March 5/GOLD FALLS $4.10 TO $1319.00/SILVER FALLS 11 CENTS TO $16.39/IT ITALY, THE 5 STAR PARTY GAINS MOST VOTES AT 32%: TOGETHER WITH NORTHERN LEAGUE THEY HAVE EXACTLY 50% BUT LOOKS LIKE A HUNG PARLIAMENT/PAUL RYAN ASKS TRUMP TO END THE TARIFF WARS BUT IS SHOT DOWN BY TRUMP/VERY LITTLE PROGRESS WITH CANADA AND MEXICO ON NAFTA/SWAMP STORIES/

 

 

GOLD: $1319.00  DOWN $4.10

Silver: $16.39 DOWN 11 CENTS

Closing access prices:

Gold $1320.10

silver: $16.43

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: $1333.90 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1325.55

PREMIUM FIRST FIX: $8.35

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SECOND SHANGHAI GOLD FIX: $1332.39

NY GOLD PRICE AT THE EXACT SAME TIME: $1325.50

PREMIUM SECOND FIX /NY:$6.87

SHANGHAI REJECTS NY PRICING OF GOLD.

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LONDON FIRST GOLD FIX: 5:30 am est $1326.30

NY PRICING AT THE EXACT SAME TIME: $1325.80

LONDON SECOND GOLD FIX 10 AM: $1320.40

NY PRICING AT THE EXACT SAME TIME. $1320.60

For comex gold:

MARCH/

NUMBER OF NOTICES FILED TODAY FOR MARCH CONTRACT: 0 NOTICE(S) FOR NIL OZ.

TOTAL NOTICES SO FAR:2749 FOR 274900 OZ (8.5505 TONNES),

For silver:

MARCH

143 NOTICE(S) FILED TODAY FOR

715,000 OZ/

Total number of notices filed so far this month: 4205 for 21,025,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $11,514/OFFER $11,584: UP $486(morning)

Bitcoin: BID/ $11,535/offer $11,602: UP $507  (CLOSING/5 PM)

 

end

Let us have a look at the data for today

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In silver, the total open interest FELL BY A CONSIDERABLE SIZED 1,702 contracts from 192,332  FALLING TO 190,630 DESPITE FRIDAY’S STRONG 23 CENT RISE IN SILVER PRICING.  WE HAD SOME 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:  0 EFP’S FOR MARCH, 1316 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1316 CONTRACTS.  WITH THE TRANSFER OF 1316 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 24-48 HRS IN THE ISSUING OF EFP’S. THE 1316 CONTRACTS TRANSLATES INTO 6.580 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF MARCH:

5686 CONTRACTS (FOR 3 TRADING DAYS TOTAL 5686 CONTRACTS OR 28.430 MILLION OZ: AVERAGE PER DAY: 1895 CONTRACTS OR 6.476 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  28.43 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 4.06% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  521.905 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

ACCUMULATION FOR MONTH OF FEBRUARY: 244.945 MILLION OZ

RESULT: WE HAD SOME LOSS  IN COMEX OI SILVER COMEX DESPITE THE 23 CENT GAIN IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1316 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 1316 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE LOST  356 OI CONTRACTS i.e. 1316 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 1702  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER OF 23 CENTS AND A CLOSING PRICE OF $16.50 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.953 BILLION TO BE EXACT or 136% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 143 NOTICE(S) FOR 715,000 OZ OF SILVER

In gold, the open interest  FELL BY A CONSIDERABLE 4448 CONTRACTS FALLING TO 505451 . DESPITE THE HUGE RISE IN PRICE ON FRIDAY ($18.70) HOWEVER  FOR MONDAY, THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED AN FAIR SIZED  5140 CONTRACTS OF WHICH MARCH SAW THE ISSUANCE OF 55 CONTRACTS,  APRIL SAW THE ISSUANCE OF 5085 CONTRACTS ,  JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 505,451. 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. 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 FEBRUARY 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  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A GAIN OF 692  CONTRACTS: 4448 OI CONTRACTS DECREASED AT THE COMEX AND A FAIR SIZED 5140 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(692 oi gain in CONTRACTS EQUATES TO 2.15TONNES)

FRIDAY, WE HAD 20,030 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MARCH : 35,073 CONTRACTS OR 3,507,300  OZ OR 109.09 TONNES (3 TRADING DAYS AND THUS AVERAGING: 11,691EFP CONTRACTS PER TRADING DAY OR 1,169,100 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 3 TRADING DAYS IN  TONNES: 109.09 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 109.09/2200 x 100% TONNES =  4.26% OF GLOBAL ANNUAL PRODUCTION SO FAR IN MARCH ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1361.29 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY: 649.45 TONNES

Result: A  STRONG SIZED DECREASE IN OI AT THE COMEX DESPITE THE CONSIDERABLE RISE IN PRICE IN GOLD TRADING YESTERDAY ($18.70).  HOWEVER, WE HAD ANOTHER FAIR SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5140 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   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 5140 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 692 contractON THE TWO EXCHANGES:

5140 CONTRACTS MOVE TO LONDON AND 4448 C ONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 2.15 TONNES).

we had: 0 notice(s) filed upon for NIL oz of gold.

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

GLD

WITH GOLD DOWN $4.10 : NO CHANGES IN GOLD INVENTORY AT THE GLD /

Inventory rests tonight: 833.98 tonnes.

SLV/

WITH SILVER DOWN 11 CENTS TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

/INVENTORY RESTS AT 318.069 MILLION OZ/

end

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

1. Today, we had the open interest in silver FELL BY 1702  contracts from 192,332 DOWN TO 190,630 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE RISE  IN PRICE OF SILVER  (23 CENTS WITH RESPECT TO  FRIDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER  1316 EFP CONTRACTS FOR MAY  (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 CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  1702 CONTRACTS TO THE 1316 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A SMALL LOSS OF 356  OPEN INTEREST CONTRACTS  WE STILL HAVE A STRONG AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN MARCH (SEE BELOW). THE NET LOSS TODAY IN OZ ON THE TWO EXCHANGES:  1.780 MILLION OZ!!!

RESULT: A CONSIDERABLE  DECREASE IN SILVER OI AT THE COMEX DESPITE THE  RISE OF 23 CENTS IN PRICE (WITH RESPECT TO FRIDAY’S TRADING ). BUT WE ALSO HAD ANOTHER FAIR 1316 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR MARCH, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

(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)MONDAY MORNING/LATE SUNDAY NIGHT: Shanghai closed DOWN 2.39 POINTS OR 0.07% /Hang Sang CLOSED DOWN 697.06 POINTS OR2.28% / The Nikkei closed DOWN 139.55 POINTS OR 0.53%/Australia’s all ordinaires CLOSED DOWN 0.53%/Chinese yuan (ONSHORE) closed UP at 6.3400/Oil UP to 61.35 dollars per barrel for WTI and 64.44 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED  .   ONSHORE YUAN CLOSED DOWN AT 6.3400 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3395 /ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR . CHINA IS NOT  HAPPY TODAY (STRONGER CURRENCY BUT TERRIBLE CHINESE MARKETS/ ) 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 i)North Korea

b) REPORT ON JAPAN

3 c CHINA

China confirms 2018 slowdown

( zerohedge)

4. EUROPEAN AFFAIRS

i)The real reason for the closing of the Latvian bank and it is not the dubious money laundering charge.  The reason is that after the collapse of Cyprus in 2010, Russian oligarchs needed another country to park its European/USA funds and in 2014 they found one in new EU member Latvia.  The USA’s simple motive was to hurt Russia where it hurts the most ..in the pocketbook

( William Enghahl/Neo.org)

ii)Last night/Italy

The Euro slides as the anti-establishment vote surges

( zerohedge)

iii)And the results so far:  strong anti-establishment performance/hung parliament is the probable result.

( zerohedge)

iv)Confusion over the fact of Renzi’s resignation.  The Centre -right party with a poor showing is in shambles.
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

After losing its court battle with the Ukraine’s Naftogas, Russia’s Gazprom decided it was best to still not deal with them.  So they returned their prepaid deposit and now the Ukraine is freezing.

( zerohedge)

6 .GLOBAL ISSUES

i)In this excellent commentary, a global trade war (and it sure looks like we hare heading towards on) would lead to a huge 40% market crash

( zerohedge)

 

ii)Canadian dollar weakens terribly as Trump responds that tariffs will not come off until a new and “fair NAFTA agreement is signed.  It looks like NAFTA is dead in the water.

(courtesy zerohedge)

iii)As promised to you:  NAFTA is dead in the water. The loonie tumbles again late this afternoon when USA trade representative Lighthizer stated that discussions fell short of expectations and that time is running out.

( zerohedge)

7. OIL ISSUES

An extremely important commentary from zero hedge on oil.  They believe in 5 years, the uSA will surpass Russia as the world’;s largest oil producer at 12 million barrels per day. Also demand is expected to grow from around 86 million barrels per day up to 100 million barrels per day.  The uSA must build pipeline capacity or there will be extreme shortages.

(courtesy zerohedge)

8. EMERGING MARKET

India

Quite a scam:  the crooks used gold and diamonds to bribe a banker in this 2 billion dollar fraud at PNB.  All of the crooks escaped India and are probably in Hong kong

( zerohedge)

9. PHYSICAL MARKETS

i)A very important video for you to see.  Alasdair Macleod explains the significance of the March 26 oil futures contract which will inevitably be settled in gold.  He explains that the uSA was not happy with this and was probably the reason that Trump initiated tariffs on aluminum and steel.

a must view

( Alasdair Macleod)

ii)An acknowledgement of central bank manipulation in the gold market but I agree with C Powell that it is not for desperate dollar liquidity but to store value to currencies

( C Powell/GATA)

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

A. Economic data:

ISM services slip but PMI rises a bit.  However the report also shows soaring costinflaiton
( zerohedge)
B. Other USA stories
i)this is going to cost considerable money: a strong Nor’Easter pummels the east coast.
( zerohedge)

ii)The real story on the Fed unwind.  Wolf Richter has it right:  the Fed is unwinding QE perfectly to their plan( Wolf Richter/Wolfstreet)

iii)Another must read…David Stockman talks about the Trump trade wars which will certainly accentuate the problems with the huge 1.8 trillion of bonds that must be issued by the Fed. Finally, the buying of one’s stock is not going to help as the economy falters badly
( David Stockman)
iv)The USA will now experience a two fold problem.  The first is the huge 1.20 trillion dollar deficit coupled with the 600 billion of bonds that will be rolled off the Fed’s balance sheet.  This $1.8 trillion bond issuance may clear but certainly not without the rise in the 10 yr bond yield into the 4 to 5% area.  That will break valuations and cause severe hardship to its economy.

Now the second problem is the trade war initiated by Trump in order to save its economy. He now plans a retaliatory tax…i.e. whatever tax Europe applies, so will the USA.  The EU adds considerably more taxes on products than the USA(it is more protectionist that the uSA) so a tax by Trump will certainly hurt products coming into the USA and that will hurt stock markets from around the world.  It will also be hugely inflationary in the USA and again that will cause costs to rise and break valuations causing severe hardship to its economy.

( zerohedge)
v)Jim Rickards outlines the 3 stages of economic warfare:
1. a currency war
2 a trade war
3. a shooting war
he describes in detail the past and how that led to war and today is no different
( Jim Rickards/Daily Reckoning)

vi)Paul Ryan and for that matter, many Republicans are asking Trump to kill the proposed tariffs on steel and aluminum/  If not they may respond in kind. Interestingly enough the stock market did not go down as scheduled with the tariffs( zerohedge)

vi b)Ryan is rejected by Trump.  The markets believe Trump is bluffing.  Trump may be at war with his own party.

( zerohedge)

vii)Another indicator that things are not doing well in the uSA:  car sales by all companies. Light trucks are doing ok but not cars. You can imagine the pain of European car manufacturers if Trump adds a huge tax equal to what EU applies  in Europe as Europe is far more protectionist than the USA.
( jeffrey Snyder/Alhambra Investment Partners)

viii)Trump offers no tariff exemptions with regard to tariffs that he will implement.  Due to the tariffs on aluminum and steel and both products are exported from Canada, you can assume that NAFTA is officially dead..

( zerohedge)

ix) Republican Senator Cochran to resign next month due to health reasons

( zerohedge)

x)I doubt this will happen but we had better report on it:  the USA is said to consider a new military action against Syria as there are claims that Assad used chemical weapons

( zerohedge)

 
C)SWAMP STORIES

a)Eric Holder believes that Mueller will hit Trump with obstruction charges.  I do not think so…it is his constitutional authority to fire Comey and his actions were not criminal in any way

( zero hedge)

b)Trump on the war path this morning as he slams the Obama administration for trying to discredit the Trump candidacy and then his presidency

(courtesy zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY  4448 CONTRACTS DOWN to an OI level 505,451  DESPITE THE CONSIDERABLE RISE IN THE PRICE OF GOLD ($18.70 GAIN/ FRIDAY’S TRADING).  WE HAD CONSIDERABLE COMEX GOLD LIQUIDATION.  HOWEVER THE CME REPORTS THAT  THE BANKERS ISSUED AN FAIR SIZED  COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A 5085 EFP’S ISSUED FOR APRIL , 55 EFP’s  FOR  MARCH AND 0 FOR JUNE AND ZERO FOR ALL OTHER MONTHS:  TOTAL  5140 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: 692 OI CONTRACTS IN THAT 5040 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST 1,702 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 692 contracts OR 69200  OZ OR 2.15 TONNES.

Result: A  CONSIDERABLE SIZED DECREASE IN COMEX OPEN INTEREST DESPITE THE STRONG RISE IN FRIDAY’S GOLD TRADING ($18.70.)   TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 692 OI CONTRACTS..

We have now entered the non active contract month of MARCH where we GAINED 27 contracts UP to 672 contracts. We had 0 notices served upon yesterday, so in essence we GAINED BACK 27 contacts or an additional 2700 oz will not stand for delivery at the comex

April saw a LOSS of 7405 contracts DOWN to 314,822. May saw another gain of 74 contracts to stand at 104. The really big June contract month saw a gain of 2176 contracts up to 108,342 contracts.

We had 0 notice(s) filed upon today for  nil oz

comex gold volumes are RISING AGAIN

Here is a summary of the latest gold trading volumes at the Comex per year

certainly the introduction of EFP’s has certainly had an effect:

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY: 220,550 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY:  281,421 CONTRACTS

comex gold volumes are RISING AGAIN

Here is a summary of the latest gold trading volumes at the Comex per year

certainly the introduction of EFP’s has certainly had an effect:

Meanwhile, gold-trading volumes on the COMEX have never been higher:

end

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And now for the wild silver comex results.

Total silver OI FELL  BY A CONSIDERABLE 1702  CONTRACTS FROM 192,332 DOWN TO 190,630 DESPITE FRIDAY’S  23 CENT RISE IN TRADING).   HOWEVER,WE WERE ALSO INFORMED THAT WE HAD  1316 EMERGENCY EFP’S FOR MAY ISSUED BY OUR BANKERS 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: 1316.   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 OBVIOUSLY HAD NO LONG COMEX SILVER LIQUIDATION BUT WE ALSO HAD A GOOD SIZED GAIN IN TOTAL SILVER OI FROM OUR TWO EXCHANGES. 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 LOST  356  SILVER OPEN INTEREST CONTRACTS

1702 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1316 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:356 CONTRACTS 

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the  active delivery month of MARCH and here the front month LOST 216 contracts FALLING TO 1041 contracts. We had 204 contracts filed upon yesterday, so we LOST 16 contracts or an additional 80,000 will NOT stand in this active delivery month of March.

April GAINED 4 contracts RISING AT 418 .

The next big active delivery month for silver will be May and here the OI lost by 1747 contracts down to 147,117

We had 143 notice(s) filed for 715,000 OZ for the MARCH 2018 contract for silver

INITIAL standings for MARCH/GOLD

MARCH 5/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 nil oz
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz  nil
No of oz served (contracts) today
0 notice(s)
 NIL OZ
No of oz to be served (notices)
672 contracts
(67200 oz)
Total monthly oz gold served (contracts) so far this month
0 notices
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
i) Into Brinks:  NIL oz
total inventory deposit into the dealer accounts:  NIL  oz
we had nil withdrawal out of the customer account:
total withdrawal: nil  oz
we had 0 customer deposit
total customer deposits: nil  oz
we had 0 adjustment(s)
total registered or dealer gold:  339,378.269 oz or 10.556 tonnes
total registered and eligible (customer) gold;   9,133,645.713 oz 284.156 tones
THE COMEX IS AGAIN IN STRESS AS ONLY 10.556 TONNES OF GOLD ARE LEFT TO SERVICE DELIVERIES
 

For MARCH:
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 0 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 MARCH. contract month, we take the total number of notices filed so far for the month (0) x 100 oz or 0 oz, to which we add the difference between the open interest for the front month of FEB. (672 contracts) minus the number of notices served upon today (0 x 100 oz per contract) equals 67,200 oz, the number of ounces standing in this nonactive month of MARCH (2.0902 tonnes)

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

No of notices served (0 x 100 oz or ounces + {(672)OI for the front month minus the number of notices served upon today (0 x 100 oz )which equals 67,200 oz standing in this  nonactive delivery month of March . THERE IS 10.556 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

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XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

IN THE LAST 17 MONTHS 70 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

MARCH INITIAL standings/SILVER

March 5 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
  14,913.410 oz
DELAWARE
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
NIL oz
No of oz served today (contracts)
143
CONTRACT(S
(715,000 OZ)
No of oz to be served (notices)
898 contracts
(4490,000 oz)
Total monthly oz silver served (contracts) 4205 contracts

(21,025,000 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 0 inventory movement at the dealer side of things

total inventory deposits/withdrawals/ into dealer: nil oz

we had 0 deposits into the customer account

ii) JPMorgan:  zero

*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.

