June 13/FOMC RAISES RATES BY 1/4%/YIELD CURVE INVERTS SIGNALLING POLICY FAILURE/GOLD/SILVER REBOUNDS ON THE NEWS/AT COMEX CLOSING GOLD UP $2.20 TO $1297.80/SILVER UP 11 CENTS TO $16.87/IN ACCESS MARKET GOLD FINISHED A TOUCH BELOW 1300.00 DOLLARS AND SILVER AT $17.04/IN A ACTIVE DELIVERY MONTH THE GOLD COMEX HAS BEEN TOTALLY COMATOSE WITH HARDLY ANY GOLD ENTERING OFFICIAL VAULTS: JUNE IS A VERY ACTIVE MONTH AND STILL NO GOLD HAS ENTERED THESE PREMISES//ZTE CRASHES AND THEN TRUMP WILL INITIATE MORE SANCTIONS AGAINST CHINA/ANOTHER BIG STORY: CHINESE SHADOW BANKING SECTOR COLLAPSES AND THIS WILL WITHOUT A DOUBT HURT GLOBAL TRADE NUMBERS/IN EUROPE BANK RUNS FROM THE SOUTHERN COUNTRIES TO THE NORTHERN ONES/SAUDI ARABIA AND ALLIES STORM THE LAST OPEN PORT IN YEMEN THAT HAS ACCESS TO THE OUTSIDE WORLD/MORE SWAMP STORIES FOR YOU TODAY/

 

GOLD: $1297.80UP  $2.20 (COMEX TO COMEX CLOSINGS)

Silver: $16.95 UP 11 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1299.50

silver: $17.04

I WILL UPDATE DATA LATE IN THE EVENING AS I AM PUBLISHING EARLY

For comex gold:

JUNE/

NUMBER OF NOTICES FILED TODAY FOR JUNE CONTRACT:87 NOTICE(S) FOR 8700 OZ

TOTAL NOTICES SO FAR 6674 FOR 667400 OZ (20.758 tonnes)

For silver:

JUNE

0 NOTICE(S) FILED TODAY FOR

NIL OZ/

Total number of notices filed so far this month: 923 for 4,615,000 oz

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Bitcoin: BID $6386/OFFER $6486: down $110(morning)

Bitcoin: BID/ $6227/offer $6327: DOWN $269  (CLOSING/5 PM)

end

First Shanghai gold fix comes at 10 pm est

The second Shanghai gold fix:  2:15 pm

First Shanghai gold fix gold: 10 pm est: 1301.31

NY price  at the same time: 1295.85

PREMIUM TO NY SPOT: $5.46

Second gold fix early this morning: 1300.06

USA gold at the exact same time:1295.40

PREMIUM TO NY SPOT:  $4.66

AGAIN, SHANGHAI REJECTS NEW YORK PRICING.

WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY A CONSIDERABLE 2458 CONTRACTS FROM  232,621 DOWN TO 230,163 DESPITE YESTERDAY’S TINY  5 CENT LOSS IN SILVER PRICING.    WE ARE NOW WITNESSING OUR USUAL AND CUSTOMARY COMEX LONG LIQUIDATION AS WE ENTERED INTO THE NON ACTIVE DELIVERY MONTH OF JUNE AS LONGS PACK THEIR BAGS AND MIGRATE OVER TO LONDON.  WE WERE  NOTIFIED THAT WE HAD A STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP: 3055 EFP’S FOR JULY, 232 EFP’S FOR SEPT. AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 3287 CONTRACTS. WITH THE TRANSFER OF 3827 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 3827 EFP CONTRACTS TRANSLATES INTO 16.44 MILLION OZ  ACCOMPANYING:

1.THE 5 CENT FALL IN  SILVER PRICE  AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR JUNE COMEX DELIVERY. (4.630 MILLION OZ) DESPITE IT BEING A NON ACTIVE DELIVERY MONTH.

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

19,255 CONTRACTS (FOR 9 TRADING DAYS TOTAL 22,542 CONTRACTS) OR 112.710 MILLION OZ: (AVERAGE PER DAY: 2504 CONTRACTS OR 12.520 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  112.710 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 16.1% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:            1,426.91      MILLION OZ.

