outcome.

Completed Homes for Sale

Speculation by home builders sitting on finished homes in 2007 is quite amazing.

What about now?

Supply of Homes in Months at Current Sales Rate

Note that spikes in home inventory coincide with recessions.

A 5.9 month supply of homes did not seem to be a problem in March of 2006. In retrospect, it was the start of an enormous problem.

In absolute terms, builders are nowhere close to the problem situation of 2007. Indeed, it appears that builders learned a lesson.

Nonetheless, pain is on the horizon if rates keep rising.

Price Cutting Coming Up?

If builders cut prices to get rid of inventory, everyone who bought in the past few years is likely to quickly go underwater.

end

Home prices are rising faster than incomes:

(courtesy zerohedge)

US Home Prices Surge Most Since 2014

For the 29th month in a row, US home prices rose at a faster pace than incomes with November prices rising a better than expected 6.41% – the highest since July 2014.

The 20-City Composite rose 6.41% YoY in November (above the 6.30% expectations)

 

 

 

 

The 20-City Composite price index is within 1% of its record highs from 2006…

 

“Top”? or “Breakout”?

end

SWAMP STORIES

 

It looks like we have some text messages referring to destroying evidence etc  The FBI is still withholding 85% if the texts and redacting many items that they refer to as personal.

The FBI is doing a good job of preventing the swamp from being drained

(courtesy zerohedge)

 

FBI Texts Discuss “Destroying Evidence”, Scramble To Find Hard Drives: Report

During a Sunday exchange between House Judiciary Committee Chairman Bob Goodlatte and Fox News’s Maria Bartiromo over recently released FBI text messages, Bartiromo asked if there were any unreleased texts between two anti-Trump FBI agents referring to destruction of evidence.

Goodlatte gave a guarded response to Bartiromo’s question, however he did mention an “earlier investigation led by former director Comey” in which evidence was destroyed – including by people working for former presidential candidate Hillary Clinton:

Bartiromo: After the election, they talked about this “secret society,” did they also talk about destroying evidence? I’m told there are some texts that haven’t been released yet about “we gotta get our hands on the hard drive” or “we gotta get our hands on the thumb drive.” 

Goodlatte: Well there’s certainly a lot of questions about things we do know about with regard to the earlier investigation led by former director Comey where evidence was destroyed before anybody outside of the FBI could get a look at it. Including evidence destroyed by people working for the Democratic presidential candidate.

Goodlatte’s comment about “evidence destroyed by people working for the Democratic presidential candidate” was likely in reference to Clinton aide Justin Cooper – who was involved in setting up Hillary Clinton’s personal server, and told the FBI that he smashed Hillary Clinton’s cell phones with a hammer at least twice:

Longtime Bill Clinton aide Justin Cooper, who helped set up the private email account that Hillary Clinton used as secretary of state, was the person usually responsible for setting up her new devices and syncing them to the server. Top aides Huma Abedin and Monica Hanley, as well as another person whose name is redacted, also helped Clinton set up her BlackBerry.

According to Abedin and Hanley, Clintons old devices would often disappear to parts unknown once she transitioned to a new device.

Cooper, according to the report, did recall two instances where he destroyed Clintons old mobile devices by breaking them in half or hitting them with a hammer. –Politico

 

Meanwhile, as we reported on Sunday, the DOJ is withholding over 85% of the text messages between Peter Strzok and Lisa Page, having submitted just 7,000 of the 50,000 recovered by the department. This does not include emails on personal devices, which the two anti-Trump investigators referred to over their FBI issued mobile phones.

In a January 19 letter from Assistant Attorney General Stephen Boyd to Congressional investigators, the DOJ said that they would not be providing “purely personal” text messages.

The department is not providing text messages that were purely personal in nature,” Boyd wrote. “Furthermore, the department has redacted from some work-related text messages portions that were purely personal. The department’s aim in withholding purely personal text messages and redacting personal portions of work-related text messages was primarily to facilitate the committee’s access to potentially relevant text messages without having to cull through large quantities of material unrelated to either the investigation of former Secretary of State Hillary Clinton’s use of a personal email server or the investigation into Russian efforts to interfere with the 2016 presidential election.”