JPMorgan now has 135 million oz of  total silver inventory or 54% of all official comex silver.

total deposits customer account: NIL oz

JPMorgan did not add any silver into its warehouses (official) today.

we had 3 withdrawals from the customer account;

i) Out of Delaware: 25,300.750 oz

ii) Out of CNT: 599,138.810 oz

iii) Out of Brinks: 199,270.757 oz

total withdrawals; 823,719.300  oz

we had 1 adjustments

i) out of CNT:  603,196.330  oz  was adjusted out of the customer is this landed into the dealer account of CNT

total dealer silver:  57,444 million

total dealer + customer silver:  251.779 million oz

The total number of notices filed today for the March. contract month is represented by 143 contract(s) FOR 715,000 oz. To calculate the number of silver ounces that will stand for delivery in March., we take the total number of notices filed for the month so far at 4205 x 5,000 oz = 21,025,000 oz to which we add the difference between the open interest for the front month of Mar. (1257) and the number of notices served upon today (143 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the March contract month: 4205(notices served so far)x 5000 oz + OI for front month of March(1257) -number of notices served upon today (143)x 5000 oz equals 25,515,000 oz of silver standing for the March contract month. 

We LOST an additional 16 contracts or 80,000 additional silver oz will NOT stand for delivery at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 54.428 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 79,045 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 79,045 CONTRACTS EQUATES TO  395 MILLION OZ OR 56.5% 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 -1.66% (MARCH 5/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.38% to NAV (March 5/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.66%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.38%/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 RISES TO -2.95%: NAV 13.63/TRADING 13.23//DISCOUNT 2.95.

END

And now the Gold inventory at the GLD/

March 5/WITH GOLD DOWN $4.10/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.98 TONNES

MARCH 2/WITH GOLD UP $18.70/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 833.98 TONNES

March 1/WITH GOLD DOWN ANOTHER $12.30/A HUGE CHANGE IN GOLD INVENTORY/ A DEPOSIT OF 2.96 TONNES/INVENTORY RESTS AT 833.98 TONNES

FEB 28/WITH GOLD DOWN ANOTHER 70 CENTS/NO CHANGE IN GOLD INVENTORY/INVENTORY RESTS AT 831.03 TONNES/.

feb 27/WITH GOLD DOWN $13.80 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 831.03 TONNES

FEB 26/WITH GOLD UP $2.40/WE HAD ANOTHER INVENTORY GAIN/THIS TIME 1.77 TONNE ADDITION TO THE GLD INVENTORY/INVENTORY RESTS AT 831.03 TONNES/WE HAVE HAD 5 INCREASES IN THE PAST 6 TRADING GOLD SESSIONS/

FEB 23/WITH GOLD DOWN $1.15, WE HAD A GOOD INVENTORY GAIN OF 1.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 829.26 TONNES

FEB 22/WITH GOLD UP 90 CENTS AGAIN TODAY, WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 827.79 TONNES

FEB 21/ WITH THE 90 CENT GAIN WE HAD ANOTHER DEPOSIT OF 3.15 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS TONIGHT AT 827.79 TONNES

Feb 20/WITH GOLD DOWN BY $24.25, THE CROOKS DECIDED THAT THEY HAD BETTER RETURN (DEPOSIT) 3.34 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS TONIGHT AT 824,64 TONNES

Feb 16/WITH GOLD UP BY 25 CENTS, THE CROOKS DECIDED AGAIN TO RAID THE COOKIE JAR BY WITHDRAWING 2.36 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 821.30 TONNES

Feb 15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.66 TONNES

Feb 14/AN ADDITIONAL OF 2.95 TONNES OF GOLD INTO GLD WITH THE HUGE GAIN OF 27.40 IN PRICE/INVENTORY RESTS AT 823.66 TONNES

Feb 13/WITH GOLD UP $3.40 WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 820.71 TONNES

Feb 12/STRANGE!!WITH GOLD RISING BY 12.00 DOLLARS, THE CROOKS DECIDED AGAIN TO WITHDRAW 5.6 TONNES OF GOLD FOR EMERGENCY USE ELSEWHERE/INVENTORY RESTS AT 820.71 TONNES

Feb 9/AGAIN WITH HUGE TURMOIL ON THE MARKETS, THE CROOKS WITHDREW 2 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 826.31 TONNES

Feb 8/DESPITE THE GOOD GAIN IN PRICE FOR GOLD TODAY/THE CROOKS REMOVED .96 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.31 TONNES

FEB 7/AN UNBELIEVABLE 12.08 TONNES WAS REMOVED BY THE CROOKED BANKERS AND THIS GOLD WAS USED IN THE ASSAULT THESE PAST FEW DAYS/INVENTORY RESTS AT 829.27 TONNES

Feb 6/AGAIN VERY STRANGE: WITH TODAY’S TURMOIL, THE CROOKS DID NOT ADD ANY GOLD INVENTORY INTO THE GLD/INVENTORY REMAINS AT 841.35 TONNES

Feb 5  Strange,with all of today’s turmoil, the crooks at the GLD decided to add zero ounces into GLD inventory/inventory rests at 841.35 tonnes

Feb 2/no change in gold inventory at the GLD/Inventory rests at 841.35 tonnes

Feb 1/with gold up by $8.00/the crooks decided not to add any new physical gold metal into the GLD./inventory rests at 841.35 tonnes

Jan 31/with gold up $3.15 today, GLD shed another 5.32 tonnes of gold from its inventory/inventory rests at 841.35 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MARCH 5/2018/ Inventory rests tonight at 833.98 tonnes

*IN LAST 335 TRADING DAYS: 107,16 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 265 TRADING DAYS: A NET 50.14 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory

March 5/WITH SILVER DOWN 11 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ/

MARCH 2/WITH SILVER UP 23 CENTS: A HUGE 1.479 MILLION OZ WAS ADDED TO SILVER’S INVENTORY/INVENTORY RESTS AT 318.069 MILLION OZ/

March 1/WITH SILVER DOWN 11 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ./

FEB 28/WITH SILVER DOWN 5 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ/

feb 27/WITH SILVER DOWN 17 CENTS/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 316.590 MILLION OZ

FEB 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ/

FEB 23/WITH SILVER DOWN 10 CENTS TODAY, WE HAD ANOTHER HUGE ADDITION OF 1.315 MILLION OZ/INVENTORY RESTS AT 316.590 MILLION OZ/

fEB 22.2018/WITH SILVER DOWN  1 CENT TODAY, WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.271 MILLION OZ/

FEB 21/WITH SILVER UP 15 CENTS TODAY, WE HAD A GOOD SIZED INVENTORY ADDITION OF 1.226 MILLION OZ/INVENTORY RESTS AT 315.271 MILLION OZ/

Feb 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ

Feb 16/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 15/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 14./NO CHANGE IN SILVER INVENTORY DESPITE THE HUGE RISE IN PRICE/INVENTORY RESTS AT 314.045 MILLION OZ

Feb 13./NO CHANGE IN SILVER INVENTORY TODAY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 12/AGAIN, WITH TODAY’S HUGE RISE IN SILVER PRICE, IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 9/AGAIN WITH TURMOIL ON THE MARKETS, STRANGELY IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 8/DESPITE THE TURMOIL TODAY AND A PRICE RISE: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

FEB 7/no change in silver inventory at the SLV/Inventory rests at 314.045 million oz/

Feb 6/WITH ALL OF TODAY’S TURMOIL/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 5/ we had HUGE change in silver inventory at the SLV/ A DEPOSIT OF 1.131 MILLION OZ INTO THE SLV/Inventory rests at 314.045 million oz/

Feb 2/we lost 982,000 oz from the SLV inventory /inventory rests at 312.914 million oz/

Feb 1/no change in silver inventory at the SLV/Inventory rests at 313.896 million oz/

Jan 31/ no change in inventory at the slv in total contrast to gold/inventory rests at 313.896 million oz/

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

MARCH 5/2018: NO CHANGES TO SILVER INVENTORY/

Inventory 318.069 million oz

end

6 Month MM GOFO 1.94/ and libor 6 month duration 2.03

Indicative gold forward offer rate for a 6 month duration/calculation:

G0FO+ 1.94%

libor 2.23 FOR 6 MONTHS/

GOLD LENDING RATE: .29%

XXXXXXXX

12 Month MM GOFO
+ 2.36%

LIBOR FOR 12 MONTH DURATION: 2.50

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.140

end

Major gold/silver trading /commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Silver bullion will likely outperform gold bullion going forward

by John Rubino of Dollar Collapse

Normally the action in the gold and silver futures markets tends to be pretty similar, since the same general forces affect both precious metals. When inflation or some other source of anxiety is ascendant, both metals rise, and vice versa.

But lately – perhaps in a sign of how confused the world is becoming – gold and silver traders have diverged. Taking gold first, the speculators – who tend to be wrong at major inflection points – remain extremely bullish. Commercial traders, meanwhile – who tend to be right when speculators are wrong – are extremely bearish, with short positions more than double their longs. Historically that’s been a setup for a big drop in gold’s price.

Viewed as a chart with the gray bars representing speculators and red bars the commercials, and where divergence is bearish and convergence bullish, the result is pretty ugly.

But now check out silver. Where gold futures speculators’ long positions are three times their short bets, silver speculators are actually more short than long. In other words, the people who are usually wrong are bearish. The commercials, meanwhile, are almost in balance, which is usually bullish for silver’s subsequent action.

Shown graphically, speculators and commercials are meeting the middle at zero, something that’s both very rare and very positive.

What does this mean? One possible explanation is that silver has gotten too cheap relative to gold and needs to be revalued. That could happen in several ways, with both metals rising but silver rising more, or both falling but silver falling less. Or with gold dropping while silver rises, as improbable as that seems.

As the chart below illustrates, gold has recently been rising relative to silver (or silver has been falling relative to gold) with the gold/silver ratio now close to 80, meaning that it takes 80 ounces of silver to buy one ounce of gold. It’s been there two other times in the past decade and both times gold subsequently rose while silver rose a lot more.

Based on this (admittedly short) bit of recent history, an interesting trade might be to short gold and go long silver on the assumption that silver bullion will outperform gold bullion going forward. Or just stack more silver than usual for a while.

With the world’s mines producing only about 10 times as much silver as gold while silver stockpiles are dwarfed by those of gold because so much silver is used and then lost in industrial applications, this might be a trade that works for years rather than months.

News and Commentary

Stocks Mixed Amid Trade Fears; Italian Bonds Drop: Markets Wrap (Bloomberg)

Gold prices gain as dollar weakens amid trade war fears (Reuters)

Gold snaps multiday skid on trade-war fears, but logs weekly loss (Marketwatch)

Texas endowment “in no rush to sell”  $1 billion gold position – New CEO says (Gata)

Ex–FDIC chief Sheila Bair says bitcoin’s like dollars — neither has intrinsic value  (Marketwatch)


Source: Bloomberg

U.S. dollar outlook darkens as trade war looms (Reuters)

New analysis sees return of trillion-dollar budget deficits (CNBC)

Dumping U.S. debt may become a weapon in global trade war (Reuters)

Why South Africa Is Ripping Up Its Mining Rules Again (Bloomberg)

’Flation Is Gone. Inflation Is Back (Moneyweek)

Gold Prices (LBMA AM)

05 Mar: USD 1,326.30, GBP 958.78 & EUR 1,075.63 per ounce
02 Mar: USD 1,316.75, GBP 955.70 & EUR 1,071.04 per ounce
01 Mar: USD 1,311.25, GBP 953.80 & EUR 1,075.75 per ounce
28 Feb: USD 1,320.30, GBP 951.14 & EUR 1,080.53 per ounce
27 Feb: USD 1,332.75, GBP 954.78 & EUR 1,081.26 per ounce
26 Feb: USD 1,339.05, GBP 953.00 & EUR 1,085.30 per ounce

Silver Prices (LBMA)

05 Mar: USD 16.51, GBP 11.95 & EUR 13.42 per ounce
02 Mar: USD 16.45, GBP 11.92 & EUR 13.36 per ounce
01 Mar: USD 16.32, GBP 11.87 & EUR 13.39 per ounce
28 Feb: USD 16.44, GBP 11.88 & EUR 13.45 per ounce
27 Feb: USD 16.61, GBP 11.91 & EUR 13.48 per ounce
26 Feb: USD 16.67, GBP 11.88 & EUR 13.52 per ounce


Recent Market Updates

– Trump Risks Trade and Currency Wars – Protectionism and Economic War Loom
– Four Key Themes To Drive Gold Prices In 2018 – World Gold Council
– Is The Gold Price Going To $10,000? (Goldnomics Podcast 3)
– Gold Corridor From Dubai to China Sought By China
– Digital Gold Provide the Benefits Of Physical Gold?
– Weekly Briefing: Currency Wars – ECB Warns Re Trump, Russia and Turkey Buy Gold and BOE Bitcoin Warning
– Russian Central Bank Buys Gold – 600,000 Ounces Or 18.7 Tons In January As Venezuela Launches ‘Petro Gold’
– Bitcoin or British Pound ‘Pretty Much Failed’ As Currency?
– Bank Bail-In Risk In European Countries Seen In 5 Key Charts
– US-China Trade War Escalates As Further Measures Are Taken

Mark O’Byrne
Executive Director
end

Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.

it think it would be a great idea to look at this!

please read at:  https://kinesis.money/#/

(Andrew Maguire)

Andrew Maguire

2:57 PM (1 hour ago)
to me

Harvey

Here It is my friend!  https://kinesis.money/#/ Please let everyone know.

Let catch up on Monday if you have time. We have billions in the hopper ready to be allocated on the 1st day of trading. The paper market days are over.

Warm regards

Andy

end.

A very important video for you to see.  Alasdair Macleod explains the significance of the March 26 oil futures contract which will inevitably be settled in gold.  He explains that the uSA was not happy with this and was probably the reason that Trump initiated tariffs on aluminum and steel.

a must view

(Alasdair Macleod)

Alasdair Macleod: The yuan oil futures contract’s implications for gold

 Section: 

10:43a ET Saturday, March 3, 2018

Dear Friend of GATA and Gold:

In a three-minute video posted at YouTube yesterday, GoldMoney research director Alasdair Macleod explains the connection between gold and the oil futures contract priced in yuan that China will begin offering on March 26. The contract, Macleod explains, is part of the general movement away from the U.S. dollar by China, Russia, and other Asian countries. The video is headlined “Oil-Yuan Futures to Start Later in the Month — Implications For Gold” and can be seen here:

https://www.youtube.com/watch?v=UYHb76Oo1RE&t=14s

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

end

An acknowledgement of central bank manipulation in the gold market but I agree with C Powell that it is not for desperate dollar liquidity but to store value to currencies

(courtesy C Powell/GATA)

A new theory about ‘gold pukes’: Banks desperate for dollar liquidity

 Section: 

10:30p ET Sunday, March 4, 2018

Dear Friend of GATA and Gold:

Zero Hedge tonight calls attention to an interview done with Jeffrey Snider, chief investment strategist and head of global research at Alhambra Investment Partners in Palmetto Bay, Florida, by hedge fund manager Erik Townsend at his MacroVoices internet site. Snider acknowledges that central banks are active in the gold market through leases and swaps but argues that their primary objective is not to suppress the gold price in defense of government currencies but to provide emergency liquidity and collateral to investment and commercial banks at times of market stress.

“Gold pukes,” Snider says, are desperate grabs for dollar liquidity by the private-sector banks selling collateral that happens to be handy.

Of course Snider’s theory does not match the accounts provided by central bank records themselves, which emphasize currency defense as the objective of intervention in the gold market. Nor does Snider’s theory explain the suddenness of the “gold pukes,” since no one who was more interested in getting a decent price for gold than in driving gold’s price down would sell so much in a few minutes. He would spread his sales out over at least a full day.

Even so, Snider faults the surreptitiousness of central bank activity in the gold market and the dishonesty of central bank balance sheets in regard to gold. That’s more than readers will ever get from the Financial Times and Wall Street Journal.

A transcript of Townsend’s interview with Snider is posted at MacroVoices here:

https://www.macrovoices.com/macro-voices-research/podcast-transcripts/16…

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

END

The world is producing approximately 3260 tonnes per year, of which China is now 430 tonnes (dropping from 460) and Australia rising to 301 tonnes and Russia at 274 tonnes.  I will use from now one:  3260 – 430 -275 =  2555 as gold production (ex China ex Russia)

Peak gold maybe but Australian and Russian output still rising

March 4, 2018lawrieongold

Now March is with us we are beginning to receive reasonably accurate figures on 2017 gold production around the world and the bi g question is is peak gold here or not. The answer is maybe. According to the World Gold Council’s figures, global gold output actually increased in 2017, but by such a small margin that it should probably be considered flat at 3,267 tonnes – as compared with 3,260 tonnes a year earlier – a tiny 0.2% increase and with global output continuing to trend downwards we can probably assume that 2017 was indeed the year of peak gold.

But, there is much variation between national outputs. While the world’s largest gold producer – China – is estimated to have seen its gold output fall by 9-10%, the world’s second, third and fourth largest miners – Australia, Russia and the USA have reportedly seen their annual gold production increase, but perhaps by not as much in combination as the fall in Chinese output.

As to the actual figures it all comes down to the accuracy of those reporting. China’s output reportedly fell to 430 tonnes from over 460 tonnes in 2017.

There is an argument ongoing as to which nation is currently the world’s second largest gold producer. In 2016 it was Australia with 287 tonnes while Russia was in 3rd place with 274 tonnes. Australian consultancy, Surbiton Associate which tends to produce very accurate figures on Australia reports 2017 Australian production at 301 tonnes, a good increase on 2016, and avers Australia remains the world’s second largest producer of gold. However, as we reported here three weeks ago (See: Russia may now be World No. 2 Gold Miner), the Russian Finance Ministry stated that Russian gold output in 2017 was a little over 306 tonnes which would put it ahead of Australia as the World No.2. Reports also suggest that gold output from other top producers Canada and Peru grew in 2017, while that of the former No.1 gold miner, South Africa continued to fall by nearly 4% last year according to that country’s Bureau of Statistics.