ACCUMULATION FOR JAN 2018:                                               236.879     MILLION OZ

ACCUMULATION FOR FEB 2018:                                               244.95         MILLION OZ

ACCUMULATION FOR MARCH 2018:                                       236.67         MILLION OZ

ACCUMULATION FOR APRIL 2018:                                          385.75         MILLION OZ

ACCUMULATION FOR MAY 2018:                                            210.05       MILLION OZ

RESULT: WE HAD AN STRONG SIZED DECREASE IN COMEX OI SILVER COMEX OF 2458 DESPITE THE TINY 5 CENT FALL IN SILVER PRICE WE HAVE NOW ENTERED THE NEW NON ACTIVE MONTH OF JUNE.   THE CME NOTIFIED US THAT IN FACT WE HAD A VERY STRONG SIZED EFP ISSUANCE OF 3287 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 (SEE COMEX DATA) . FROM THE CME DATA:  3055 EFP CONTRACTS FOR JULY,  232 EFP’S FOR SEPT. AND ZERO FOR ALL OVER MONTHS   FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 3287). TODAY WE GAINED A GOOD: 829 TOTAL OI CONTRACTS  ON THE TWO EXCHANGES: i.e.3287 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH AN DECREASE OF 2458  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE  5 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $16.86 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS NON  ACTIVE JUNE DELIVERY MONTH. IT SURE LOOKS LIKE A FAILED BANKER SHORT COVERING EXERCISE!!

In ounces AT THE COMEX, the OI is still represented by OVER 1 BILLION oz i.e. 1.152 MILLION OZ TO BE EXACT or 164% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JUNE MONTH/ THEY FILED AT THE COMEX: 0 NOTICE(S) FOR NIL OZ OF SILVER

IN SILVER, WE HAVE NOW SET THE NEW RECORD OF OPEN INTEREST AT 243,411 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51  ON APRIL 9.2018. (AND IN LOOKS LIKE WE ARE GOING TO SEE ANOTHER RECORD HIT THIS MONTH)

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ AND MAY: 36.285 MILLION OZ /AND JUNE/2018  (4.630 MILLION OZ SO FAR)
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ (FINAL)

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT). IT ALSO LOOKS LIKE BANKER CAPITULATION IN SILVER AS THEY STRUGGLE TO REMOVE SOME OF THEIR HUGE OBLIGATIONS.

In gold, the open interest ROSE BY A CONSIDERABLE 1867 CONTRACTS UP TO 448,695 DESPITE THE DROP IN THE GOLD PRICE/YESTERDAY’S TRADING (FALL OF $4.70).  WE ARE NOW IN THE  ACTIVE DELIVERY MONTH OF JUNE. NO DOUBT THE BOYS ARE CASHING IN THEIR COMEX LONGS TO BEGIN THE PROCESS TO MOVE INTO LONDON FORWARDS.  THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 8423 CONTRACTS :   JUNE SAW THE ISSUANCE OF 0 CONTRACTS , AND AUGUST SAW THE ISSUANCE OF:  8423 CONTRACTS WITH ALL OTHER MONTHS ZERO.  The new OI for the gold complex rests at 448,695. 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. . 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 FAIR SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES: 1867 OI CONTRACTS INCREASED AT THE COMEX AND A STRONG SIZED 8423 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 10,290 CONTRACTS OR 1,029,000 OZ = 32.00 TONNES. AND STRANGELY ALL OF THIS DEMAND OCCURRED WITH A FALL OF $4.70

YESTERDAY, WE HAD 4685  EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 84,531 CONTRACTS OR 8,453,100  OZ OR 262.93 TONNES (9 TRADING DAYS AND THUS AVERAGING: 9392 EFP CONTRACTS PER TRADING DAY OR 939,200 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 9 TRADING DAYS IN  TONNES: 262.93 TONNES

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

THUS EFP TRANSFERS REPRESENTS 262.93/2550 x 100% TONNES =  10.31% OF GLOBAL ANNUAL PRODUCTION SO FAR IN APRIL ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  3,714.75*  TONNES   *SURPASSED ANNUAL PROD’N

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

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018:         649.45 TONNES

ACCUMULATION OF GOLD EFP’S FOR MARCH 2018:                741.89 TONNES  (22 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR APRIL 2018:                   713.84 TONNES  (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR MAY 2018:                     693.80 TONNES ( 22 TRADING DAYS)

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

Result: A STRONG SIZED INCREASE IN OI AT THE COMEX OF 1867 DESPITE THE  $4.70 LOSS IN PRICE // GOLD TRADING YESTERDAY ($4.70 FALL).  WE ALSO HAD AN STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 8472 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX.  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 8423 EFP CONTRACTS ISSUED, WE HAD AN  NET  GAIN OF 11,506 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

8423 CONTRACTS MOVE TO LONDON AND 1867 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 32.000 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THIS DEMAND OCCURRED AT THE COMEX WITH A LOSS OF $4.70 IN TRADING!!!.

we had: 87 notice(s) filed upon for 8700 oz of gold at the comex.