Furthermore, special counsel Robert Mueller was allowed to review the batch of texts and make redactions as he saw fit.  Between the 85% of text messages Congressional Investigators don’t get to see, Mueller’s redactions, and now – an alleged scramble within the FBI to destroy evidence, one has to marvel at how hard the swamp is resisting being drained.

end

 

The house Intel committee votes to make the FISA memo public. The fun begins

(courtesy zerohedge)

House Intel Committee Votes To Make “Shocking” FISA Memo Public

Donald Trump 1 – Deep State 0

In a highly anticipated decision, on Monday evening the House Intelligence Committee voted to make public the memo alleging what some Republicans say are “shocking” surveillance abuses at the Department of Justice regarding the Trump presidential campaign.

In immediate response to the vote, the Committee’s top democrat Adam Schiff said that “we’ve crossed a deeply regrettable line”, adding that the “committee voted to put the president’s interest above the interest of the country.” (???)

We’ve crossed a “deeply regrettable line,” @AdamSchiffCA says of Intel Co meeting https://twitter.com/lesleyclark/status/958091271565914115 

Today this committee voted to put the president’s interest above the interest of the country, @RepAdamSchiff says of R vote to release memo https://twitter.com/lesleyclark/status/958116985514201092 

The decision weeks of speculation over whether the memo, which was drafted by staff for committee chairman Devin Nunes (R- Calif) would be made public. At the same time, it intensifies the dispute over what Democrats say is an all-out assault by Republicans to undermine special counsel Robert Mueller’s probe into Russian interference in the 2016 election.

Now the fate of the 4-page FISA memo is in the hands of Donald Trump: as we discussed earlier, the document will not be immediately released as under the House rule Republicans used to override the classification of the four-page memo, President Trump now has five days to review and reject its publication.

But, as per Bloomberg’s reporting earlier, the White House has signaled support for the document’s release and is widely expected to defy the DOJ in allowing the publication to go forward. The DOJ has opposed the release of the document, reportedly infuriating President Trump.

While Nunes has described the memo as “facts,” Democrats have slammed it as a collection of misleading talking points they are unable to correct without exposing the highly classified information underpinning the document.

As Bloomberg disclosed earlier on Monday, releasing the memo without allowing them to review it on those grounds, Assistant Attorney General Stephen Boyd wrote to Nunes, would be “extraordinarily reckless.”

It truly doesn’t get any more insane than the @HouseDemocrats & @RepAdamSchiff asking to declassify & release a memo to the public just now that they wouldn’t even allow the House Intel majority members to read before voting.

Of course, the reason for the DOJ – and the Democrats’ fury – is well-known: Republicans who have read the memo have hinted heavily that it contains information that could unravel the entire Mueller investigation, long described by the president as a “witch hunt.”

In an amusing twist, now that transparency appears to be the watchword, the Republican controlled House Intel Committee also plans to release the transcript of the business meeting dealing with releasing the FISA memo.

Hse Intel Cmte plans to release transcript of business mtg dealing with releasing the FISA memo

While the precise contents of the memo remain unknown, it’s believed to contain allegations that the FBI did not adequately explain to a clandestine court that some of the information it used in a surveillance warrant application for Trump adviser Carter Page came from opposition research funded by the Clinton campaign, now known as the “Steele dossier.”

As Bloomberg reported earlier, citing three House lawmakers who have read the memo, the memo claims FBI officials didn’t provide a complete set of facts in requests made to a Foreign Intelligence Surveillance Act court to obtain a warrant or warrants on Carter Page, a Trump campaign associate.

Furthermore, the memo claims important details were left out that might have kept a judge from issuing a surveillance warrant, or possibly two, targeting Page. Those include its claims that investigators were relying partly on an unverified dossier put together by an opposition research firm that hired a former British spy, Christopher Steele — work that was funded by Trump’s opponent, Hillary Clinton, and Democrats.

The memo also spotlights Deputy AG Rod Rosenstein’s role in approving the warrant application, according to the New York Times. Rosenstein appointed Mueller and has become a recent target on the right — as well as reportedly garnering the frustration of the president.

* * *

According to The Hill, it’s unclear how much input the DOJ will have prior to the publication of the memo. Typically, when sensitive documents are declassified, the agencies with equities in the intelligence weigh in to assess whether its release would damage national security. But the committee initially stonewalled the DOJ from viewing the document because, as one committee member put it last week, “They’re the ones that have the problem.”