But the actual league table of producers is probably immaterial – it is the overall figure which counts and that does suggest that global gold production has, at the very least, plateaued. Cutbacks on gold exploration and big new capital projects, as the lower gold prices after the 2012 peak caused the big mining companies to rethink their expansion plans and capital expenditures, are taking their toll. Most of the big miners are predicting short term production falls after a number of years of ‘growth at any cost’.

Back to Australia and the latest Surbiton Associates assessment though: Australian gold mine production in calendar 2017 resultedin the highest annual output since 1999. Total gold mine output in 2017 reached 301 tonnes or almost 9.7 million ounces, up three tonnes on calendar 2016. Production in the December quarter 2017 totalled some 80 tonnes, up six tonnes on the previous quarter.

“At the average gold price for 2017, the 301 tonnes was worth almost A$16 billion,” said Dr Sandra Close, a Surbiton Associates’ director. “Australian gold production is still trending upwards and the next few years look promising.”

“The higher output in the December quarter was due to a number of factors including the strong recovery at Newcrest’s Cadia East mine near Orange, NSW which was almost 60,000 ounces higher,” Dr Close said. “Other operations with higher output included the Super Pit’s increase of 28,000 ounces, Peak up 21,000 ounces and Tropicana up 19,000 ounces.

“Further out, development of the Gold Fields and Gold Road Resources’ Gruyere joint venture in WA is one- third complete, with the start of mining scheduled for late this year,” Dr Close said. “The operation will commence in early 2019 at a rate of around 270,000 ounces of gold per year when in full production.”

The only closure of note was Doray Minerals’ Andy Well mine. It commenced production in 2013 and was placed on care and maintenance in early November, after producing about 40,000 ounces in 2017.

“Given the number of projects coming on stream and with few closures anticipated, it would not be surprising to see another 20 tonnes of production added to Australia’s annual output,” Dr Close said. “This suggests that Australia’s all-time record annual gold production of 314 tonnes recorded in 1997 might well be exceeded.”

She said however, that despite the generally upward trend anticipated, production will probably decline in the March quarter 2018 due to wet weather in Western Australia which is a common occurrence early in the year.

As noted above, Surbiton estimates thst Australia remains the world’s second largest gold producer behind China which produced an estimated 4300 tonnes in 2017.

Australia’s largest gold producers for the 2017 year were:

https://lawrieongold.com/2018/03/04/peak-gold-maybe- but-australian-and-russian-output-still-rising/

-END-

THE FOLLOWING CAME FROM KOOS JANSEN:

YOU WILL NOTE THAT FOR THE FIRST TIME EVER CHINA EXPORTED GOLD TO LONDON.

THE QUESTION IS WHY?

I ASKED MY GOOD FRIEND  REG HOWE FOR HIS THOUGHTS ON THIS AND WE AGREE THAT THERE ARE TWO POSSIBILITIES:  1) THAT THERE IS EXTREME SHORTAGE IN LONDON AND A MAJOR BANK COULD NOT DELIVER UPON ALONG OVER THERE..  CHINA WOULD BE ASKING FOR A BIG QUID PRO QUO FOR PROVIDING THE NECESSARY PHYSICAL.  (IT MAKES SENSE IN THE FACT THAT GOLD IS IN BACKWARDATION IN LONDON)

2. TO HELP IN THE FACILITATION OF THE NEW OIL FOR YUAN FOR GOLD NEW FORMAT OR SOME FUTURE MEASURE THAT CHINA WILL REQUIRE OR AT LEAST BENEFIT FROM ADDITION PHYSICAL LIQUIDITY IN LONODN..

REGARDLESS, IT SHOWS SCARCITY OVER THERE.

FROM REG HOWE TO ME:

“Have read speculation that it may have to do with the mechanics of settling the new oil and gold contracts in physical.  More generally, I would guess it’s one of two things: (1) Chinese help in containing some serious stress in the gold market due to lack of physical, e.g., some central bank or major bullion bank unable to deliver, in which case there is likely a big quid pro quo; or (2) a positioning to facilitate some (other) future measure by China that will require or at least benefit from additional physical liquidity in London. In any event, seems to be more evidence of severe shortage of physical in London, otherwise they would just buy it there at today’s suppressed prices.”

END


Your early MONDAY 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 6.3400  /shanghai bourse CLOSED DOWN 2.39 POINTS OR 0.07%  / HANG SANG CLOSED DOWN 697.06 POINTS OR 2.28%
2. Nikkei closed DOWN 139.55 POINTS OR 0.66% /USA: YEN FALLS TO 105.64/ STILL DEADLY AS YEN CARRY TRADERS DISINTEGRATE

3. Europe stocks OPENED DEEPLY IN THE GREEN EXCEPT ITALY    /USA dollar index RISES TO 90.08/Euro FALLS TO 1.2299

3b Japan 10 year bond yield: FALLS TO . +.043/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 105.64/ 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:: 61.35  and Brent: 64.44

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 UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.633%/Italian 10 yr bond yield UP to 2.03% /SPAIN 10 YR BOND YIELD UP TO 1.513%

3j Greek 10 year bond yield FALLS TO : 4.36?????????????????

3k Gold at $1323.50 silver at:16.52     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 31/100 in roubles/dollar) 57.12

3m oil into the 61 dollar handle for WTI and 63 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 105.64 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 0.9384 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1545 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 +0.633%

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 2.844% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.0128% /BOTH VERY DEADLY

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

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

Jittery Markets Rebound From Sharp Losses, Italy Slumps On Anti-Establishment Surge

What started off as a sea of red, with S&P futures tumbling as much as -25 points ahead of the European open, on fears of trade wars and concerns about the surge in Italy’s anti-establishment parties, has managed to rebound notable and stabilize, with most Asian and European markets now green. The dollar was steady and Treasuries gained, while Italian bonds dropped as the nation headed toward a hung parliament

For those who missed it, Italian election results pointed to a hung parliament with anti-establishment 5-Star Movement as the largest single party and the Centre-Right seen as the leading coalition, with far-right junior coalition partner Northern League having possibly outperformed Berlusconi’s Forza Italia. Following the results, Italian League Head Salvini says the party is not available for bizarre coalitions, adding that the centre right coalition has won and can govern, adding that he is open to talks with all parties but rules out a broad coalition. Meanwhile, in Germany, Chancellor Angela Merkel is set to form her fourth government after the SPD voted in favour of another grand coalition. Merkel is set to be sworn in for her fourth term on 14th March.

As BBG notes, the Italian election result and Germany’s move toward a coalition kick off a busy week for macro events. Both the Bank of Japan and European Central Bank will meet to decide on interest rate policy, while China hosts its National People’s Congress. Overshadowing it all, however, will be the next developments on global trade after U.S. President Donald Trump riled markets with his proposed tariffs last week.

There’s a “lot of politics this week with Italy elections and NPC in China, also trade measures,” Frank Benzimra, head of Asia equity strategy at Societe Generale SA in Hong Kong, said. “The return of volatility we have seen since the end of January will probably remain.”

On Monday morning, Europe’s Stoxx 600 was up 0.6%, rebounding after closing in the red in the past four sessions, even as Italian stocks drop after a tremendous showing by anti-establishment groups in Sunday’s election, assuring a hung parliament and further chaos.

Surprisingly, in a day many expected a European bloodbath, almost all Stoxx 600 industry groups rise; carmakers pare an earlier drop of 1.4% to trade little changed; the sector fell at the open after U.S. President Donald Trump upped the ante on import tariffs, threatening taxes on cars from Europe that “freely pour into the U.S.”

Meanwhile, equity gauges from Tokyo to Sydney slumped during the Asian trading session amid worries about the implications of U.S. tariffs for the world’s economy. Italy’s stocks and bonds were the standout losers as Italy’s FTSE MIB Index remained in the red, dropping around 1%, after paring an earlier drop of as much as 2%.


Italian bonds, however, are slower to respond to this morning’s relief rally, and at last check were trading north of 2%.

As noted above, US index futures rebounded sharply from a much weaker open, and have declined only fractionally after a wave of buying was unleashed withe the European open.

Shares in Shanghai bucked regional weakness as China kept its 2018 growth target of around 6.5 percent. Newly added stocks accounted for six out of 10 worst performers on Hang Seng China Enterprises Index, as the big-cap gauge extended losses after its worst month since January 2016. China Gas tumbles as much as 5.2% to lead declines on HSCEI, which slides 1.8%; China Mobile drops 3.3% to head for its weakest finish since April 2014; ZhongAn Online P&C Insurance and Cnooc dropped more than 3%. The stocks were weighed down by declines in the broad market, said Ken Chen, Shanghai-based analyst with KGI Securities.

In macro, the yen initially gained, supported by populist parties’ surge in Italian elections, talk on trade wars and a BOJ looking toward the exit of its stimulus program; it strengthened as much as 0.4% to 105.35 per dollar, nearing a fresh 16-month high, before paring almost gains; Japan’s bonds advance as traders buy back after selling heavily last Friday following BOJ Governor Kuroda’s comments on monetary exit.

Meanwhile, the euro took a hit after Tokyo fix as investors were unclear over Italy’s future political direction, but wasn’t knocked down, managing to rebound strongly above 1.23 handle.  The Euro holds little changed after rising above the 21-DMA, while risk reversals for the pair gain in the front-end, with one-week remaining in negative territory ahead of the ECB policy decision on Thursday.

The pound reversed an earlier drop after stronger-than- forecast U.K. PMIs

The Bloomberg Dollar Spot Index is steady and the Treasury curve bull flattens. Bund futures rose and BTPs slipped from the open, while European equities outside Italy traded in the green. The dollar steadied even as Treasuries advanced.

Elsewhere, China is reportedly seeking high level meetings with US in an effort to diffuse trade tensions and has asked for a list of US demands. Over the weekend, White House officials stated that President Trump plans to apply steel and aluminium tariffs globally and will not exempt allies such as Canada and Europe. In related news, EU’s Juncker said on Friday the EU will respond to US steel action which may involve tariffs on motorcycles, while there were also source reports that EU duties of about USD 3.5bln are to be considered if the US goes ahead with its tariff plan.
US President Trump also tweeted that the US could apply tax to cars from the EU.

In the latest Brexit developments, the EU is reportedly set to uncover differences with the UK in draft Brexit guidelines with the proposals to be vague to force UK to explain what it is seeking, according to reports. Elsewhere, EU negotiators will this week offer a Canada-style trade deal putting pressure on Theresa May’s Brexit ‘red lines’. Further reports suggest, the European Commission is preparing to take a hard line over plans to “roll over” 50 EU free trade agreements during the Brexit transition period, in a threat to British exports.

Looking ahead, highlights include US services PMI, ISM non-mfg PMI, Fed’s Quarles and Evans, as well as earnings from YY and Gibson Energy.

Bulletin headline summary from RanSquawk

  • Italian election results pointed to a hung parliament with anti-establishment 5-Star Movement as the largest single party
  • White House officials stated that President Trump plans to apply steel and aluminium tariffs globally and will not exempt allies such as Canada and Europe
  • Looking ahead, highlights include US services PMI, ISM non-mfg PMI, Fed’s Quarles and Evans

Market Snapshot

  • S&P 500 futures down 0.2% to 2,685.25
  • STOXX Europe 600 up 0.2% to 367.92
  • German 10Y yield fell 2.6 bps to 0.625%
  • MSCI Asia Pacific down 1% to 172.68
  • MSCI Asia Pacific ex Japan down 1.2% to 564.41
  • Nikkei down 0.7% to 21,042.09
  • Topix down 0.8% to 1,694.79
  • Hang Seng Index down 2.3% to 29,886.39
  • Shanghai Composite up 0.07% to 3,256.93
  • Sensex down 0.9% to 33,754.18
  • Australia S&P/ASX 200 down 0.6% to 5,895.03
  • Kospi down 1.1% to 2,375.06
  • Euro up 0.02% to $1.2319
  • Italian 10Y yield rose 2.3 bps to 1.702%
  • Spanish 10Y yield fell 3.2 bps to 1.518%
  • Brent futures up 0.5% to $64.71/bbl
  • U.S. Dollar Index little changed at 89.96

Top Overnight News from BBG

  • Projections based on ballot-counting on Monday morning, following Italy’s vote on Sunday, suggested the two forces with the most gains, the euroskeptic Five Star Movement and the anti- migrant League, could reach a majority in at least one of the houses of the Rome-based parliament should they join forces
  • China stepped up its push to curb financial risk, cutting its budget deficit target for the first time since 2012, to 2.6 percent of GDP from 3 percent, and setting a growth goal of around 6.5 percent that omitted last year’s aim for a faster pace if possible
  • Chinese lawmakers will vote to appoint a new PBOC governor on March 19, according to a National People’s Congress agenda; while current bank regulatory chief Guo Shuqing and Hubei provincial party chief Jiang Chaoliang have both been tipped for the post, President Xi Jinping’s top economic policy adviser and Politburo member Liu He has recently been named by analysts in connection with the top monetary policy job and a vice premier position
  • Trump administration shows scant sign of watering down its plan to impose stiff tariffs on steel and aluminum imports with carve-outs for specific countries, despite opposition from U.S. allies and Republican lawmakers.
  • Tariffs would have “devastating effects on Europe, but also on the U.S. and the rest of the world,” EU Trade Commissioner Cecilia Malmstrom says to Swedish broadcaster SVT
  • German Chancellor Angela Merkel says her government must begin its work “quickly” after Social Democrat vote to join coalition, citing global trade and competitiveness with China as urgent issues

Asian equity markets began a risk-packed week with a downbeat tone as region digested Italian elections, China economic announcements and continued trade war concerns. This ongoing political uncertainty and rise of the Euro sceptics dampened the risk tone with ASX 200 (-0.6%) and Nikkei 225 (-0.7%) negative throughout the session, while Japanese steel names and automakers remained pressured on lingering tariff/trade war concerns. Elsewhere, Hang Seng (-2.3%) underperformed and Shanghai Comp. (+0.1%) bucked the trend as participants contemplated over China’s economic work report in which the official GDP growth target was maintained at 6.5% as widely expected, before disappointing Chinese Caixin Services and Composite PMI data. Finally, 10yr JGBs were higher and reclaimed the 151.00 level, amid a rebound in Tnotes and a flight-to-quality due to the subdued risk tone. Chinese Premier Li delivered the Economic Work Report at the NPC in which he announced that China maintained GDP growth target at about 6.5% this year but dropped reference to ‘higher if possible’. Premier Li further stated that China will keep  prudent monetary policy neutral and maintain proactive fiscal policy, while China will also take further measures to lower tax burden for companies.

Top Asian News

  • China Turns Fiscal Screws While Targeting GDP Growth Around 6.5%
  • China’s Top Tech Firms Heed the Call to Bring Listings Home
  • Go-Jek Explores First IPO of a Billion-Dollar Indonesian Startup
  • HSBC Is Said to Poach Morgan Stanley’s Top Indonesia Dealmaker

Amidst the prospects of ongoing global ‘trade wars’ and the political uncertainty stemming from the Italian elections, European equities saw a pessimistic open following a similar tone in the Asia-Pac session. As of now, major bourses have pared back earlier losses (Eurostoxx 50 +0.3%) with the exception of FTSE MIB (-1.2%) as a clear underperformer. Financials lag with banks amongst the worst performers on the FTSE MIB with BPER Banca (-7.3%), Banco BPM (-6.2%), Ubi Banca (-4.6%) seen at the foot of the index dragged down by the Italian elections. The Berlusconi-controlled Mediaset (-5.4%) are also lower following projections showing the centre-right coalition fronted by the former PM falling short of an absolute majority. Following US President Trump’s latest threat to hike tariffs in EU auto imports, German auto names are underperforming with DAX 30 heavyweights BMW (-1.1%) and Daimler (-0.4%) seen lower.

Top European News

  • BMW May Have Most to Lose in Autos Trade War, Evercore Says
  • U.K. Services Prop Up Economy on Better-Than-Forecast Growth
  • Euro-Area Economy Looked a Little Less Buoyant in February
  • May Secures Temporary Cease-Fire in U.K. Tory-Brexit Infighting
  • Amid China M&A Drive, EU Rushes for Investment-Screening Deal

In FX, the DXY has given up 90.000 status after last week’s roller-coaster ride when the index almost recovered to 91.000 before recoiling on US President Trump’s plans to slap import tariffs on steel and aluminium that sparked another wave of global trade war and protectionism jitters. However, a recovery in the EUR has moved EUR/USD back above 1.2300 and moved the DXY back into negative territory for the session. Meanwhile, Eur/Jpy initially breached strong technical support at 129.50 before reclaiming 130.00 amid the recent EUR strength. Elsewhere, the Nzd, Aud and Cad are G10 underperformers after Chinese PMI misses and a general risk-off tone on the Trump proposals and pledges of retaliation, with the Kiwi extending gains above 0.7200 vs the Greenback, Aud/Usd trading around 0.7750 and Usd/Cad just off fresh 2018 highs but back below 1.2900 and just shy of key resistance in the 1.2915-25 area. The Jpy and Chf are both benefiting from their safe-haven appeal, with the former around 105.50 vs the Usd (strong barriers still reported at 105.00) and the latter within a 0.9750-85 range vs its US counterpart. Cable at session highs above 1.3800 and Eur/Gbp still above 0.8900 between 0.8905-50 with Sterling continuing to be hampered by Brexit uncertainty amidst more reports about the EU’s hard-line stance on transition terms and conditions.

In commodities, WTI and Brent crude futures traded higher despite the firmer USD as Libyan supply disruptions provide some reprieve after Libya’s Sharara oil field (largest in the nation) has halted pumping crude amid domestic protests. However, it was then later reported that production has resumed at the oil field. In terms of other energy newsflow, the IEA have upgraded their US oil output growth estimates by over 2mln bpd through 2023. Focus ahead will be on any comments from the meeting between OPEC and US shale producers as both sides look to address the ongoing global oil glut. In metals markets, gold prices remain modestly supported by the general risk tone with gains capped by the firmer USD. Elsewhere, Chinese steel futures were seen lower for a second consecutive session as demand in the region remains soft and despite China announcing that they will reduce around 30mln tonnes of steel capacity this year. Focus going forward will be on how Trump views/responds to threats made by the EU and Canada over counter-measures to last week’s tariff announcements.