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

GLD...

WITH GOLD  UP $2.20  TODAY: / NO CHANGES IN GOLD INVENTORY AT THE GLD/ /GLD INVENTORY 828.76 TONNES

Inventory rests tonight: 828.76 tonnes.

SLV/

WITH SILVER DOWN UP 11 CENTS TODAY / NO CHANGES IN THE SILVER INVENTORY AT THE SLV/)

/INVENTORY RESTS AT 317.290 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 AN STRONG SIZED 2458 CONTRACTS from  232,621 DOWN TO 230,163 (AND, FURTHER FROM  THE  NEW COMEX RECORD SET /APRIL 9/2017 AT 243,411/SILVER PRICE AT THAT DAY: $16.53). THE PREVIOUS RECORD OTHER THAN WAS ESTABLISHED AT: 234,787, SET ON APRIL 21.2017 OVER ONE YEAR AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89. OUR CUSTOMARY MIGRATION OF COMEX LONGS MORPH INTO LONDON FORWARDS CONTINUES AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:   (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), 3055 EFP’S FOR JULY, 232 EFP CONTRACTS FOR SEPT. AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 3287 CONTRACTS . EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 2458 CONTRACTS TO THE 3287 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GAIN OF 829 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES:  4.145 MILLION OZ!!! AND THIS STRONG SIZED DEMAND OCCURRED DESPITE A 5 CENT FALL IN PRICE .  THE BANKERS ORCHESTRATED THEIR RAID THROUGHOUT LAST WEEK  DESPERATELY TRYING TO PARE THEIR GIGANTIC OPEN INTEREST SHORT ON BOTH EXCHANGES BUT TO NO AVAIL. JUDGING BY THE RECORD NUMBER OF EFP ISSUANCE DURING APRIL AT 385.75 MILLION OZ AND THE CONTINUAL OI GAIN ON THE TWO EXCHANGES, THE CONSTANT RAIDS, (THAT ARE NOW BEING CALLED UPON BY OUR BANKER FRIENDS  IN AN ATTEMPT TO SHAKE AS MANY SILVER LEAVES FROM THE SILVER TREE AS POSSIBLE) AND JUDGING BY THE RESULTS FROM YESTERDAYS ACTION, THEY HAVE NOT BEEN AT ALL SUCCESSFUL.

RESULT: A STRONG SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 5 CENT FALL IN SILVER PRICING YESTERDAY. BUT WE ALSO HAD ANOTHER STRONG SIZED 3287 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR JUNE, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY 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

)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 30.01 points or 0.97%   /Hang Sang CLOSED DOWN 377.91 points or 1.22%    / The Nikkei closed UP 88.03 POINTS OR 0.38% /Australia’s all ordinaires CLOSED DOWN .51%  /Chinese yuan (ONSHORE) closed UP at 6.4004/Oil DOWN to 65.99 dollars per barrel for WTI and 75.69 for Brent. Stocks in Europe OPENED MOSTLY IN THE GREEN//.  ONSHORE YUAN CLOSED UP AT 6.4004 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3929/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING MUCH STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA

Trump will probably not like this:  North Korea claims that Trump folded to Kim demands  such as the war games and to agree to lift sanctions.  He agreed with the former demand but not the latter

( zerohedge)

b) REPORT ON JAPAN

3 c CHINA

i)ZTE crashes once it was opened for trading and it fell 40% and limit down in China.  Then Trump announces all deals are off with China and should be put ZTE into the morgue

( zerohedge)

ii)This is not good for the global trade picture:  Chinese shadow bank lending unexpectedly crashes last month to a two year low

( zerohedge)

iii)this ought to help markets around the world:  Trump will slap China with tens of billions in tariffs by Friday according to the Wall; Street Journal

(courtesy zerohedge)

4. EUROPEAN AFFAIRS

i)A good look at the EU once the ECB stops its QE

( Daniel Lacalla/DLacalle.com)

ii)As we have been pointing out to you, depositors in the southern sphere are moving their money to Germany, the Netherlands and Finland due to the huge target 2 imbalances

(courtesy Mish Shedlock/Mishtalk)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

i)Trump again slams OPEC and demands lower oil prices

( zerohedge)

ii)Both WTI and gasoline soar after a huge surprise crude draw.  Production surges again into record territory

(courtesy zero hedge)

8. EMERGING MARKET

SOUTH AFRICA/ISRAEL

With White Farmers being threatened on losing their farms to the black, Israeli commandos are training them to defend their lands.