On Monday morning, deputy press secretary Raj Shah hinted on CNN that the DOJ would also not have an opportunity to review the document during the White House pre-release review. “The Department of Justice doesn’t have a role in this process,” he told CNN.

FBI Director Christopher Wray was reportedly allowed to view the document in the committee’s secure spaces over the weekend. A committee spokesperson declined to comment on Monday, as did the FBI.

Another unanswered question revolves around the highly-classified intelligence that underpins the memo, which came from documents provided to the committee by the DOJ as part of an agreement brokered by House Speaker Paul Ryan (R-Wis.). The DOJ has said that the release of the memo would be an abrogation of the terms of that agreement, an assertion that spokesmen for both Ryan and Nunes reject.

Lawmakers say the underlying intelligence justifying the memo’s allegations is so sensitive that only eight members of Congress are able to view it. Nunes and ranking member Adam Schiff (D-Calif.) are two of the eight figures, but the other members of the Intelligence Committee are not. The top two lawmakers on the Senate Intelligence Committee are also part of the so-called Gang of Eight, but while they have access to the underlying intelligence, Nunes has denied committee requests to see the memo.

“Seeking Committee approval of public release would require [House Permanent Select Committee on Intelligence] committee members to vote on a staff-drafted memorandum that purports to be based on classified source materials that neither you nor most of them have seen,” Boyd told Nunes.

Nunes has brushed aside the notion that the memo wouldn’t be persuasive without the underlying intelligence to substantiate its claims, calling the argument Democratic obstruction of his investigation into DOJ misconduct.  The memo is a committee work product and the responsibility for releasing it, or not releasing it, rests with Congress.

The underlying intelligence, however, belongs to the executive branch, and Trump could unilaterally make it public if he wished.

For now, however, the decision whether the FISA memo will be made public – an event which is supposed to help Trump greatly in his ongoing battle against Special Counsel Mueller – is entirely in Trump’s hands, which will be a welcome change for the president. And incidentally, Trump will be delighted to learn that, at least according to Adam Schiff, “the FBI + DOJ are also apparently now under investigation by the R’s on House intel.

The FBI + DOJ are also apparently now under investigation by the R’s on House intel, @RepAdamSchiff

END
FBI director Wray supposedly was shocked by the FISA warrant and more importantly there is talk that McCabe asked agents to change with 302’s which is without a doubt an obstruction of justice
(courtesy zerohedge)

FBI Director Wray “Shocked To His Core” By FISA Memo, McCabe ‘Removed’ Next Day, More Heads To Roll: Report

FBI Director Christopher Wray was allegedly “shocked to his core” after viewing the four-page FISA memo Sunday night – hours before asking Deputy FBI Director Andrew McCabe to step down, according to journalist Sara Carter.

a
FBI Director Christopher Wray

Hannity sat down once again with journalist Sara Carter, whose sources say McCabe may have instructed FBI agents to alter their “302” forms – the paperwork an agent files after interviewing someone:

6) The 302 reveals the content of interview as well as identify ALL PARTICIPANTS. The 1023 outlines who met who, where, when, and why.

Carter: What we know tonight is that FBI Director Christopher Wray went Sunday and reviewed the four-page FISA memo. The very next day, Andrew McCabe was asked to resign. Remember Sean, he was planning on resigning in March – that already came out in December. This time they asked him to go right away. You’re not coming into the office. I’ve heard rep[orts he didn’t even come in for the morning meeting – that he didn’t show up.

Hannity: A source of mine told me tonight that when Wray read this, it shocked him to his core.

Sara Carter: Shocked him to his core, and not only that, the Inspector General’s report – I have been told tonight by a number of sources, there’s indicators right now that McCabe may have asked FBI agents to actually change their 302’s – those are their interviews with witnesses. So basically every time an FBI agent interviews a witness, they have to go back and file a report.

Hannity: Changes? So that would be obstruction of justice? 

Carter: Exactly. This is something the Inspector General is investigating. If this is true and not alleged, McCabe will be fired. I heard they are considering firing him within the next few days if this turns out to be true.

Carter said that McCabe “quitting” is just the beginning, and that more resignations will be coming.