Politics should dominate the start to the week for markets. In China the National People’s Congress is due to begin in Beijing, with Premier Li due to present a draft of his work plan for 2018 (continues to March 20th). Away from politics, the main data releases on Monday will be the final February services and composite PMIs around the globe, along with Euro area retail sales for January, the Sentix investor confidence reading for March and the February ISM non-manufacturing in the US. Elsewhere BOJ Deputy Governor nominee’s confirmation hearing will begin, while the Fed’s Quarles is also due to speak. It’s worth also highlighting that EU Council President Donald Tusk may circulate draft negotiating guidelines about the future relationship between the EU and UK on Monday.

US Event Calendar

  • 9:45am: Markit US Services PMI, est. 55.9, prior 55.9; Composite PMI, prior 55.9
  • 10am: ISM Non-Manf. Composite, est. 59, prior 59.9
  • 1:15pm: Fed’s Quarles Speaks on Foreign Bank Regulation

DB’s Jim Reid concludes the overnight wrap

What’s the toughest business out there? After this weekend it’s definitely “snowbiz”. After a deluge of snow late Friday afternoon we made a big family snowman. By Saturday night after an incredibly quick melt it was as good as gone. I now know how mayflies feel.

Through history snowmen have lived as precarious as an existence as Italian Governments and as we bring news of yesterday’s election it’s worth remembering that they have seen around 90 governments since the start of the twentieth century. Counting is still underway, but initial results suggest there is no clear majority with a hung parliament very likely, while the Five Star Movement will likely be the most popular single party with c32% share of
the votes (up 6ppt vs. 2013 elections), as per RaiNews24, and better than final opinions polls suggested. RaiNews24 further notes that the Berlusconi led center-right coalition could achieve 35.5% of votes but still short of the 40% needed to avoid a hung parliament. However the League (c.16%) look set to beat Forza Italia (c.14%) which makes the centre-right look more anti immigration and euro sceptic. The center-left group led by Renzi could achieve c.23% of the votes. If the projections are true, it could lead to months of uncertainty until a coalition government could be formed. DB’s Mark Wall noted that an important lesson from the various political events over the last couple of years in the euro area is that unless there is a clear threat to euro area membership, there is little lasting impact on market sentiment. Further, it appeared all Euro sceptic parties had softened their stance on euro exit before the election. As long as the market remains convinced of this, he believes calmness should prevail. However for us there’s no doubting that populist parties have done better than expected and Italy is going to struggle to get a reforming agenda after these results.

In contrast, in Germany the political stalemate has ended after the SPD voted in favour (66% to 34%) of forming a new coalition government with Ms Merkel’s bloc, paving the way for her to be re-inaugurated as Chancellor by mid-March. Mark believes the appearance of a post-Schaeuble pro-European policy stance by Germany is a buffer against the potential risks from Italy. This morning, the Euro initially strengthened on Germany’s developments but pared back gains to be marginally lower following news from Italy.

In Asia, markets are broadly lower with the Nikkei (-0.71%), Kospi (-0.92%), Hang Seng (-1.26%) and China’s CSI 300 (-0.15%) all down as we type, while the UST 10y yield is down c2.5bp. Datawise, China’s February Caixin composite PMI (53.3 vs. 53.7 previous) and Japan’s Nikkei composite PMI (52.2 vs. 52.8 previous) were both softer than the prior month’s reading. Elsewhere, China has set an economic growth target of “around 6.5%” for 2018 but did not include the comment of “higher if possible in practice” as it did in 2017. Notably, the c6.5% target is in line with DB’s expectations.

Looking forward it’s a big week ahead macro wise with the back end where most of the action will come. On Friday, 5 weeks on from the average hourly earnings shock that caused the vol quake, we’ll see the latest US payroll report  with all focus on this month’s wages number. The consensus is for another strong +0.3% mom number in February however base effects mean that the YoY rate would hold at +2.8% (in line with DB) if that is the case.

Before that we have the ECB meeting on Thursday and the BoJ on Friday. No change in policy is expected at either. For the ECB though, our economists expect the ECB to redefine the QE reaction function, reducing the likelihood that the ECB responds to economic and financial shocks with QE. The current forward guidance links the potential for an extension or expansion of QE to shocks to the economy and/or financial conditions. Our team expect the ECB to say that it will respond to shocks with the monetary policy stance more generally rather than QE specifically. By redefining the reaction function, this will set the ground for a June announcement that net asset purchases will end in December. The BoJ meeting should be a less exciting affair with the status quo maintained. Perhaps of most interest will be whether or not policy board member Goushi Kataoka officially puts forward his proposal for another easing. After we went to print on Friday Mr Kuroda caused a little bit of a stir though by suggesting that “Of course we will be considering and debating an exit [around fiscal year 2019].” This ends in March 2020 and is someway off but it’s a further sign that the bias for global QE continues to be for it to be wound down (for now).

Also this week China’s NPC starts today and continues through to March 20th with headlines already coming out as we discussed above. Our economists have also published a preview of the event which you can find here. For the rest of the week ahead see the day by day guide at the end. Watch out today for the final February services and composite PMIs released around the globe. The slowing Euro PMI manufacturing numbers of late have been a big market driver recently Of more unpredictable timing will be the next round in the latest trade rhetorics around the world after Thursday’s steel/aluminium tariffs announcement from the US President. Friday initially saw a big risk off/flight to quality when Mr Trump tweeted that “trade wars are good, and easy to win,”. EC President Juncker said Europe was prepared to respond forcefully to the developments by targeting imports of Harley-Davidson, Levi Strauss, and bourbon whiskey from the US.

Mr Trump didn’t let this topic stay quiet and tweeted on Saturday that “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.”

As the war of words was escalating, the European session was very weak on Friday before a US rally restored some stability into the market. The Stoxx 600 (-2.09%) and DAX (-2.27%) both fell the most since early February, while the FTSE was the relative outperformer (-1.47%). In the US, the S&P initially traded 1.1% down but closed 0.51% higher, in part as tech stocks rallied and investors seemed to have toned down the potential for a large scale trade war.  Elsewhere, the Nadaq was up 1.08% while the Dow and the VIX (19.59) was down 0.29% and 12.8% respectively.

Over in government bonds, UST 10y yields initially traded 1.6bp lower but weakened throughout the day to close 5.6bp higher to 2.865%, effectively reversing Thursday’s gains. Some suggests the weakness was amplified due to rate-lock selling ahead of this week’s large IG credit issuances but the swings said much about confusion as to whether protectionism is likely to cause riskoff (lower yields) or higher global prices (higher yields). Elsewhere, core European 10y bond yields were little changed and rose c1bp (Bunds and Gilts +0.7bp; OAT +1.1bp).

Away from the markets and back onto President Trump’s tariff proposals. DB’s Brett Ryan believes the tariffs would  have a negligible impact on the US trade deficit as imports of steel and aluminum account for 2% of all goods imports. On inflation, he believes the impact should be limited as cost increases are unlikely to be fully passed on to end customers. Overall, he believes it is the second order impacts of retaliatory measures undertaken by trading partners  that could come with more substantial costs for the US and its trading partners further down the line. Our Chinese economists suggests the actual impact of the trade measures on China will also be relatively small – China exports only small shares of US steel (2%) and aluminum imports (11%). Further, with a senior advisor to President Xi (Liu He) visiting the US this week, they believe this indicates China is wanting to negotiate rather than retaliate (Link). Notably, this is consistent with comments by China’s Vice Foreign Minister Zhang over the weekend where he noted “China does not want to fight a trade war with the US, but we absolutely will not sit by and watch as China’s interest are damaged”.

Over in the UK, on Friday the UK PM May reiterated that the UK intends to leave the Single market and Customs unions as well as impose an end to freedom of movement. However, DB’s Oliver Harvey believes there were shifts in tone, particularly to the importance of trade and services. Overall, he believes the EU will welcome the level of detail in her speech, but he is sceptical whether it can form the basis of negotiations on a future trade deal. Much will depend on the response of the EU leadership in the coming days. Refer to his note for more details.

Finally on credit, Michal in my team has just published the monthly “IG Strategy: Issuance and Fund Flows” which provides commentary and data charts on the IG corporate bond market size, issuance and fund flows. This  comprehensive report covers EUR, GBP and USD markets, including both DM and EM. It also puts both issuance and fund flows in the IG space into a broader global context. You can download the full report here.

We wrap up with other data releases from Friday. In the US, the final reading for the February Uni. of Michigan’s consumer sentiment was revised up by 0.2pts to 99.7. In the details, both 1 and 5 year-ahead inflation expectations were unrevised at 2.7% and 2.5% respectively. Back in Europe, the Euro area’s January PPI was in line at 0.4% mom, but prior revisions means the annual rate was softer than expectations at 1.5% yoy (vs. 1.6%). The final reading for Italy’s 4Q GDP was unrevised at 0.3% qoq and 1.6% yoy. Elsewhere, Germany’s January retail sales was below market at -0.7% mom and 2.3% yoy (vs. 3% expected), although the prior annual reading was revised up by 1.7ppt.

Politics should dominate the start to the week for markets. In China the National People’s Congress is due to begin in Beijing, with Premier Li due to present a draft of his work plan for 2018 (continues to March 20th). Away from politics, the main data releases on Monday will be the final February services and composite PMIs around the globe, along with Euro area retail sales for January, the Sentix investor confidence reading for March and the February ISM non-manufacturing in the US. Elsewhere BOJ Deputy Governor nominee’s confirmation hearing will begin, while the Fed’s Quarles is also due to speak. It’s worth also highlighting that EU Council President Donald Tusk may circulate draft negotiating guidelines about the future relationship between the EU and UK on Monday.

end

3. ASIAN AFFAIRS

i)MONDAY MORNING/LATE SUNDAY NIGHT: Shanghai closed DOWN 2.39 POINTS OR 0.07% /Hang Sang CLOSED DOWN 697.06 POINTS OR2.28% / The Nikkei closed DOWN 139.55 POINTS OR 0.53%/Australia’s all ordinaires CLOSED DOWN 0.53%/Chinese yuan (ONSHORE) closed UP at 6.3400/Oil UP to 61.35 dollars per barrel for WTI and 64.44 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED  .   ONSHORE YUAN CLOSED DOWN AT 6.3400 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3395 /ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR . CHINA IS NOT  HAPPY TODAY (STRONGER CURRENCY BUT TERRIBLE CHINESE MARKETS/ ) 

3 a NORTH KOREA/USA

/NORTH KOREA

end
 

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA

China confirms 2018 slowdown

(courtesy zerohedge)

China Confirms Further Economic Slowdown: Highlights From 2018 Government Work Report

In the latest confirmation that as part of its grand deleveraging campaign, China’s economy is set to slow further in the current year, Beijing has set a 2018 growth target of around 6.5%, omitting an intention to hit “a faster pace if possible”, as the world’s largest nation continues its push to ensure financial stability. While the target of 6.5% is the same as last year, Bloomberg notes that the statement excludes an objective for output growth to be “higher if possible in practice” as it did in 2017.

The omission from the GDP growth target of ‘higher if possible’ and the new lower budget deficit target suggest slower growth and a fiscal drag,” said Eurasia’s Callum Henderson. “This makes sense for China in the context of the new focus on financial de-risking, poverty alleviation and environment clean-up, but is less good news at the margin for those economies that have high export exposure to China.”

China’s newly downgraded growth target was released Monday ahead of Premier Li Keqiang’s report to the National People’s Congress gathering in Beijing.

While China’s GDP surpassed 2017’s target with 6.9% growth, the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration. To be sure President – or rather Emperor – Xi Jinping has made it clear he will accept slower growth in his push to curb pollution, poverty and debt risk at a time when the world’s second-largest economy is on a long-term growth slowdown. As a result, numerical GDP targets have been de-emphasized in favor of higher-quality expansion since last year, according to Bloomberg.

The government also signaled its intent to continue efforts to slow debt growth, and set the budget deficit target markedly lower, at 2.6% of GDP, down from 3% in the past two years; news of the proposed reduction in borrowing sent 10-year sovereign bonds futures higher last week after Bloomberg reported the plan to reduce the budget deficit target.

Commenting on the proposal, Bloomberg’s Asia economist Tom Orlik said that “Li’s plan for the year is consistent with a moderate slowdown in real growth,” noting that “there were signals of significantly reduced fiscal support for growth, and lower ambitions on capacity closures in the industrial sector.

Furthermore, authorities reiterated their prior language saying prudent monetary policy will remain neutral this year and that they’ll ensure liquidity at a reasonable and stable level. The report said broad M2 money-supply growth would remain moderate, without including a numerical target as had been previously the case. M2 growth slowed to a record low 8.2 percent in December, down from more than 11 percent a year earlier. A separate report from the National Development and Reform Commission said M2 growth would remain roughly in line with last year’s real growth rates.

“We will improve the transmission mechanism of monetary policy, make better use of differentiated reserve ratio and credit policies, and encourage more funds to flow toward small and micro businesses, agriculture, rural areas, and rural residents, and poor areas, and to better serve the real economy,” state media reported, citing the work report. The report also said that an increase in the  thresholds for personal income taxes was planned.

Below courtesy of Bloomberg are the other key highlights from China’s government work report released today in Beijing.

Import tariff cut (or did Trump win the trade war already?):

  • China to lower import tariffs for vehicles and some consumer goods

Internet/Telecom:

  • China to cancel domestic Internet data roaming fees in 2018
  • China to cut rates for mobile Internet services by at least 30% this year
  • China to expand free wifi spots in public areas
  • China to lower broadband charges for families and enterprises

Opening up:

  • China to expand opening to foreign investment in telecom, new energy vehicle, healthcare and education

Tax and wages:

  • China to cut taxes for enterprises, individuals by 800b yuan this year
  • China to lift thresholds for for levying personal income taxes, without elaborating
  • China to adjust level of minimum wages reasonably this year

Property:

  • Govt reiterates that housing is not for speculation and aims to develop housing rental market
  • China to steadily push forward legislation of property tax, without elaborating

Capacity Cut:

  • China to cut steel capacity by 30m tons this year; to remove 150m coal capacity

Financial regulations:

  • China’s overall economic, financial risks controllable
  • China to boost coordination among financial regulators
  • China totally able to prevent systemic risks
  • China to improve regulation for shadow banking, Internet financing

Source: Bloomberg

 end

4. EUROPEAN AFFAIRS

The real reason for the closing of the Latvian bank and it is not the dubious money laundering charge.  The reason is that after the collapse of Cyprus in 2010, Russian oligarchs needed another country to park its European/USA funds and in 2014 they found one in new EU member Latvia.  The USA’s simple motive was to hurt Russia where it hurts the most ..in the pocketbook

(courtesy William Enghahl/Neo.org)

8. EMERGING MARKET

India

Quite a scam:  the crooks used gold and diamonds to bribe a banker in this 2 billion dollar fraud at PNB.  All of the crooks escaped India and are probably in Hong kong

(courtesy zerohedge)

Gold, Diamonds Used To Bribe Banker In Sprawling $2 Billion Indian Fraud Scandal

It has been more than two weeks since Punjab National Bank – one of India’s largest state-owned financial institutions – informed the public about a nearly $2 billion lending fraud allegedly masterminded by Nirav Modi, a famous celebrity jeweler and one of India’s richest men.  And still, investigators are just beginning to piece together the exact mechanics that allowed a celebrity jeweler, working with a handful of rogue bank employees at PNB’s Mumbai branch (the bank is based in New Delhi) to pull off the largest financial fraud in modern Indian history.

In their latest update, federal investigators told Reuters and a host of other media organizations that Modi and his uncle Mehul Choksi – who played an integral role in the fraud – successfully bribed bank employee with gold coins and diamonds to help coax them to look the other way when signing off on fraudulent letters vouching for the shell companies receiving the loans.

Authorities have apprehended a retired PNB manager named Gokulnath Shetty, pictured below, who was essentially Modi and Choksi’s inside man at the bank.

Shetty

Last week, we pointed out a disturbing trend whereby large multinational financial institutions were backing away from Indian banks, setting the stage for a painful credit crunch that could potentially destabilize the Indian economy.

The Central Bureau of Investigation (CBI), which has arrested 14 people in the case, on Saturday for the first time said bribes were paid to at least one Punjab National Bank (PNB)official by Modi.

The agency told the court that Yashwant Joshi, who worked as a manager in the forex department of the Mumbai branch that is at the center of the fraud, admitted to having received two gold coins weighing 60 grams and a pair of gold and diamond earrings from Modi.

The articles have been recovered from Joshi’s house in the presence of independent witnesses, the CBI said.

Police have also arrested two low level employees from the Brady House branch of PNB for helping ferry the fraudulent guarantee letters past the bank’s internal controls. The two men allegedly helped produce some of the letters of understanding, then recorded them in the bank’s internal system, effectively leaving its stewards in the dark. As any expert on India’s state-run banks would tell you, the fact that most Indian banks haven’t integrated their internal controls with the Society for Woldwide Interbank Telecommunication (SWIFT) leaves them incredibly vulnerable to fraud, particularly when bank employees who have nearly unfettered access decide to take advantage of their position.

In its latest story, Reuters provided a detailed graphic explaining exactly how Modi and his crew managed to secure the fraudulent loans. The fake letters of undertaking that were so vital to the scheme allowed shell companies controlled by the fraudsters to receive loans mostly from foreign branches of Indian banks.

Gold

Over the weekend, an Indian federal judge issued a warrant for Choksi’s arrest. Both Choksi and his nephew Modi have fled the country, and are believed to be in Hong Kong. Prosecutors are also zeroing in on Modi, who is believed to be the ringleader of the whole scheme.