(courtesy zerohedge)

9. PHYSICAL MARKETS

A good commentary on how some countries have repatriated their gold from USA vaults

( Tom Lewis/GoldTelegraph.com)

ii)Ronald Stoeferle on how cheap gold is right now

audio with Chris Martenson
(courtesy Chris Martenson/Ron Stoeferle)

iii)Craig Hemke states that the use of EFP is a fraud( Craig Hemke/Sprott Money/GATA)

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

i)MARKET DATA FOR TODAY

a)PPI surges following on the heals of a 7 yr high in consumer price inflation and that has had a tepid response in the bond market

( zerohedge)

USA/CHINA

ii)The ceasefire in the USA/China trade war is off as Trump is set to slap tariffs on China this Friday as negotiations collapse

( zerohedge)

iii)The ZTE deal is now on the brink of collapse after the senate vows to derail the Trump agreement

( zerohedge)

i b)FOMC report

Hawkish Fed:  yield curve collapses signalling a policy error

(courtesy zerohedge)

iv)SWAMP STORIES

a)We now get documentation of a confrontation between Rosenstein and the oversight Committee members.  The event happened in January and it looks like it is still going on

(courtesy zerohedge)

b)this may be troublesome, but I highly doubt that Cohen will implicate trump on anything

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A CONSIDERABLE SIZED 1867 CONTRACTS UP to an OI level 448,695 DESPITE THE LOSS IN THE PRICE OF GOLD ($4.70 LOSS/ YESTERDAY’S TRADING).   FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE.   THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED  COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 8423 CONTRACTS WERE ISSUED: FOR  JUNE, 0 CONTRACTS ISSUED,  FOR AUGUST 8423 CONTRACTS AND ZERO FOR ALL OTHER MONTHS:

TOTAL  8423 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 BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 10,290 OI CONTRACTS IN THAT 8423 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 1867 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 10,290 contracts OR 1,090,000  OZ OR 32.00 TONNES.

Result: A CONSIDERABLE SIZED INCREASE IN COMEX OPEN INTEREST DESPITE THE LOSS IN PRICE /FRIDAY  (ENDING UP WITH AN LOSS IN PRICE OF $4.70).  THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  10.290 OI CONTRACTS..

We have now entered the active contract month of JUNE where we LOST 405 contracts and that leaves us with 684 contracts  We had 425 notices filed upon yesterday so we AGAIN SURPRISINGLY GAINED A GOOD 20 CONTRACTS OR AN ADDITIONAL 2000 OZ WILL STAND TO DELIVERY AT THE COMEX AS THESE GUYS REFUSED THE SWEETNER FIAT OFFERED BY THE BANKERS.  I GUESS YOU CAN STATE THAT THIS IS CLOSE TO BACKWARDATION IN NY IN GOLD AS OWNERS REFUSE TO TAKE A GUARANTEED PROFIT TO OBTAIN A LOWER PRICED FUTURE CONTRACT FOR FEAR THAT THE PHYSICAL IS JUST NOT THERE WHEN THE FUTURE COMES DUE!!

.JULY saw a LOSS of 44 contracts to stand at 1256.  The next big delivery month after June is August and here the OI FELL BY 133 contracts DOWN to 320,557.

AFTER AUGUST, THE NEXT ACTIVE DELIVERY MONTH IS OCTOBER AND HERE THE OI ROSE BY 199 CONTRACTS UP TO 12,020 CONTRACTS.

We had 87 notice (s) filed upon today for 8700 oz at the comex

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY: 190,521  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY:  245,178   contracts

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And now for the wild silver comex results.