As we reported yesterday, McCabe was “removed” from his post as deputy director, “leaving the bureau after months of conflict-of-interest complaints from Republicans including President Trump.” Several media outlets reported that McCabe is using his remaining vacation days to go on “terminal leave” and that his official retirement from the agency won’t happen until March, allowing him to collect the full pension.

And as we noted last week, FBI Director Wray threatened to resign after being pressured by AG Jeff Sessions.

BREAKING: Andrew McCabe has stepped down effective today as FBI deputy director, multiple sources familiar with the matter tell @ NBC News

Around the time of the reports of his impending retirement, McCabe had spent several marathon sessions answering questions from Congressional committees behind closed doors.

It was expected that McCabe would hang on until early March, when he would become eligible for his full pension. It’s unclear why he’s choosing to step down early.

McCabe’s accelerated resignation may a sign that Trump appointee Christopher Wray – who succeeded James Comey as FBI Director – is finally cleaning house. 

According to Axios, McCabe may be leaving in anticipation of the release of an inspector general’s report on how the FBI handled the Clinton email investigation.

.@AriFleischer: “[I] have regularly defended Bob Mueller. I used to defend James Comey on his investigation of Hillary. I can no longer do that. I think the investigation into Hillary has turned out to be a sham…In this instance, the FBI has let us all down.”

END
Seems the noose is getting tighter and tighter around McCabe’s neck.  The House Judiciary tells the FBI to preserve all emails of McCabe especially around the Trump election and afterwards.
(courtesy zerohedge)

House Judiciary Tells FBI To Preserve McCabe Emails Pertaining To Trump Election

The noose around the now former FBI Deputy Director Andrew McCabe appears to be getting tighter.

Just hours after news that McCabe was departing the FBI, allegedly forced out from his position, the Chair of the House Judiciary Committee Chairman, Republican Bob Goodlatte released a a letter urging FBI Director Christopher Wray to preserve Mr. McCabe’s emails, and all other communications, before his official departure from the agency.

From Goodlatte’s statement:

“Today’s news that FBI Deputy Director Andrew McCabe is stepping down from the Bureau is overdue. Recent revelations call into question Mr. McCabe’s leadership in the top operational post in the FBI.  However, Mr. McCabe’s departure certainly does not mean that we are done rooting out the problems at the FBI. I continue to be extremely troubled by the decisions made by the FBI during the 2016 presidential election and the role senior FBI officials played in these questionable decisions and irregularities.

“The only way to ensure the FBI remains the premier law enforcement agency in the world is to ensure that the leadership at the Bureau holds the trust of the American people. This change in leadership at the FBI is a good first step in repairing the damage to their reputation.”

And from his letter, highlights ours:

Deputy Director McCabe’s decision to step down comes at a time where a confluence of events and reporting show serious irregularities in the FBI and DOJ’s investigation of former Secretary of State Hillary Clinton’s mishandling of classified information. Deputy Director McCabe was prominently involved in both that investigation and the FBI’s pre-Special Counsel investigation into allegations of collusion between the Trump campaign and Russia. It is essential that the FBI preserve Mr. McCabe’s emails, and all other communications, before his official departure from the agency.

Here is the request to preserve McCabe’s emails and documents:

This Committee currently has an investigation open on the FBI’s handling of the events surrounding the 2016 election. It is therefore essential that we have all of Deputy Director McCabe’s documents and communications pertaining to the 2016 election. It is also in the public interest that all documents and communications pertaining to Mr. McCabe’s involvement in the pre-Special Counsel Russia investigation be preserved from destruction or deletion. These measures are critical to ensure that this Committee and others can perform necessary and robust Congressional oversight.

Many have suggested that the timing of McCabe’s abrupt departure – just as the FISA memo was set to be released -was not accidental. Although confirmation will have to wait, at least until such time as the FBI assures the public that Hillary Clinton’s Bleach-Bit wasn’t used on its own servers to delete a few thousand emails…

* * *

Full Goodlatte letter below (link):

END

I will  see you WEDNESDAY night

HARVEY

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One comment

  1. Harvey, you are wrong about silver/dollar relationship.
    A “dollar” consists of 416 grains = 25.956 grams, in other words.
    1 oz Troy = 479.95 grains
    So it is .87 of a Troy ounce that is one dollar.

    Like

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