“Modi appears to be the prima donna in the whole saga of the fraud perpetrated on the PNB,” the directorate said in a filing to the court seen by Reuters.

But perhaps even more embarrassing – and ultimately more problematic – than the authorities’ inability to apprehend the ringleaders of the fraud (though they have arrested a total of 14 people over their suspected involvement in aiding or abetting it) is the fact that nothing is being done to strengthen oversight of Indian banks.

Without that, the damage to the credibility to the state-run banking system may never be repaired – and if that happens, it’s the small business owners of India who will suffer as credit conditions are rapidly tightened.

 end

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

Euro/USA 1.2299 down .0015/ 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 IN THE GREEN EXCEPT ITALY 

USA/JAPAN YEN 105.64 DOWN  0.068 (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/DEADLY UNWINDING OF YEN CARRY TRADE

GBP/USA 1.3815 UP .0024(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 1.2943 UP .0053 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro FELL by 15 basis points, trading now ABOVE the important 1.08 level RISING to 1.2214; / Last night Shanghai composite CLOSED DOWN 2.89  OR 0.07% /   Hang Sang CLOSED DOWN 697.06 POINTS OR 2.28%  /AUSTRALIA CLOSED DOWN 0.53% / EUROPEAN BOURSES  IN THE GREEN EXCEPT ITALY  

The NIKKEI: this MONDAY morning CLOSED DOWN 139.55 POINTS OR 0.66%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 697,06 POINTS OR 2/28%  / SHANGHAI CLOSED DOWN 2.39 OR 0.07%   /

Australia BOURSE CLOSED DOWN 0.53% /

Nikkei (Japan)CLOSED DOWN 542.83 POINTS OR 2.53%

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1323.50

silver:$16.50

Early MONDAY morning USA 10 year bond yield: 2.844% !!! DOWN 2  IN POINTS from FRIDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ VERY DEADLY

The 30 yr bond yield 3.128 DOWN 2 IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/DEADLY

USA dollar index early MONDAY morning: 90.08 UP 15  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.952% DOWN 4  in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.0.043% DOWN 2    in basis points yield from FRIDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.498% DOWN 5  IN basis point yield from FRIDAY/

ITALIAN 10 YR BOND YIELD: 2.003 UP 3 POINTS in basis point yield from FRIDAY/

the Italian 10 yr bond yield is trading 51 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS TO +.643%   IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.2324 UP .0010 (Euro UP 10 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 105.99 UP 0.581 Yen UP 289 basis points/

Great Britain/USA 1.3852 UP .0061( POUND UP 61 BASIS POINTS)

USA/Canada 1.2991 UP  .01099 Canadian dollar DOWN 110 Basis points AS OIL ROSE TO $62.70

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This afternoon, the Euro was UP 10 to trade at 1.2324

The Yen FELL to 105.99 for a LOSS of 29 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 61 basis points, trading at 1.3852/

The Canadian dollar FELL by 110 basis points to 1.2991/ WITH WTI OIL RISING TO : $62.70

The USA/Yuan closed AT 6.3496
the 10 yr Japanese bond yield closed at +.043%  DOWN 2  BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 2 IN basis points from FRIDAY at 2.879% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.154  UP 2   in basis points on the day /

THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS

Your closing USA dollar index, 90.01 UP 7 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 MONDAY: 1:00 PM EST

London: CLOSED UP 46.08 POINTS OR 0.65%
German Dax :CLOSED UP 177.16 POINTS OR 1.49%
Paris Cac CLOSED UP 30.65 POINTS OR 0.63%
Spain IBEX CLOSED UP 59.70 POINTS OR 0.63%

Italian MIB: CLOSED  DOWN 92.73 POINTS OR 0.42%

The Dow closed UP 336.70 POINTS OR 0.37%

NASDAQ WAS up 72.94 Points OR 1.00% 4.00 PM EST (short squeeze)

WTI Oil price; 62.70 1:00 pm;

Brent Oil: 65.59 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 56.49 DOWN 33/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 33 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.643% 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:$62.62

BRENT: $65.533

USA 10 YR BOND YIELD: 2.88%   THIS RAPID ASSENT IN YIELD IS VERY DANGEROUS/DERIVATIVES START TO BLOW UP/ 

USA 30 YR BOND YIELD: 3.155%/BROKE GUNDLACH’S KEY 3.00% AGAIN WHERE ALL VALUATIONS ON STOCKS BLOW UP/

EURO/USA DOLLAR CROSS: 1.2335 UP.0021  (UP 21 BASIS POINTS)

USA/JAPANESE YEN:106.17 UP 0.463/ YEN DOWN 46 BASIS POINTS/ very dangerous as yen carry traders are getting killed/yen continues to rise despite the NYSE rising.

USA DOLLAR INDEX: 90.02 UP 9 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3843: UP 0.0053  (FROM LAST NIGHT UP 53 POINTS)

Canadian dollar: 1.2995 down 124 BASIS pts

German 10 yr bond yield at 5 pm: +0.643%


VOLATILITY INDEX:  18.73  CLOSED  down   0.86

LIBOR 3 MONTH DURATION: 2.025%  

END

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

TRADING IN GRAPH FORM FOR THE DAY

Tariff Tantrum Turns To Buying-Panic As Stocks Shrug Off Global Trade War Threat

We’re back to the old new normal…

Only Trannies are still red post-Trump-Trade-War (as Boeing’s gains sent The Dow back into the green today along with the rest of the majors)…

  • 3/1 1230ET *TRUMP SAYS HE WILL IMPOSE TARIFFS ON STEEL AND ALUMINUM IMPORTS
  • 3/2 0600ET *TRUMP SAYS `TRADE WARS ARE GOOD, AND EASY TO WIN’

Futures show where the big ramps hit…

Many market observers claimed that Speaker Ryan’s comments were the driver of today’s move…

  • 3/5 1136ET *RYAN URGES WHITE HOUSE NOT TO ADVANCE ON TARIFF PLAN
  • 3/5 1221ET *TRUMP SAYS NOT BACKING DOWN WHEN ASKED ABOUT RYAN COMMENTS

They were not the momentum igniter…

FANG stocks ripped over 7% off Friday’s lows…

As a massive short-squeeze sends “Most Shorted” stocks back to unchanged from last week’s selling ledge…

S&P bounced off its 100DMA…

And The Dow stalled at 50% retrace of the drop…

Stocks were pretty much on their own today… While The Dow tested up 400 points, Bonds were up 1-2bps, and the dollar inched higher….

Treasury yields rose today during the US session, but rallied modestly in the afternoon to end just barely higher…

NOTE the long-end of the yield curve stalled at Powell’s ledge from last week..

The Dollar Index limped higher unenthusiastically…

Gold and Silver leaked lower (on dollar gains) but crude ripped higher on chatter about another big draw at Cushing…

Data-provider Genscape Inc. was said to report a drop in Cushing, Oklahoma stockpiles last week, according to two people with knowledge of the report. Inventories at the key pipeline hub are already at the lowest level since 2014.

But gold remains notably lower vol on a normalized basis…

Cryptocurrencies were chaotic today with Ripple pumping-and-dumping…

As Bitcoin surged above $11,500…

Finally, we note that Gold remains the leader since Trump unveiled his tariffs… but stocks tried valiantly…

END
ISM services slip but PMI rises a bit.  However the report also shows soaring costinflaiton
(courtesy zerohedge)

ISM Services Dips But PMI Confirms Soaring Cost Inflation

On the heels of US Manufacturing’s stagflationary signals (albeit mixed ISM/PMI headline prints), the US Services sector was also mixed (ISM dipped as PMI spiked) but the latter confirmed signs of significant price inflation (largest monthly rise in aggregate prices since September 2014).

As a reminder, Manufacturing was extremely exuberant according to ISM and disappointing according to Markit’s PMI.

In the case of the Services economy, Markit’s PMI jumped to its highest level since Nov 2015 but ISM dipped from record highs in January (but was slightly better than expected)…

ISM Breakdown

  • Business activity rose to 62.8 vs 59.8 prior month
  • New orders rose to 64.8 vs 62.7
  • Employment fell to 55.0 vs 61.6
  • Supplier deliveries unchanged at 55.5 vs 55.5
  • Inventory change rose to 53.5 vs 49.0
  • Prices paid fell to 61.0 vs 61.9
  • Backlog of orders rose to 56.0 vs 51
  • New export orders rose to 59.5 vs 58.0
  • Imports fell to 50.0 vs 54.0

While ISM shows a modest drop in prices paid, Markit suggests that on the prices front, cost burdens faced by service providers continued to rise in February. The rate of input price inflation accelerated to the fastest since June 2015. Where higher input costs were reported, panellists commonly linked this to higher fuel and raw material prices. Meanwhile, amid larger cost burdens and greater client demand, average charges also rose further as firms protected margins. Moreover, the pace of inflation quickened to the sharpest for five months.

And ISM survey respondents were anxious:

Lumber-related costs continue to increase as supply is also starting to become a problem. The market volatility of construction materials and the short supply of construction labor have added difficulty to long-term planning.”

“Slight increase in activity; beginning to see some higher cost for goods and services.”

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“A surge in service sector activity comes as welcome news after a disappointing couple of months, especially is it was accompanied by further robust manufacturing growth in February.

“With growth of new orders across the two sectors collectively growing at the fastest rate for three years, March could also prove to be a good month for business activity, rounding off a solid opening quarter or the year.

Capacity is clearly being strained by the upturn in demand, as indicated by the largest build-up of uncompleted orders for nearly three years and reports of increasingly stretched supply chains.

“Encouragingly, business optimism about the year ahead has risen to one of the highest seen over the past three years, suggesting firms will remain in expansion mode to take advantage of the upturn. Hiring and business investment should therefore continue to rise in coming months.

“The concern is that prices continue to rise as demand outstrips supply. Average prices charged for goods and services showed the largest monthly rise since September 2014, which is likely to feed through to higher consumer price inflation.”

In summary, so far, the two PMI surveys point to the economy expanding at a steady 2.5% annualised rate in the first quarter.

this is going to cost considerable money: a strong Nor’Easter pummels the east coast.
(courtesy zerohedge)

7 Dead After “Monster Nor’easter” Pummels East Coast, Leaving Floods, Outages

At least seven people were dead after a “monster nor’easter” – officially called Winter Storm Riley – slammed the northeastern United States on Saturday, leaving a trail of flooded streets, power outages and brutal winds.

Spotted by @NOAASatellites satellite: today’s is seen spinning off the Atlantic Northeast. This storm is slamming the East Coast with intense winds, snow, rain and hail. More: https://www.star.nesdis.noaa.gov/GOES/GOES16_sector_band.php?sector=ne&band=GEOCOLOR&length=24 

A 6-year-old boy died in Virginia after a tree fell on his family’s home, officials said. Others include an 11-year-old boy hit by a falling tree in New York state, a 57-year-old man in Upper Merion, Pennsylvania, hit by a tree while in his car and a 77-year-old woman struck by a branch outside her home in Baltimore.

The Tewksbury Police posted this photo to their Twitter account of a tree severely damaging a jeep, March 2

The storm strengthened rapidly Friday, undergoing what’s known as bombogenesis or “bombing out,” when a low-pressure system drops 24 millibars in 24 hours. It was the second “bomb cyclone,” to hit the region after a similar storm hit the northeast back in early January. home in Baltimore.

Rubble rests on top of a car after a partially burnt building collapsed due to strong winds in Northeast Washington

According to Reutersalmost 2.4 million homes and businesses had no power in the Northeast and Midwest early on Saturday. Some utility companies warned customers that power might not be restored until later in the day or Sunday.

Wind knocks down power poles onto Arsenal Street in Watertown, Mass., March 2

New York City saw a mix of rain, snow, sleet and winds that wrapped up by evening. Over 4 inches of rain fell in eastern Long Island and parts of eastern Massachusetts.

Lighthouse Rd. begins to flood during a large coastal storm March 2, 2018 in Scituate, Mass

A tractor-trailer overturned on the Verrazano-Narrows Bridge in New York, photos showed.

Eyewitness records video of overturned truck on the Verrazano-Narrows Bridge: http://7ny.tv/2F527Mf  (via jiggytimejay/Instagram)

In Boston and nearby coastal communities, storm surges and high tides sent seawater in the streets, the second floods there this year.

A National Guard vehicle brings emergency workers to residents trapped by flood waters due to a strong coastal storm on March 2, 2018 in Quincy, Massachusetts

Wind gusts of more than 90 miles per hour downed trees and power lines a day earlier. The highest wind gust was 93 mph in Barnstable, Massachuetts, while an 83 mph gust was measured in both East Falmouth, Massachusetts, and Little Compton, Rhode Island. Hurricane-force wind gusts will continue through coastal Massachusetts and Rhode Island Friday night.

Virginia Governor Ralph Northam and Maryland Governor Larry Hogan declared a states of emergency.  “Please use common sense, heed all warnings, and stay inside and off the roads if possible,” Hogan said in a statement.

Heavy snow fell across much of the interior northeast Friday afternoon, including in Syracuse and Albany, New York; New Jersey and eastern Pennsylvania.

Very snowy outside my parent’s house in Pennsylvania 🌨

Sussex County, New Jersey, has already seen 10 inches of snow by the afternoon. According to AccuWeather, the storm dumped as much as 18 inches (46 cm) of snow on parts of New York state and Pennsylvania. In Pennsylvania, a school bus was toppled over by high winds. No students were on board, and the driver’s injuries were minor.

Authorities lift a toppled school bus, blown over by high winds from a nor’easter. There were no students on board, but the driver suffered minor injuries. http://abcn.ws/2F6Ku2F 

Amtrak temporarily suspended service along the Northeast corridor until Saturday due to what it termed were “hazardous conditions for our customers and crews.” They announced around midnight Saturday that modified service would resume between Washington, D.C. and New York City at 6:20 a.m. and between New York City and Boston at 8:40 a.m.

Over 4,000 flights were canceled in the United States Friday, according to FlightAware. Nearly half of all scheduled flights at New York City’s LaGuardia Airport have been canceled today, the airport said. LaGuardia, Logan International in Boston and Newark Liberty International in New Jersey were the top-3 airports for cancelled flights on Friday.

One flight landing at Washington’s Dulles International Airport came in through turbulence so rough that most passengers became sick and the pilots were on the verge of becoming ill, the Federal Aviation Administration said.

And while the snow and rain will taper off as skies clear, but winds gusts of up to 50 miles per hour (80 kph) will persist through the day across the region, the National Weather Service said.

END

The real story on the Fed unwind.  Wolf Richter has it right:  the Fed is unwinding QE perfectly to their plan

(courtesy Wolf Richter/Wolfstreet)

Fed’s QE Unwind Marches Forward Relentlessly

Authored by Wolf Richter via WolfStreet.com,

During the sell-off, it ignored the whiners on Wall Street.

The fifth month of the QE-Unwind came to a completion with the release this afternoon of the Fed’s balance sheet for the week ending February 28. The QE-Unwind is progressing like clockwork. Even during the sell-off in early February, the QE-Unwind never missed a beat.

During QE, the Fed acquired Treasury securities and mortgage-backed securities (MBS) guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. During the QE-Unwind, the Fed is shedding those securities. According to its plan, announced last September, the Fed would reduce its holdings of Treasuries and MBS by no more than:

  • $10 billion a month in Q3 2017.
  • $20 billion a month in Q1 2018
  • $30 billion a month in Q2 2018
  • $40 billion a month in Q3 2018
  • $50 billion a month in Q4 2018 and continue at this pace.

This would shrink the balance of Treasuries and MBS by up to $420 billion in 2018, by up to an additional $600 billion in 2019 and every year going forward until the Fed decides that the balance sheet has been “normalized” enough — or until something big breaks.

For February, the plan called for shedding up to $20 billion in securities: $12 billion in Treasuries and $8 billion in MBS.

The easy part first: Treasury Securities

On its January 31 balance sheet, the Fed had $2,436 billion of Treasuries; on today’s balance sheet, $2,424 billion: a $12 billion drop for February. On target! In total, since the beginning of the QE Unwind, the balance of Treasuries has dropped by $42 billion, to hit the lowest level since August 6, 2014:

In the chart above, the stair-step down movement is a result of the mechanics with which the Fed sheds securities. It does not sell Treasuries but allows them to “roll off” when they mature: mid-month and at the end of the month. On February 15, $16.6 billion in Treasuries on the Fed’s balance sheet matured; on February 28, $32.1 billion matured.

In total, $48.7 billion in Treasuries matured. The Fed replaced $36.7 billion of them with new Treasuries via the special arrangement it has with the Treasury Department. This cuts out the middlemen on Wall Street. So these $36.7 billion in securities were “rolled over.”

But the Fed did not replace the remaining $12 billion of Treasuries that matured. Instead, the Treasury Department redeemed them at face value (paid the Fed for them). In the jargon, these securities were allowed to “roll off.” The blue arrow in the chart above shows this February move.

MBS are a jagged animal.

For February, the plan calls for allowing $8 billion in MBS to roll off. So how did it go?

Residential MBS differ from regular bonds. The MBS holder receives principal payments continuously as the underlying mortgages are paid down or paid off, and the principal shrinks until the maturity date, when the remainder is paid off. To keep the MBS balance steady, the New York Fed’s Open Market Operations (OMO) continually buys MBS. Settlement occurs two to three months later.

This timing difference causes large weekly fluctuations in MBS on the Fed’s balance sheet. It also delays the day when MBS that have been allowed to “roll off” actually disappear from the balance sheet [I explained this in greater detail a month ago here].

As a result, to determine if the QE Unwind is taking place with MBS, we’re looking for lower highs and lower lows on a very jagged line. Also today’s movements reflect MBS that rolled off two to three months ago, so November and December, when about $4 billion in MBS were supposed to roll off per month.