Total silver OI FELL BY A CONSIDERABLE SIZED 2458 CONTRACTS FROM 232,621 DOWN TO 230,163 (AND A LITTLE FURTHER FROM THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS)  WITH THE  5 CENT LOSS IN SILVER PRICING/ YESTERDAY. SINCE WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JUNE, WE WERE  INFORMED THAT WE HAD A STRONG SIZED 3055 EFP CONTRACT ISSUANCE FOR JULY, 232 EFP CONTRACTS FOR SEPT. AND ZERO FOR ALL OTHER MONTHS.  THESE EFPS WERE ISSUED TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  THE TOTAL EFP’S ISSUED: 3287.  ON A NET BASIS WE GAINED 829 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 2458  CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 3287 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN  ON THE TWO EXCHANGES:  829 CONTRACTS

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the NON active delivery month of JUNE and here the front month FELL BY 16 contracts FALLING TO 16 contracts. We had 16 notices filed upon yesterday so we gained 0 contracts or an additional NIL oz will stand in this non active delivery month of June TODAY NOBODY WAS IN URGENT NEED OF PHYSICAL ON THIS SIDE OF THE POND 

The next big active delivery month for silver is July and here the OI LOST 3951 contracts DOWN to 129,139.  The next delivery month is August and here we GAINED 21 contracts  to stand at 67. The next active delivery month after August for silver is September and here the OI ROSE by 1618 contracts UP to 65,220

We had 0 notice(s) filed for NIL OZ for the JUNE 2018 COMEX contract for silver

INITIAL standings for JUNE/GOLD

JUNE 13/2018.

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

oz

No of oz served (contracts) today
87 notice(s)
 8700 OZ
No of oz to be served (notices)
597 contracts
(59,700 oz)
Total monthly oz gold served (contracts) so far this month
6674 notices
667400 OZ
20.758 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
gold comex comatose despite June being a huge delivery month.
 TODAY, WE HAVE  NO  PULSE AT THE GOLD COMEX/ AND AGAIN NO GOLD ENTERS.
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  NIL  oz
total inventory withdrawals out of dealer accounts; nil oz
we had 0 withdrawal out of the customer account:
total customer withdrawals:  nil oz
to which this landed as a deposit in JPMorgan:
we had 0 customer deposit
total customer deposits: nil oz
we had 0 adjustment(s)

For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 87 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 31 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (6674) x 100 oz or 667,400 oz, to which we add the difference between the open interest for the front month of JUNE. (684 contracts) minus the number of notices served upon today (87 x 100 oz per contract) equals 727,100 oz, the number of ounces standing in this active month of JUNE (22.613 tonnes)

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

No of notices served (6674 x 100 oz)  + {(684)OI for the front month minus the number of notices served upon today (87 x 100 oz )which equals 727,100 oz standing in this  active delivery month of JUNE .

FOR COMPARISON:

FOR THE JUNE/2017 CONTRACT INITIALLY 19.95 TONNES STOOD FOR DELIVERY.  AT THE END OF JUNE/2017:  9.176 TONNES STOOD AND THE REST MORPHED INTO LONDON BASED FORWARDS.

WE GAINED 20 CONTRACTS OR AN ADDITIONAL 2000 OZ WILL STAND FOR DELIVERY AS QUEUE JUMPING IS STARTING TO INTENSIFY AT THE GOLD COMEX SOMETHING THAT WHICH WE HAVE WITNESSED IN SILVER FOR THE PAST YEAR. 

“THERE ARE ONLY 15.783 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY AGAINST 22.613 TONNES STANDING  WHICH IS MAKING THIS JUNE CONTRACT MONTH AN EXTREMELY INTERESTING ONE TO WATCH 

total registered or dealer gold:  507,453.430 oz or 15.783 tonnes
total registered and eligible (customer) gold;   9,014,904.206 oz 280.401 tonnes

IN THE LAST 18 MONTHS 74 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE APRIL DELIVERY MONTH

JUNE INITIAL standings/SILVER

JUNE 13/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 589,356.412 oz
CNT
HSBC
sCOTIA
Deposits to the Dealer Inventory
nil;
oz
Deposits to the Customer Inventory
1,140,052.660
oz
jpmorgan
No of oz served today (contracts)
0
CONTRACT(S)
(NIL OZ)
No of oz to be served (notices)
3 contracts
(15,000 oz)
Total monthly oz silver served (contracts) 923 contracts