The chart below shows that jagged line. Note the lower highs and lower lows over the past few months. Given the delay of two to three months, the first roll-offs would have shown up in early December at the earliest. At the low in early November, the Fed held $1,770.1 billion in MBS. On today’s balance sheet, also the low point in the chart, the Fed shows $1,759.9 billion. From low to low, the balance dropped by $10.2 billion, reflecting trades in November and December:

And the overall balance sheet?

Total assets on the Fed’s balance sheet dropped from $4,460 billion at the outset of the QE Unwind in early October to $4,393 billion on today’s balance sheet, the lowest since July 9, 2014. A $67-billion drop:

The balance sheet shows the effects not only of QE but also of the Fed’s other roles that impact its assets and liabilities. The most significant among these roles is that the Fed is also the official bank of the US government. And the Treasury Department’s huge and volatile cash balances are kept on deposit at the Fed. The Fed also holds “Foreign Official Deposits” by other central banks and government entities. But these activities have nothing to do with QE or the QE-Unwind.

There have been suggestions that the Fed “backed off” or “reversed” the QE-Unwind during the recent sell-off to prop up the markets. This was deducted from a single bounce in the overall balance sheet in week ending February 14. But this bounce was just part of the typical ups and downs and perfectly within range.

I have to disappoint these folks: based on what has happened in February with the Fed’s Treasury securities and MBS – the only two accounts that matter for the QE Unwind: The Fed didn’t miss a beat. The QE-Unwind proceeded as planned throughout the sell-off. And I expect this to continue.

This Fed isn’t going to try to bail out every whiner on Wall Street. It has been clear about that. It won’t take Wall-Street whining seriously until credit starts freezing up – and the credit markets are far away from that.

The housing market shudders. Could it be the new tax law and sky-high home prices? Read…  I Didn’t Think it Would Go This Fast: Mortgage Rates Blamed for 3-Year Low in Pending Home Sales

end
Another must read…David Stockman talks about the Trump trade wars which will certainly accentuate the problems with the huge 1.8 trillion of bonds that must be issued by the Fed. Finally, the buying of one’s stock is not going to help as the economy falters badly
(courtesy David Stockman)

David Stockman On The Two Janets And The Perfect Storm Ahead

Authored by David Stockman via Contra Corner blog,

The Bloomberg news crawler this week was heralding the heart of our thesis: Namely, that “flush with cash from the tax cut”, US companies are heading for a “stock buyback binge of historic proportions”.

This isn’t a “told you so” point. It’s dramatic proof that corporate America has been absolutely corrupted by the Fed’s long-running regime of Bubble Finance. Undoubtedly, the C-suites view the asinine Trump/GOP tax cut not as a green light to invest and build for the long haul, but as manna from heaven to pump their faltering share prices in the here and now.

And we do mean a gift just in the nick of time. The giant Bernanke/Yellen financial bubble is finally springing cracks everywhere, putting corporate share prices and executive stock option packages squarely in harms’ way.

So what could be more timely and efficacious than an enhanced, government debt-financed wave of stock buybacks to rejuvenate the speculative juices on Wall Street and embolden the robo-machines and punters for another round of buy-the-dip?

Indeed, corporate stock buying is now cranking at a $1 trillion annual rate or nearly double the rate of the last several years. That huge inflow of cash and encouragement to Wall Street will undoubtedly break the market’s fall in the short-run; and over the next several quarters, perhaps, enable an extended stop-and-start stepwise decline rather than a sudden sharp plunge as in the fall-winter of 2008-09.

It also underscores why the Paul Ryan school of conservative policy wonks got it so wrong on the corporate rate cut. They still dwell in a pari passu world where higher after-tax rates of return would, in fact, stimulate increased investment, growth, employment and income. But they utterly fail to recognize that the Fed destroyed that world long ago, and that the current noxious regime of Keynesian monetary central planning is the deadly enemy of both economic prosperity and traditional free market-oriented conservative policy.

That is to say, the giant growth retardant in today’s economy is resident in the Eccles Building, not the US Treasury. Yet by slashing the corporate tax rate without off-setting spending cuts, and before first fixing the central bank problem, they have produced an epic mess.

And it is this mess—which we have described as a thundering monetary/fiscal collision—that will finally cancel-out the interim prop to the market from the corporate buyback binge. Moreover, on top of that we now have the Donald truly off the deep end with the launch of his one-man world trade wrecking show.

We describe it that way because when it comes to big picture policy impacts there is almost nothing the President can do on a unilateral basis to move the needle. Thus, he got nowhere on ObamaCare “repeal and replace” because there was no functioning majority on Capitol Hill; and he lucked in completely on his ballyhooed tax cut.

To wit, it happened only because the Congressional GOP was desperate to post a legislative success–any success–that it could use during the 2018 campaign as a reason to retain a Republican Congress. And that legislative trophy will come in especially handy if it becomes necessary as a matter of political survival to figuratively extend the mile-long trek from Capitol Hill down to the Trump White House by a considerable multiple of the same.

But trade is the one policy arena where the Donald can go completely rogue owing to the insidious section 232 of the 1962 trade act. The latter literally gives the President open-ended powers to impose tariffs and other trade protections in behalf of any industry deemed essential to “national defense” that is purportedly being injured by foreign competition.

Needless to say, the Donald’s un-varnished, un-vetted and un-shackled thoughts whims on most any topic are a thing of considerable disruptive potential. But when it comes to trade, his mind beats to the sound of a drummer not from this world or even possibly the next.

In follow-up to yesterday’s flying projectiles of steel and aluminum tariffs, Trump was all-in this AM on his twitter account, and what he had to say needs exactly no exegesis:

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!

Never mind, of course, that from a narrow statistical vantage point there are only 376,000 US jobs in all of primary metals including steel, aluminum, copper, nickel and sundry lesser metals and alloys. By contrast, downstream metal using industries employ upwards of 8 million in durable goods alone and 960,000 in the auto sector, which happens to average about 3,000 pounds of steel and aluminum per vehicle.

Self-evidently, the 25% and 10% tariffs on steel and aluminum, respectively, will raise their input costs by those percentages, whether customers use domestic or imported metals because the purpose of these tariffs is to put a high domestic floor under what are otherwise world market based prices. Accordingly, the Trump tariffs will send economic harm cascading downstream—to say nothing of the virtually certain chain reaction of retaliation and counter-retaliation that these moves will foster in the global trading system.

So there is indeed a perfect storm brewing. After rattling around the White House for 13 months and frequently acting as if he doesn’t even run the cabinet departments (e.g. why didn’t he fire his dunce AG long ago?), the Donald has finally found the one policy grenade that he can toss into the fray all on his own. And in the very field where his ideas are as half-baked, naïve and incindiary as they come.

To be sure, it is almost certain that the Trump tariffs will get tied up in litigation just as the Muslim bans have been. After all, SecDef “Mad-dog” Mattis himself has attested that DOD accounts for only 3% of steel and aluminum industry output. So the “national defense” fig leaf for the Donald’s impetuous foray into rank protectionism will likely come under withering assault in the courts.

But that will not mitigate the near-term turmoil because the above quoted tweets make abundantly clear that on the matter of trade, Trump means to become a one-man wrecking crew; and that there is no one around the White House who can take away his primary weapon in the global trade war which is sure to ensue. Namely, his twitter account and its incendiary capacity to insult and incite trading partners from one side of the planet to the other.

In the context of the Donald’s newly launched trade war, we advert to the other menace bearing down on the Wall Street casino—notwithstanding the current buyback binge and the dip-buying reprise it is likely to ignite (a bit of that was evident in today’s big reversal to the green on the S&P 500).

We are referring, of course, to what we have previously described as a thundering monetary/fiscal collision. Never before have both financial arms of the US government—-the Treasury and the central bank—-engaged in the simultaneous selling of securities with such malice aforethought as is now coming down the pike. During the year ahead (FY 2019) something in the order of $1.8 trillion of cash will be drained out of the bond pits to fund the $1.2 trillion fiscal deficit and the Fed’s $600 billion QT bond-dumping exercise.

While we have little doubt that the market will ultimately clear this crushing supply/demand imbalance, we have no hope at all that it will be at anything near the current 2.85% yield on the 10-year UST. What will eventually clear the decks is a “yield shock” that pushes the UST back into the 4-5% zone where it belongs (a real yield of 250 basis points plus 2.0% inflation).

As to the monetary policy side of the equation, Jay Powell and his drunken band of Keynesian central bankers are finally doing the right thing, albeit for the wrong reasons. That is, they are plowing full speed ahead to “normalize” monetary policy because they mistakenly believe we have arrived at the nirvana of “full-employment” and that it is therefore safe to reload their dry powder in order to be ready for the next recessionary downturn.

As we indicated earlier, however, safety on main street has nothing to do with it. What we actually have is a monumental financial powder keg in the casinos—so there is absolutely nothing safe about the Fed’s pivot to higher rates and QT. In fact, its normalization policy amounts to an exercise in tossing matches at Wall Street until ignition is finally, if unintentionally, achieved.

Moreover, we do think they will take it right up to the ignition point. While Powell is more a business-oriented Keynesian than was school marm Janet Yellen and her dashboard of 19 labor market indicators, he still views the main street economy just a few months or quarters at a time as she did.

In effect, the new Fed chair is just part of the Two Janets–the one who wears trousers and a tie. Both view the main street economy through the Keynesian beer-goggles of short-term deltas in the so-called “incoming data” that tell them nothing important or reliable.

Indeed, these indicators show utter failure on any kind of reasonable trend basis, but in the very short-run they have been bolstered by the global growth spurt emanating from the Red Ponzi’s massive pre-coronation credit impulse.

That’s over and done, of course, with credit expansion cooling rapidly and manufacturing output nearing the 50.0 crossover line in Chinese purchasing manager surveys. So the chart below on domestic US freight shipments captures the true story perfectly.

We are referring here to the privately published Cass Freight Index, which is based on hundreds of large US shippers from a broad array of industries—including consumer packaged goods, food, automotive, chemical, OEM, retail and heavy equipment–which use all modes of transportation including trucking, rails, barge and intermodal. Unlike much of the government GDP data which is distributed for for free and is probably worth about what users pay for it, the Cass Index is paid for by business customers who demand accuracy and transparency.

The stunning thing about this key metric of real main street activity, which is measured on an honest-to-goodness volume basis, is that there has been no recovery at all. As of January 2018, the index was still 14% below its pre-crisis peak, and has actually been trending slightly lower for the past three years.

But as they say on late night TV, that’s not all. The truth of the matter is that the January reading of 99.7 was a touch below the 100.0 reading from 18 years ago in January 2000, when Bill Clinton was still in the White House and Donald Trump was still a New York City Democrat. So if you are inclined to think that main street growth has been honing-in on the flat line—as in zero, zilch and zeds—you cannot find any better support than the picture below.

Except this isn’t what they see on Wall Street or the Eccles Building owing to the cult of the stock market. In the current price-discovery-free context that modern central banking has rendered, the only thing that really matters is short-run deltas that can be grabbed by head line reading algos and day traders as a signal to hit the “buy” key.

In fact, on a year-over-year basis the Cass Freight index is up a whopping 12.5% from January 2017, where it is riding the cresting movement of exports, imports and domestic goods triggered by the giant China credit impulse of 2016-2017. So you can call that a sloppy wet one from Emperor Xi, but it signifies exactly nothing about the sustainable state of the main street economy.

Indeed, you can peruse a whole heap of Fed meeting statements, minutes and speeches by the Two Janets and you will find no mention of the multiplicity of flat-lining and non-recovering indicators that abound on the main street economy. The chart below merely provides a few more examples–including gas and electric utility production, wholesale trade employment and manufacturing output.

All of them have flat-lined after the initial rebound from the Great Recession, and all of them are still below or at their 10-year ago pre-crisis level. Yet an economy surely is not in the pink of health or in any way healed when its use of gas and electric power is flat or when the output of goods or activity levels at wholesale have stalled out at decade ago levels.

Nevertheless, the Two Janets have found their way clear to wax on about a “recovery” narrative that is absolutely refuted by both the data and the deep economic malaise in Flyover America that put the Donald in the Oval Office.

So now comes the perfect storm.

The first Janet and her predecessors put the Donald in the Oval Office by a policy of cheap debt that inflated Wall Street, strip-minded main street and sent American production and jobs off-shore. That’s because the essence of  Bubble Finance was the prevention of a market based regime of high interest rates, low consumption and the deflationary cleansing that was necessary to keep the US economy competitive in a mercantilist, statist and credit bloated global economy.

Now the King of Debt paces around in the Oval Office oblivious to the baleful effects of the debt bomb he has helped unleash and the trade war projectiles that he has now tossed into the fray.

Meanwhile, the second Janet sees only smooth sailing on his GDP dashboard and financial equipoise in what is purported to be a prudentially regulated and reformed Wall Street. So he is plowing ahead with the epochal monetary policy pivot that will finally end 30 years of Keynesian fantasy by triggering a bond market “yield shock” and a consequent collapse of the Wall Street house of cards.

Oddly, it is not the four rate hikes in 2018 which Powell promised Congress this week that will actually prove to be the monetary trigger-man. Instead, it’s the silent, escalating pace of QT that will eventually do the job.

As we said yesterday, the Fed does not operate in a vacuum of time and space. The punters and front-runners who got hideously rich buying what the Fed was buying during the ghastly era of QE will be making the pivot, too, and long before the academics and apparatchiks who run the central bank figure out what is going down.

That is to say, by transforming the money and capital markets into outright gambling casinos and momentum driven wagering joints, The Fed has sown the seeds of its own demise.

One the other side the impending perfect storm, we doubt that the Donald will still be standing. But we know that the Two Janets will be reviled for years to come.

end

The USA will now experience a two fold problem.  The first is the huge 1.20 trillion dollar deficit coupled with the 600 billion of bonds that will be rolled off the Fed’s balance sheet.  This $1.8 trillion bond issuance may clear but certainly not without the rise in the 10 yr bond yield into the 4 to 5% area.  That will break valuations and cause severe hardship to its economy.

Now the second problem is the trade war initiated by Trump in order to save its economy. He now plans a retaliatory tax…i.e. whatever tax Europe applies, so will the USA.  The EU adds considerably more taxes on products than the USA(it is more protectionist that the uSA) so a tax by Trump will certainly hurt products coming into the USA and that will hurt stock markets from around the world.  It will also be hugely inflationary in the USA and again that will cause costs to rise and break valuations causing severe hardship to its economy.

(courtesy zerohedge)

Trump Threatens Europe: “We Will Apply A Retaliatory Tax On Their Cars”

This is how trade wars escalate: Trump hasn’t even officially announced the steel and aluminum import tariffs, expected to be formally unveiled this coming week, and the rhetoric is already one of World Trade War I doom and gloom.

Hours after Trump tweeted on Friday morning that “trade wars are good, and easy to win,” European Commission President Jean-Claude Juncker said the bloc is prepared to respond quickly and forcefully by targeting imports of Harley-Davidson motorbikes, Levi Strauss & Co. jeans and bourbon whiskey from the U.S.

According to some, the preliminary EU retaliation was targeted in a way that would maximize political pressure on American leaders: Harley-Davidson is based in House Speaker Paul Ryan’s home state of Wisconsin, while bourbon whiskey hails from the state of Senate Majority Leader Mitch McConnell. San Francisco-based Levi Strauss is headquartered in House Minority Leader’s Nancy Pelosi’s district.

As Bloomberg noted, Juncker’s threat heightened the prospects of a global free-for-all, as the World Trade Organization said the potential of escalating tensions “is real” and the International Monetary Fund warned the restrictions would likely damage the U.S. and global economy. It also prompted speculation that in light of the widespread condemnation by US trading partners and allies, that Trump might step back and reconsider the sanctions.  This in turn led to a late-day burst in the stock market.

That however appears unlikely: first, in a tweet Friday morning, Trump doubled-down and warned of more trade actions ahead, casting them as reciprocal taxes, a term he has used for imposing levies on imports from countries that charge higher duties on U.S. goods than the U.S. currently charges.

“We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!” Trump said in the tweet.

* * *

On Saturday, Trump’s resolve appears only to be hardened. For one, Trump’s newly reincarnated foreign trade advisor said that the tariffs will likely be signed early next week. On Friday, Navarro also made clear that there wouldn’t be any exemptions, for either Canada or other US allies:

“I don’t believe any country in the world is going to retaliate for the simple reason we are the most lucrative and biggest market in the world,” Navarro told Fox News Friday. “They know they’re cheating us. All we’re doing is standing up for ourselves.”

One look at the record US trade deficit, with both the entire world, and with just Europe, and one could make the case that he is correct.

And then, just to underscore that the market’s late Friday assumption that Trump may change his mind on trade wars may have been woefully premature, on Saturday trump unleashed a pair of tweets making it clear that he not only has no intention of backing down, but is already planning counter-retaliation to Europe’s retaliation.

In the first of two tweets, trump blasted that “the United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”

The United States has an $800 Billion Dollar Yearly Trade Deficit because of our “very stupid” trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!

More importantly, Trump followed that tweet with an explicit threat aimed at Europe, saying that “If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!

And yes, the trade imbalance is indeed big: in fact it has never been bigger.

Of course, that’s just how the EU likes it, and once Trump counter-retaliates to Europe’s retaliation, it will be Europe’s turn next to retaliate once again, eventually resulting in the tit-for-tat “prisoner’s dilemma” constant defection game taught in every Poli Sci 101 class, which also happens to be the worst possible outcome.

Incidentally, while many have been quick to slam Trump’s strategy, at least one hedge fund believes that Trump is correct in his trade war stance. Here is Stephen Jen from SLJ Macro Partners:

  1. The US is the least protectionist large economy in the world, while China is the most protectionistIn our note on this subject a couple of weeks ago, we pointed out that the US, based on data from the WTO, is by far the least protectionist nation in the world (with the exception of a tariff-free city state like Hong Kong) — far more open than Europe, Japan, and especially China. And it seems a bit hypocritical to us that more protectionist nations are complaining about the actions of the least protectionist nation.
  2. Excess capacity in China. China has half of the world’s steel production capacity, much of which is excessive and unnecessary, even Beijing would admit. The 2008-09 RMB4 trillion stimulus in China further boosted China’s industrial capacity, including in steel and other sunset industries. This has led to a situation where Chinese steel production had to be exported to the rest of the world at very low prices. Some in the US, not surprisingly, consider this ‘dumping’. Further, both the US and the EU share the verdict that China is still not a ‘market-based’ economy, because of the large and persistent explicit and implicit government subsidies, and other forms of support from the public sector, that make Chinese products unfairly competitive.
  3. Why is Europe not held to the same standard as the US? Europe is complaining about the US’ latest policy. Investors should know that Europe has already imposed two dozen anti-dumping measures against Chinese steel exports. What then is the substantive difference between the anti-dumping measures imposed by the EU and what the Trump Administration is doing? Is Europe less protectionist than the US? If Europe were so open, what is all the fuss about Brexit and the inability of the UK to access the European market?

So what happens if over the next week a trade war officially breaks out? The answer will depend on how US trading partners such as China, Canada and the EU retaliate, but one thing is clear: as GMO’s Ben Inker wrote on Friday afternoon, for risk-assets this could be the start of a 40% (or more) crash in stocks:

Trade Wars are Bad, and Nobody Wins

Yesterday’s announcement by President Trump of imminent tariffs on steel and aluminum imports was taken poorly by global stock markets. Perhaps in an attempt to convince investors this was an incorrect response, early this morning he tweeted that “trade wars are good, and easy to win.” He is wrong, and beyond the simple fact of his wrongness, a trade war is probably more dangerous for investors at this time than at any other time in recent history given the implications it would have for inflation, monetary policy, and economic growth. The only positive from the tariffs is that it is a windfall profit increase for U.S. producers of steel and aluminum, which is at least positive for them. It is unlikely to cause any material increase in U.S. capacity to produce steel and aluminum and therefore unlikely to lead to many additional jobs even in those sectors. The negatives are much more significant. I believe these tariffs on their own will push inflation higher, and higher inflation is a threat to the valuations of more or less all financial assets today. But the greater threat is that this escalates into an actual trade war. A trade war would increase prices on a much broader array of goods and services, while simultaneously depressing aggregate global demand. This pushes us in the direction of not just inflation but stagflation, where both valuations and corporate cash flow would be under pressure. While there are scenarios that would be worse for financial markets—the proverbial asteroid on a collision path with Earth comes to mind—a trade war has the potential to be very bad for both the global economy and investor portfolios.

As I wrote about last December, a significant inflation problem might well be the worst thing that could happen to a balanced portfolio, leading to losses on the order of 40%. A global trade war would be exactly the kind of economic event that could foreseeably lead to losses of that magnitude.

Trade Wars are Bad

As a general rule, when you add “war” to your description of an event, it’s a pretty strong suggestion that it is unlikely to be either good or easy. Wars are sometimes well intentioned (the war on drugs), occasionally necessary (World War II), but seldom good and more or less never easy to win. Even if you do “win” easily, the longer term implications are often more problematic than you thought (the second Iraq War). There is still some time for this particular war to be averted. But while it is our general contention that equity markets tend to overreact to political and economic events, this is not one of those times.

end
Jim Rickards outlines the 3 stages of economic warfare:
1. a currency war
2 a trade war
3. a shooting war
he describes in detail the past and how that led to war and today is no different
(courtesy Jim Rickards/Daily Reckoning)

Jim Rickards: “Now, A Trade War – Next, A Shooting War”

Authored by James Rickards via The Daily Reckoning,

A popular thesis since the 1930s is that a natural progression exists from currency wars to trade wars to shooting wars. Both history and analysis support this thesis.

Currency wars do not exist all the time; they arise under certain conditions and persist until there is either systemic reform or systemic collapse. The conditions that give rise to currency wars are too much debt and too little growth.

In those circumstances, countries try to steal growth from trading partners by cheapening their currencies to promote exports and create export-related jobs.

The problem with currency wars is that they are zero-sum or negative-sum games. It is true that countries can obtain short-term relief by cheapening their currencies, but sooner than later, their trading partners also cheapen their currencies to regain the export advantage.

This process of tit-for-tat devaluations feeds on itself with the pendulum of short-term trade advantage swinging back and forth and no one getting any further ahead.

After a few years, the futility of currency wars becomes apparent, and countries resort to trade wars. This consists of punitive tariffs, export subsidies and nontariff barriers to trade.

The dynamic is the same as in a currency war. The first country to impose tariffs gets a short-term advantage, but retaliation is not long in coming and the initial advantage is eliminated as trading partners impose tariffs in response.

Despite the illusion of short-term advantage, in the long-run everyone is worse off. The original condition of too much debt and too little growth never goes away.

Finally, tensions rise, rival blocs are formed and a shooting war begins. The shooting wars often have a not-so-hidden economic grievance or rationale behind them.

The sequence in the early 20th century began with a currency war that started in Weimar Germany with a hyperinflation (1921–23) and then extended through a French devaluation (1925), a U.K. devaluation (1931), a U.S. devaluation (1933) and another French/U.K. devaluation (1936).

Meanwhile, a global trade war emerged after the Smoot-Hawley tariffs (1930) and comparable tariffs of trading partners of the U.S.

Finally, a shooting war progressed with the Japanese invasion of Manchuria (1931), the Japanese invasion of Beijing and China (1937), the German invasion of Poland (1939) and the Japanese attack on Pearl Harbor (1941).

Eventually, the world was engulfed in the flames of World War II, and the international monetary system came to a complete collapse until the Bretton Woods Conference in 1944.

Is this pattern repressing itself today?

Sadly, the answer appears to be yes.

The new currency war began in January 2010 with efforts of the Obama administration to promote U.S. growth with a weak dollar. By August 2011, the U.S. dollar reached an all-time low on the Fed’s broad real index.

Other nations retaliated, and the period of the “cheap dollar” was followed by the “cheap euro” and “cheap yuan” after 2012.

Once again, currency wars proved to be a dead end.

Now the trade wars have begun. On Thursday, July 27, the U.S. Congress passed one of the toughest economic sanctions bills ever against Russia.

This law provided that U.S. companies may not participate in Russian efforts to explore for oil and gas in the Arctic. But it went further and said that even foreign companies that do business with Russia in Arctic exploration will be banned from U.S. markets and U.S. contracts.

These new sanctions pose an existential threat to Russia because depends heavily on oil and gas revenue to propel its economy.

Russia has vowed to retaliate.

Meanwhile, the long-expected trade war with China has begun at last. This is a trade war that President Trump threatened the entire time while he was on the campaign trail. Yet after Trump was sworn in as president he did nothing about Chinese trade and currency practices.

Trump did not declare China a “currency manipulator” and did not impose tariffs on Chinese steel and aluminum being dumped on U.S. and world markets.

The reason Trump did not act swiftly was because he wanted China’s help facing North Korea’s nuclear weapons and missile programs. If China would put pressure on North Korea, Trump would go easy on China.

But China did not hold up their end. China has done nothing to change North Korea’s behavior and will not do so in the future. Now Trump has no reason to hold back.

On Monday, Jan. 22, President Trump announced steep 30% U.S. tariffs on imports of solar panels and washing machines.

The tariffs were not aimed at China alone, but China is by far the largest source of solar panels shipped to the U.S., and one of the largest sources of washing machines.

So while Trump can claim that these tariffs were not specifically targeted at China, that is exactly what they were.

After Trump announced the tariffs on solar panels and washing machines. the Chinese Commerce Ministry expressed “strong dissatisfaction” and said it “aggravates the global trade environment.”

Now yesterday, the Trump administration announced plans to impose tariffs on steel and aluminum. The plan slaps a 25% tariff on steel and 10% on aluminum. While the tariffs are expected to apply to all countries, China was certainly a strong consideration. Trump plans to sign the trade measure next week and said they would be in effect “for a long period of time.”

Incidentally, the announcement came the same day when senior officials were scheduled to meet with China’s top economic adviser, Liu He.

I expect the U.S. will soon label China a currency manipulator, which will lead to still further sanctions. Like Russia, China will not take any of this lying down but will retaliate with its own sanctions, tariffs and bans on U.S. investment in China.

China leaked an announcement recently that the People’s Bank of China was considering allocating its reserves away from additional purchases of U.S. Treasury securities. That should be taken not as an immediate threat but as a shot across the bow indicating how China could retaliate for U.S. tariffs or other trade penalties.

Get ready for an all-out financial war between the U.S. and China.

Germany is also in the crosshairs because of its huge trade surplus. Trump has already torn up the TPP trade agreement and has put Canada, Mexico and South Korea on notice that their trade deals need to be renegotiated.

A full-scale trade war is now upon us. It will shake markets and be a major headwind for world growth. It will get ugly fast and the world economy will be collateral damage.

Today looks like a replay of the 1930s. As Mark Twain reputedly remarked, “History does not repeat, but it does rhyme.”

Next comes the shooting war with North Korea, which will inevitably draw in Russia, China, South Korea and Japan. This will be tantamount to World War III.

Now is a good time to reduce your allocation to stocks, increase your cash allocation to reduce volatility and increase your exposure to gold as a safe haven.

end

Trump offers no tariff exemptions with regard to tariffs that he will implement.  Due to the tariffs on aluminum and steel and both products are exported from Canada, you can assume that NAFTA is officially dead..

(courtesy zerohedge)

Trump Offers No Tariff Exemptions In Conversations With World Leaders: Ross

Update: some further soundbites from Ross as he makes the Sunday morning TV shows:

  • ROSS: OTHER COUNTRIES HAVE MORE TO LOSE THAN U.S. IN TRADE WAR
  • ROSS: RETALIATION THREATS VS U.S. COMPANIES A `ROUNDING ERROR’

Finally, regarding Gary Cohn’s future, Ross said that the former Goldman COO is not leaving the administration after failing to stop President Donald Trump from imposing tariffs on steel and aluminum imports.

“The president likes to hear every side of every argument,” Ross said on ABC. “That way he’s sure he’s gotten all points of view. We’ve had lively discussion, but Gary Cohn, as far as I know, is certainly not going to walk out.”

As for potential retaliation, while some was expected, Ross said it would be trivial: “As to the idea of retaliation, sure they may well be some sort of retaliation, but the amounts that they’re talking about are also pretty trivial.”

On the impact of new tariffs, Commerce @SecretaryRoss says: “The total amount of tariffs we’re putting on is about $9 billion in a year, that’s a fraction of… the economy, so the notion that it would destroy a lot of jobs, raise prices, disrupt things, is wrong.”

* * *

US allies and trade partners – especially Canada, Japan and the EU – who were hoping that they would be exempt from Trump’s steel and aluminum import tariffs may be set for disappointment.

Speaking on ABC’s “This Week” on Sunday, Commerce Secretary Wilbur Ross said that Trump has spoken to world leaders about his planned tariff hikes on steel and aluminum and is not considering any exemptions to the measure.

“I know he’s had conversations with a number of the world leaders,” Ross said according to Reuters, adding that “the decision obviously is his, but as of the moment as far as I know he’s talking about a fairly broad brush. I have not heard him describe particular exemptions just yet.”

Echoing his CNBC comments from Friday, Ross also played down the possible effects of the proposed tariffs on the U.S. economy: he said the total amount of tariffs the U.S. government is proposing is about $9 billion a year, a fraction of 1% of the economy.

“So the notion that it would destroy a lot of jobs, raise prices, disrupt things, is wrong,” Ross said; confirming a recent analysis from Barclays according to which the adverse impact from the tariffs would be negligible.

Ross also dismissed European Union threats of retaliatory tariffs on flagship American products including Harley Davidson motorcycles, bourbon and Levi’s jeans as trivial and a “rounding error.” The commerce secretary said the Europeans were discussing a “pretty trivial amount of retaliatory tariffs, adding up to some $3 billion of goods.”In our size economy that’s a tiny, tiny fraction of 1 percent,” Ross said. “So while it might affect an individual producer for a little while overall, it’s not going to be much more than a rounding error.”

On Saturday, Trump also threatened European automakers with a tax on imports if the European Union retaliates.

* * *

Separately, speaking on CNN’s State of the Union, White House trade advisor Peter Navarro whose recent promotion presaged last week’s tariff announcement, repeated that Trump’s decision to place steep tariffs on steel and aluminum imports is for both national and economic security: “This is an action basically to protect our national security and economic security.”

Navarro – a long term China trade hawk – argued that Beijing is the source of the problem despite its low place on the list of exporters. The White House advisor said China has “tremendous overcapacity” that allows it to flood the market, which “ripples down.”

As such, the tariffs are intended to support American-made products, although as we showed previously, China is not even in the top 10 nations from which the US imports steel.

“We can’t have a country that can defend itself and prosper without an aluminum and steel industry,” Navarro said.

Navarro also dodged a question about whether the United States will ultimately leave the World Trade Organization. Telling CNN’s Jake Tapper that it was “a provocative question”, Navarro said that the WTO is a big part of the problem when it comes to trade.

“A lot of the problem has been the World Trade Organization, which is over 160 countries, and a lot of them simply don’t like us and so we don’t get good results there,” Navarro said, and instead countered that while the U.S. is a free trader, it is also a fair trader, echoing a line from the president: “we are fair and reciprocal traders and the World Trade Organization I think needs to change with the times.”

* * *

It is unlikely that either Ross’ or Navarro’s comments will mitigate an increasingly angry foreign response to what most now acknowledge is the start of global trade wars.

end

Paul Ryan and for that matter, many Republicans are asking Trump to kill the proposed tariffs on steel and aluminum/  If not they may respond in kind. Interestingly enough the stock market did not go down as scheduled with the tariffs

(courtesy zerohedge)

Paul Ryan Urges Trump To Kill Proposed Tariffs As Congress Warns “It May Respond”

Trump’s trade tariffs may be derailed by his own party according to a Reuters report that House speaker Paul Ryan has joined the chorus against the Trump tariffs.

  • U.S. HOUSE REPUBLICAN SPEAKER RYAN URGES TRUMP NOT TO ADVANCE ON PLANNED ALUMINUM, STEEL TARIFFS -SPOKESWOMAN

In a statement emailed by his spokeswoman, Ashlee Strong, Ryan added the following:

We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan. The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains”

According to Bloomberg’s Michael Regan “this is either a strong signal that Trump may end up being talked out of tariffs, or a strong signal that Paul Ryan’s about to get saddled with a new insult-comic nickname from Trump.

Meanwhile Trump is also facing rising pressure from Congress, where as Bloomberg notes is trying to talk Trump out of tariffs. On Sunday, chairman of the US House of Representatives Ways and Means Committee, Kevin Brady, suggested that all fairly traded steel and aluminium, especially from Canada and Mexico, should be excluded from proposed tariffs.

On Monday, the full court press on Trump continued, not just from Brady…

  • REP. BRADY TO TELL TRUMP TARIFFS SHOULD BE NARROW, TARGETED
  • REP. BRADY DRAFTS LETTER TO TRUMP EXPRESSING TARIFF CONCERNS

… But also other Republicans: according to Reuters, Congressional leaders haven’t ruled out “a potential action down the line” if President Trump follows through with imposing sanctions on imported steel and aluminum, a GOP official said.

Finally, as Wilbur Ross hinted on Sunday TV shows, while Trump is expected to sign the tariffs this week, the details are far from final, especially when it comes to exemptions. As one trading desk notes, “the critical response internationally and also from US business leaders adds pressure on Trump to back down from his initial proposal.”

The only thing that is missing is a drop in the market. Recall that on Friday, Deutsche Bank’s macro strategist Alan Ruskin suggested that a sharp market drop may be welcome to free trade advocates:

With widespread reports that the President has ignored the advice of leading advisors like Gary Cohn, it has become rational for those who believe in free trade to wish for a sharp decline in the stock market, as something the President may listen to on this issue.

One look at stocks today and it appears that the market has already decided that Trump will back down and there is no need to drop first to force Trump’s hand.

end

Ryan is rejected by Trump.  The markets believe Trump is bluffing.  Trump may be at war with his own party.

(courtesy zerohedge)

Ryan Rejected: Trump Says “Not Backing Down”

Moments ago, when reporting that Paul Ryan – and other senior members of Congress – had joined the Tariff Resistance, demanding that Trump kill the proposed steel and alu import tariffs, we quoted Bloomberg’s Michael Regan who remarked that “this is either a strong signal that Trump may end up being talked out of tariffs, or a strong signal that Paul Ryan’s about to get saddled with a new insult-comic nickname from Trump.

Well, it appears that Ryan is about to have a new nickname, because according to flashing red headlines, Trump just said that he won’t be changing his mind.

  • TRUMP SAYS NOT BACKING DOWN WHEN ASKED ABOUT RYAN COMMENTS
  • TRUMP SAYS HE’S NOT BACKING DOWN ON TRADE

Trump then doubled down, adding that “I don’t think you’re going to have a trade war” in response to the planned tariffs, which is somewhat at odds with everything else he said. Regarding Nafta and the tariffs, he told reporters, “If they aren’t going to make a fair trade deal, we’ll leave it this way.” He also threatens to tax car imports coming in ‘like water’, repeating his weekend tweet.

So far, the stock market refuses to react clearly convinced that Trump is, once again, bluffing, while Trump’s comment on China has triggered a small pop in the yuan.

end
Another indicator that things are not doing well in the uSA:  car sales by all companies. Light trucks are doing ok but not cars. You can imagine the pain of European car manufacturers if Trump adds a huge tax equal to what EU applies  in Europe as Europe is far more protectionist than the USA.
(courtesy jeffrey Snyder/Alhambra Investment Partners)

Carmageddon 2.0: Auto Sales Slump As Hurricane Bump Fades

Authored by Jeffrey Snyder via Alhambra Investment Partners,

I can’t help but wonder what the CNBC author was going to write. It’s not a sentence I ever thought I would put down, but in this case the omission might have meant something. In reporting on auto sales yesterday, the article started out with the ultimate cliffhanger:

Major automakers reported lower U.S. new vehicle sales for February on Thursday as consumer

As consumer what? Obviously, a mistake in the editing process, an-all-too-familiar occurrence in the modern media landscape where the very idea of an editor is becoming outlandish. Still, given where we are in this inflation and boom hysteria, please, CNBC, finish the thought!