(4,615,000 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 dealer deposits: nil oz

we had 1 deposits into the customer account

i) Into JPMorgan: 1,140,052.660 oz

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

JPMorgan now has 140 million oz of  total silver inventory or 52.3% of all official comex silver. (140 million/268 million)

total customer deposits today: 1,140,052.660 oz

we had 3 withdrawals from the customer account;

i) Out of CNT: 543,722.660 oz

ii) Out of HSBC: 5137.800 oz

iii) Out of Scotia:  40,496.100 oz

total withdrawals;  589,356.100 oz

we had 0  adjustment/

total dealer silver:  66.073 million

total dealer + customer silver:  270.348 million oz

The total number of notices filed today for the JUNE. contract month is represented by 0 contract(s) FOR NIL oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 923 x 5,000 oz = 4,615,000 oz to which we add the difference between the open interest for the front month of JUNE. (3) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JUNE contract month: 923(notices served so far)x 5000 oz + OI for front month of JUNE(3) -number of notices served upon today (0)x 5000 oz equals 4,630,000 oz of silver standing for the JUNE contract month

PLEASE NOTE THE FOLLOWING FOR COMPARISON PURPOSES:

ON MAY 31.2017 WE INITIALLY HAD 396 OPEN INTEREST STAND OR A LARGE 1.98 MILLION OZ 

STOOD FOR METAL.

AT THE CONCLUSION OF JUNE 2017:  4.92 MILLION OZ FINALLY STOOD AS QUEUE JUMPING STARTED IN EARNEST AND IN THE ENSUING YEAR, IT CONTINUED WITH RECKLESS ABANDON INCLUDING WHAT YOU ARE WITNESSING TODAY

We gained 0 contracts or an additional NIL oz will stand in this non active delivery month of June as nobody was in urgent need of silver today. IN SILVER QUEUE JUMPING HAS BEEN THE NORM FOR OVER A YEAR. IT LOOKS LIKE GOLD IS JOINING ITS WEAKER SISTER IN THIS SAME PHENOMENON

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 94,133 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY:91,707 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF  91707 CONTRACTS EQUATES TO 458 MILLION OZ  OR 65.5% 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 -2.93% (JUNE 13/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.52% to NAV (JUNE 13/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.93%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.52%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV FALLS TO -2.31%: NAV 13.65/TRADING 13.32//DISCOUNT 2.31.

END

And now the Gold inventory at the GLD/

JUNE 13/WITH GOLD UP $2.20/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES

JUNE 12/WITH GOLD DOWN $4.75:NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES

JUNE 11/WITH GOLD UP 65 CENTS/THE CROOKS RAIDED THE COOKIE JAR FOR 3.83 TONNES/INVENTORY RESTS AT 828.76 TONNES

JUNE 8/WITH GOLD DOWN 10 CENTS/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 832.59 TONNES./

JUNE 7/WITH GOLD UP $1.45, THE CROOKS DECIDED TO RAID AGAIN THE GLD GOLD COOKIE JAR TO THE TUNE OF 3.54 TONNES/GOLD INVENTORY LOWERS TO 832.59 TONNES

JUNE 6/WITH GOLD UP $1.30 TODAY, WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.13 TONNES

JUNE 5/WITH GOLD UP $5.30 TODAY, WE HAD A TINY WITHDRAWAL OF .29 TONNES AND THAT NO DOUBT WAS TO PAY FOR FEES/836.13 TONNES

JUNE 4/WITH GOLD DOWN ONLY $2.50, THE CROOKS UNLEASHED A MASSIVE WITHDRAWAL OF 10.61 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 836.42 TONNES

JUNE 1/WITH GOLD DOWN $5.10 TODAY, A HUGE 4.42 TONNES OF GOLD WAS WITHDRAWN FROM THE GLD AND THIS WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 847.03 TONNES

MAY 31/WITH GOLD DOWN 1.60/NO CHANGE IN GOLD INVENTORY/INVENTORY REMAINS AT 851.45 TONNES

MAY 30/WITH GOLD UP $2.70: A HUGE DEPOSIT OF 2.95 TONNES INTO THE GLD/INVENTORY REMAINS AT 851.45 TONNES

MAY 29/2018/WITH GOLD DOWN $4.50/ NO CHANGES IN GLD INVENTORY/INVENTORY REMAINS AT 848.50 TONNES

May 25/WITH GOLD UP ON THE WEEK BUT DOWN 80 CENTS TODAY: WE HAD A HUGE 3.54 TONNES OF GOLD WITHDRAWAL FROM THE CROOKED GLD/