A more cynical reader might expect the original text would have done so by saying the usual, something like “Major automakers reported lower U.S. new vehicle sales for February on Thursday as consumer spending continued to be strong, robust, and downright booming otherwise.” It would have been a hard case to make given these results, but since when has the media failed to live up to that challenge before? Alas, we will never know honesty or typicality.

The numbers weren’t good for the vast majority of the auto sector, as sales in the aftermath of the hurricane aftermath continued to wind down. The rundown for February 2018 (all rates are year-over-year): GM -6.9%; Ford an identical -6.9%; FCA -1%; Nissan -4%; Honda -5.6%. On the plus side was +4% for Toyota on the strength of its redesigned Camry; and +6% for VW.

There were a few more ominous developments alongside these disappointing results. First, the trend toward heavy incentive spending by automakers is starting to look like it may have run its course. Manufacturers throughout last year went deep into their own pockets to subsidize what turned out to be flat sales at best, and for most slightly declining volume.

Mark LaNeve, Ford VP of US Marketing, Sales, and Service, said:

In February, overall Incentive spend for the industry was down $65 year over year, and was down $50 sequentially to January. This is really a change from what we saw most of last year and in fact what we saw most of the last three years when year over year changes in incentive spend were up on average $300 to $400 consistently during that entire time frame.

That may or may not be related to how sales of pickups and other light truck vehicles such as luxury SUV’s have softened after the sales boost following Harvey and Irma. Light trucks are higher margin products, a factor that has helped to a certain extent cushion the industry over the past several years as the labor market has slowed – and auto sales with it.

Overall, it has been the car segment which has been eschewed by consumers, the lower end vehicles that would be in demand by those same workers and potential workers who have become more uneasy about the labor market. The shift in gasoline prices since the oil crash has also rebalanced demand, too, toward light trucks and against smaller more fuel-efficient vehicles.

Mark LaNeve again:

The optimistic view is that people are just waiting for their next generation of trucks. The negative view is that good truck sales are in the rearview mirror.

Truck sales are for most still higher than they were last summer when sales of everything verged on outright contraction. There is still, however, a clear artificiality to the most recent months following last summer’s tropical eruption.

As for cars, this has to be a multi-faceted issue. The numbers are otherwise staggering; from August 2014 through and including the latest estimates for February 2018, the BEA figures car sales are down by almost one-third. Obviously, light trucks have picked up some of that slack, representing the rebalancing mix, but given that at the margins it hasn’t been enough to keep sales growing suggests a deepening macro divide in addition to gasoline and whatever else.

If truck sales falter here, and car sales continue to slip, then the profit squeeze becomes more and more of a primary rather than background consideration. Maybe manufacturers are content with production at these lower levels if incentives worked especially in the truck space, but profit growth can’t be put off forever.

It’s another major economic drag made out from the primary economic drag – the labor market.

In other words, there isn’t any reasonable expectation that auto sales are about to boom. If there was one, and some manufacturers last fall had expressed vague hopes they were, it was predicated on little more than broken windows. The predicted boost to sales in autos as well as other things as a consequence of storm-destroyed automobiles does not appear to have unleashed an economy-wide shift (the long sought “S” curve of Paul Krugman fame). It was quite often talked about in that way, of course, but it could only ever have been temporary.

Automakers in particular now have to face the prospects of a double downside; sales trends are moving back toward last summer’s weak pre-hurricane baseline to start with, and then comes the negative drag of all those broken windows (and who will eventually pay for them, and it wasn’t ever going to be insurance companies). Throw in questions about manufacturing profits, and downside (economic) risks in 2018 are even more than they ever were in 2017.

end

Republican Senator Cochran to resign next month due to health reasons

(courtesy zerohedge)

Republican Senator Thad Cochran To Resign Next Month

Republican Senator Thad Cochran (R-MS), 80, chairman of the powerful Appropriations Committee, said on Monday he will resign on April 1 because his “health has become an ongoing challenge.”

“I regret my health has become an ongoing challenge. I intend to fulfill my responsibilities and commitments to the people of Mississippi and the Senate through the completion of the 2018 appropriations cycle, after which I will formally retire from the U.S. Senate,” Cochran said in a statement.

Cochran is the chairman of the Appropriations Committee. His announcement comes as Congress aims to pass a mammoth government funding bill by March 23, and after months of speculation about his health.

Cochran was first elected to the Senate in 1978 and currently serves as the chairman of the Senate Appropriations Committee.

As the Daily Beast notes, the decision puts the spotlight on Chris McDaniel, a conservative Republican who is trying to unseat Mississippi’s other senator, Roger Wicker

end

I doubt this will happen but we had better report on it:  the USA is said to consider a new military action against Syria as there are claims that Assad used chemical weapons

(courtesy zerohedge)

US Said To Consider New Military Action Against Syria

The last two weeks have seen the mainstream media soaked with headlines containing the word “Syria” and “Attack” as Washington desperately spins narratives left and right to cling to their reason for existence in Syria (legal or illegal, we will let you decide).

All of which made us wonder – is the American public being ‘softened’ up for something?

And now we have an answer – or at least we have a strong a strawman as we have yet seen.

Six weeks after Secretary of State Rex Tillerson blamed Assad for a new chemical attack and accused Russiaof allowing it, he admitted that he really doesn’t know much at all about “whoever conducted the attacks”.

Which was followed a month ago by threats of military action against Syria from General Mattis (despite having no evidence)

“I don’t have the evidence,” Mattis said. “What I am saying is that other groups on the ground – NGOs, fighters on the ground – have said that sarin has been used, so we are looking for evidence.”

And then Israel piled on by attacking a site just outside of Syria’s capital city called Jamraya – believed to be a military research facility related to chemical weapons. 

Which leads us to today – after weeks of “Syria…attack” headlines, The Washington Post reports that the Trump administration has considered new military action against the Syrian government in response to reports of ongoing chemical weapons use, officials said, raising the prospect of a second U.S. strike on President Bashar al-Assad in less than a year.

The president reportedly requested options for punishing the Assad government following reported chlorine gas attacks  – at least seven so far this year  –  and possibly other chemicals affecting civilians in opposition-controlled areas.

Of course, this could be nothing but a strawman, as WaPo carefully acknowledges lower in their story (away from the headlines) that

” One official, who like others spoke on the condition of anonymity to address internal deliberations, said the president did not endorse any military action…”

And, Dana White, chief Pentagon spokeswoman, denied Mattis took part in discussions about military action in Syria and said the “conversation did not happen.”

These accusations all stem from a Feb. 25 incident, during which residents and medical staff in a rebel-held Damascus suburb, Eastern Ghouta, described symptoms associated with chlorine exposure. One child died, medical staff reported.

Even if Trump authorized another attack, WaPo points out that the Pentagon is likely to advocate limiting U.S. involvement in the war. The April attack, which included 59 cruise missiles, was aimed narrowly at an isolated airfield, minimizing the likelihood of tit-for-tat escalations.

Finally, we note that Reuters reports, The Organization for the Prohibition of Chemical Weapons is investigating whether chlorine was used in recent attacks in Eastern Ghouta.

As a reminder, President Trump ordered the Pentagon to fire Tomahawk missiles on the Syrian facility believed to be linked to a sarin gas attack that killed 80 people in April of last year, following another unverified attack.

Of course, as we noted previously, now that unverified claims of chemical attack incidents in Syria (and their subsequent uncritical amplification by media and politicians) have become routine, the following somewhat obvious observations need to be recalled:

  • The Assad government has long been winning the war, what incentive does it have to do the one thing (use CW) that would hasten its demise?
  • The US is a party to the conflict, so its claims must be evaluated accordingly.
  • The “NGOs and fighters on the ground” (in Mattis’ own words) are an even more direct party to the conflict.
  • The only way anti-Assad fighters can survive at this point is by triggering massive US military intervention (by claiming “Assad is gassing his own people!”).
  • The greater the momentum of Syria/Russia/Iran forces in defeating jihadists on Syrian territory, the more frequent the claims of chemical attacks  become – issued from those very jihadists suffering near certain defeat.
  • In the midst of a grinding 7-year long “fog of war” conflict involving constant claims and counterclaims, mere “open source” information means nothing in terms of proof or hard evidence.
  • Al-Qaeda administers the locations from which chemical attack allegations are being made. 
  • US officials stand ready to make use of “chemical attack” claims with or without “evidence credible or uncredible” (in Mattis’ words) anytime further pressure needs to be applied toward Russia or Syria.
  • Extraordinary claims demand extraordinary evidence (Iraq WMD anyone?).

We would not hold our breath, waiting for this attack to happen. Washington needs a ‘legitimate’ excuse to re-engage in Syria and Trump needs another distraction from his Trade Wars distraction from the Russian meddling investigations.

SWAMP STORIES

Eric Holder believes that Mueller will hit Trump with obstruction charges.  I do not think so…it is his constitutional authority to fire Comey and his actions were not criminal in any way

(courtesy zero hedge)

Eric Holder Predicts Mueller Will Hit Trump With Obstruction Charges

President Trump will be slapped with obstruction of justice, predicts former Attorney General Eric Holder.

“You technically have an obstruction of justice case that already exists,” Holder, who served under then-President Obama, said on HBO’s “Real Time with Bill Maher.” “I’ve known Bob Mueller for 20, 30 years; my guess is he’s just trying to make the case as good as he possibly can. So, I think that we have to be patient in that regard.”

The president’s foes point to Trump’s alleged interactions with former FBI Director James Comey leading up to his dismissal amid the agency’s ongoing investigation into potential ties between the Trump campaign and Russia – including a conversation in which Comey says Trump said “I hope you can let this go,” in regards to his investigation in to former National Security Advisor Michael Flynn.

Last May in an NBC interview with Lester Holt, Trump made clear he was frustrated that the Russia allegations had become “an excuse for having lost an election,”  and that Comey was clearly on the chopping block:

HOLT: Monday you met with the Deputy Attorney General Rod Rosenstein.

TRUMP: Right.

HOLT: Did you ask for a recommendation?

TRUMP: What I did is I was going to fire Comey. My decision. It was not…

HOLT: You had made the decision before they came into your office (ph).

TRUMP: I — I was going to fire Comey. I — there’s no good time to do it, by the way.

In December 2017, Trump told thje New York Times “I have absolute right to do what I want to do with the Justice Department.”

Holder has long suggested that an obstruction charge was possible – however, this is the first prediction he’s made that Mueller would actually bring the charge.

Meanwhile, liberal legal scholar Alan Dershowitz disagrees:

You cannot charge a president with obstruction of justice for exercising his constitutional power to fire Comey and his constitutional authority to tell the Justice Department who to investigate, who not to investigate,” said Dershowitz last December. “That’s what Thomas Jefferson did, that’s what Lincoln did, that’s what Roosevelt did. We have precedents that clearly establish that.”

The controversy over whether or not Trump obstructed justice was one of the primary drivers behind Deputy Attorney General Rod Rosenstein’s appointment of Robert Mueller as Special Counsel following Comey’s dismissal. Notably, Attorney General Jeff Sessions recused himself from all things related to the Russia investigation – frustrating many who say he’s simply been sitting on his hands while Mueller and his fleet of trump-hating Democrat investigators gun for the President.

“I don’t want to get into loyalty, but I will tell you that, I will say this: Holder protected President Obama. Totally protected him,” Trump told the New York Times. “When you look at the things that they did, and Holder protected the president. And I have great respect for that, I’ll be honest.

Holder shot back fast and furiously on Real Time with Bill Maher – stating “The difference between me and Jeff Sessions is that I had a president I didn’t have to protect.” Perhaps he forgot about the selective targeting of conservative groups by the IRS, lying about the cause of Benghazi, Obama’s knowledge of Hillary’s private server, the Solyndra green energy and similar crony capitalism scams, spying on journalists, the Secret Service hooker scandal, and of course Fast and Furious.

Holder thinks Sessions should resign in the wake of President Trump openly criticizing him. “At some point, though, you would hope that you would have the intestinal fortitude or the pride to simply say, you know, ‘I wanted this job all my life, but it’s not worth it, and I’m not going to take that kind of abuse, and I’m simply going to tell you, you know, go screw yourself, and I’m out,’” Holder told Mahe

end
Trump on the war path this morning as he slams the Obama administration for trying to discredit the Trump candidacy and then his presidency
(courtesy zerohedge)

“Bigger Than Watergate” – Trump Slams Obama Admin’s “Unprecedented” Actions

President Trump took a break from confirming his intent to retaliate for years of unfair-trade-deals with America’s so-called ‘allies’, to return to another topic that is as existentially-threatening to the status quo as globalists would have us believe Trump’s trade war ideals will be.

That topic is the Obama administration’s efforts to discredit Trump’s 2016 campaign, via investigation, while also failing to act on Russian efforts to influence the election.

“Why did the Obama Administration start an investigation into the Trump Campaign (with zero proof of wrongdoing) long before the Election in November?” Trump tweeted.

“Wanted to discredit so Crooked H would win. Unprecedented. Bigger than Watergate! Plus, Obama did NOTHING about Russian meddling,” he continued.

Why did the Obama Administration start an investigation into the Trump Campaign (with zero proof of wrongdoing) long before the Election in November? Wanted to discredit so Crooked H would win. Unprecedented. Bigger than Watergate! Plus, Obama did NOTHING about Russian meddling.

The tweet was a continuation of Trump’s argument that the FBI under Obama was out to get him. Trump has repeatedly said his campaign did not collude with Russia, which intelligence officials believe meddled in the election with the goal of helping Trump and hurting Clinton.

The Hill points out that Trump has previously claimed the Obama administration “did nothing” to stop Russian election interference, particularly after special counsel Robert Mueller filed charges against 13 Russian nationals and three Russian organizations for their role in the meddling. Obama issued sanctions against Russia for the meddling after U.S. intelligence officials said they had found evidence that the country had hacked U.S. groups and leaked emails in an effort to influence the 2016 vote.

Trump is not alone in his perspective, as The Hill reports that even some Democrats have acknowledged the Obama administration could have taken a more forceful stance to oppose Russian meddling. Ex-Obama administration officials, including Vice President Joe Biden, have said they did not want to take action that would make it appear they favored one candidate over the other.

end

For those of you who are addicted to news on the swamp, here is another story that Sam Nunberg is refusing to cooperate with a grand jury testimony

(courtesy zerohedge)

“His Investigation Is BS”: Former Trump Aide Refuses To Cooperate With Mueller Subpoena; Hints “Trump May Have Done Something”

As part of what Donald Trump has dubbed an ongoing “witch hunt”, Special Counsel Robert Mueller has subpoenaed longtime Donald Trump associate and former aide Sam Nunberg. requesting he appear before a grand jury investigating Russian interference in the 2016 elections. Nunberg, however, told Bloomberg he has no intention of cooperating with Mueller’s subpoena.

“I’m not going to cooperate with Mueller. It’s a fishing expedition,” Nunberg told Bloomberg News. “They want me in there for a grand jury for testimony about Roger Stone. He didn’t do anything. What is he going to do? His investigation is BS. Trump did not collude with Putin. It’s a joke.”

Nunberg was on Trump’s payroll from mid-2011 to August 2015 when he was fired from Trump’s campaign shortly after it emerged that he had posted racially charged Facebook posts. In July 2016, Trump sued him for violating a confidentiality agreement, however the suit was dropped the following month.

“They want me in there for grand jury on Friday. I’m not paying the money to go down there,” Nunberg said.“What’s he going to do? He’s so tough – let’s see what they do. I’m not going to spend 40 hours going over emails. I have a life.”

Nunberg told Bloomberg he expects one line of questioning before the grand jury to be related to Stone, who Nunberg worked with closely over the years.

In a somewhat surreal interview, Nunberg also spoke with NBC’s Katy Tur on Monday afternoon, reiterating that he was not going to comply with the subpoena while stating his belief that his onetime boss may be guilty of collusion with the Russians.

After admitting to host Katy Tur that he’d been interviewed by Mueller’s investigators, the host asked Nunberg if he believes the special counsel “has anything” on Trump.

“I think they may,” the ex-aide responded. “I think he may have done something during the election. But I don’t know that for sure.”

This isn’t the first time Nunberg’s given a rambling MSNBC interview. Last week, he called presidential adviser and son-in-law Jared Kushner a “weak link” who has done “nefarious things,” and earlier this year, called Trump an “idiot” and a “complete pain in the ass to work for.” In the latter interview, which was conducted by host Joy Ann Reid, many noted that Nunberg appeared to be intoxicated.

A transcript of the “bonkers” section in which Nunberg justifies his decision is below:

In the subpoena dated Feb. 27, Bloomberg reports that Nunberg was also asked to turn over emails, texts and other communications with 10 campaign associates, including Trump, former campaign manager Corey Lewandoski and outgoing White House communications director Hope Hicks starting in November 2015 and running through the present.

Another possible line of questioning could be related to Trump’s activities in Moscow in 2013 during the Miss Universe pageant, which the president once owned. The book by author Michael Wolff, “Fire and Fury,” quotes Nunberg extensively describing the early months of the Trump administration. Wolff said the former adviser was “generally regarded as the man who understood Trump’s whims and impulses best” and a Bannon associate. Mueller’s team interviewed Bannon earlier this month.

Incidentally, when asked if Nunberg was correct that Trump “may have done something during the election”, Press Sec. Sanders dnied, saying that “He’s incorrect…I certainly can’t speak to him or the lack of knowledge that he clearly has.”

On former Trump campaign staffer Sam Nunberg’s statement that Pres. Trump “may have done something during the election,” Press Sec. Sanders says, “He’s incorrect…I certainly can’t speak to him or the lack of knowledge that he clearly has.”

I will  see you TUESDAY night

HARVEY

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