MAY 24/WITH GOLD UP $12.40/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.04

MAY 22/WITH GOLD UP $1.05/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.04 TONNES

MAY 21/WITH GOLD DOWN 50 CENTS/A HUGE CHANGE IN GOLD INVENTORY/A WITHDRAWAL OF 3.24 TONNES FORM GLD INVENTORY/INVENTORY RESTS AT 852.04 TONNES

MAY 18/WITH GOLD UP $1.80/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD/ A DEPOSIT OF 9.11 TONNES INTO GLD INVENTORY/INVENTORY RESTS AT 865.28 TONNES/

GLD WAS ONE MASSIVE FRAUD

May 17/WITH GOLD DOWN $1.75/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

MAY 16./WITH GOLD UP $1.05: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

MAY 15/WITH GOLD DOWN $27.35, THE CROOKS WITHDREW 10 TONNES OF GOLD FROM THE GLD WHICH WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 856.17 TONNES

MAY 14/ WITH GOLD DOWN $2.35: A HUGE DEPOSIT OF 4.68 TONNES OF GOLD INTO THE GLD and then a withdrawal of 1.48 tonnes /INVENTORY RESTS AT 866.17

A net gain of 3.2 tonnes of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JUNE 12/2018/ Inventory rests tonight at 828,76 tonnes

*IN LAST 396 TRADING DAYS: 97.83 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 346 TRADING DAYS: A NET 58.47 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

JUNE 13/WITH SILVER UP 11 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.290 MILLION OZ/

JUNE 12/WITH SILVER DOWN 5 CENTS/A HUGE CHANGES IN SILVER INVENTORY AT THE SLV/ THE CROOKS RAID THE SILVER COOKIE JAR BY 1.976 MILLION OZ/INVENTORY LOWERS TO 317.290 MILLION OZ/

jUNE 11/NO CHANGE IN SILVER INVENTORY/319.266 MILLION OZ

JUNE 8/WITH SILVER DOWN 5 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.412 MILLION OZ//INVENTORY LOWERS TO 319.266 MILLION OZ/

JUNE 7/WITH SILVER UP ANOTHER 12 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SL: A WITHDRAWAL OF 1.883 MILLION OZ WITH ALL OF THAT SILVER DEMAND//INVENTORY RESTS AT 320.678 MILLION OZ/

JUNE 6/WITH SILVER UP 14 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 322.561 MILLION OZ/

JUNE 5/WITH SILVER UP 10 CENTS NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 322.561 MILLION OZ

JUNE 4/WITH SILVER DOWN 1 CENTA SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 522,000 OZ INTO THE SLV/.INVENTORY RISES AT 322.561 MILLION OZ/

JUNE 1/WITH SILVER DOWN 3 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 322.039 MILLION OZ/

MAY 31/WITH SILVER DOWN 7 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 322.039 MILLION OZ/

MAY 30/WITH SILVER UP 16 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/ A DEPOSIT OF 2.071 MILLION OZ/INVENTORY RESTS AT 322.039 MILLION OZ/

MAY 29.2018/ NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.968 OZ

May 25/INVENTORY LOWERS TO 319.968 AS WE HAD A WITHDRAWAL OF 1.035 MILLION OZ

MAY 24/WITH SILVER UP 27 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 22/WITH SILVER UP 6 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 21/ WITH SILVER UP 5 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 18/WITH SILVER DOWN 5 CENTS  A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 942,000 OZ/INVENTORY RESTS AT 321.003 MILLION OZ/

May 17/WITH GOLD UP 6 CENTS/A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 471,000 OZ//INVENTORY RESTS AT 321.945 MILLION OZ/

MAY 16./WITH SILVER UP 10 CENTS/A HUGE DEPOSIT OF 1.883 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 321.474 MILLION OZ

MAY 15/WITH SILVER DOWN 33 CENTS, NO CHANGES AT THE SLV; THE CROOKS COULD NOT BORROW ANY SILVER BECAUSE THERE IS NONE: INVENTORY RESTS AT 319.591 MILLION OZ

MAY 14/WITH SILVER DOWN 10 CENTS/A SMALL CHANGES IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 858,000 FROM THE SLV/INVENTORY RESTS AT 319.591 MILLION OZ/

JUNE 12/2018:

Inventory 317.290 million oz

end

6 Month MM GOFO 2.25/ and libor 6 month duration 2.50

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

G0FO+ 2.25%

libor 2.50 FOR 6 MONTHS/

GOLD LENDING RATE: .25%

XXXXXXXX

12 Month MM GOFO
+ 2.76%

LIBOR FOR 12 MONTH DURATION: 2.65

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.11

end

end

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Do We Still Need Banks In The Age Of Fintech?

– When was the last time you set foot in the bank?
– What is the future for fintech startups?
– Unbundling and disruption wins

– What is the fintech hub to watch in 2019?
– Singapore, London, NYC, Silicone Valley, Zug?

Video recorded at MoneyConf 2018

What do you think? Tell us using #MoneyConf #GoldCore 

News and Commentary

Stocks Mixed, Dollar Edges Up Before Fed Decision: Markets Wrap (Bloomberg)

U.S. Inflation Accelerates to Six-Year High, Eroding Wages (Bloomberg)

CFTC Sues MOMC Operator Over Alleged Metals Fraud Scheme (Finance Magnates)

Gold Prices Fall Below $1,300 as Focus Shifts to Fed (Investing.com)

U.S. government posts $147 billion deficit in May (Reuters)

 

Gold Is Dirt Cheap Right Now – Ronald Stoeferle (Peak Prosperity)

London’s gold market demands green credentials for producers (FT.com)

Strong Labor Market? Dig a Bit Deeper (Bloomberg)

What Trump’s spat with Trudeau means for global trade (Moneyweek)

Price of #Beer Around the World – Cheapest to Most Expensive Infographic (Visual Capitalist)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

12 Jun: USD 1,298.30, GBP 968.27 & EUR 1,100.44 per ounce
11 Jun: USD 1,296.05, GBP 969.32 & EUR 1,099.57 per ounce
08 Jun: USD 1,299.20, GBP 968.68 & EUR 1,103.93 per ounce
07 Jun: USD 1,298.30, GBP 963.86 & EUR 1,097.97 per ounce
06 Jun: USD 1,295.25, GBP 964.57 & EUR 1,101.48 per ounce
05 Jun: USD 1,292.25, GBP 966.73 & EUR 1,105.13 per ounce
04 Jun: USD 1,294.65, GBP 966.46 & EUR 1,103.82 per ounce

Silver Prices (LBMA)

12 Jun: USD 16.85, GBP 12.58 & EUR 14.30 per ounce
11 Jun: USD 16.76, GBP 12.55 & EUR 14.23 per ounce
08 Jun: USD 16.72, GBP 12.49 & EUR 14.25 per ounce
07 Jun: USD 16.74, GBP 12.44 & EUR 14.15 per ounce
06 Jun: USD 16.55, GBP 12.33 & EUR 14.06 per ounce
05 Jun: USD 16.39, GBP 12.26 & EUR 14.03 per ounce
04 Jun: USD 16.44, GBP 12.29 & EUR 14.03 per ounce


Recent Market Updates

– Total US Government Debt Is $200 Trillion – Debt Clock Ticking To Next Crisis
– All Gold is Not Equal – Goldnomics Podcast (Episode 4)
– “Without Gold I Would Have Starved To Death” – ECB Governor
– Swiss Government Pension Fund To Buy Gold Bars Worth Some €600 Million
– Turkey Uses Gold Bullion To Stabilise Its Currency And Economy
– Case for Gold in a Diversified Investment Portfolio
– Get “Positioned In Gold” Now As “You Will Not Have Time To Get Positioned” Later
– Consequences of Ignoring Economic Reality Are Dangerous
– Are Gold And Silver Bullion Obsolete In The Crypto Age?
– In Gold we Trust: 3 Important Factors Leading to the “Turning of the Monetary Tides”
– Silver Trading in Tight $1 Range As Pressure Builds For A Breakout
– Gold Back Above $1300 – Trump Cancels Historic Summit – Silver “Ready To Breakout”
– Gold Price Surges To Record In Turkey and Other Emerging Markets as Currencies Collapse
– Gold Rarity and Value Shown In Stunning Gold Visualisations

davidrussell

end

ANDREW MAGUIRE’S KINESIS WHICH IS A”BITCOIN’ BACKED 100% BY ALLOCATED GOLD AND SILVER

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)

 Dear Harvey Organ,

Thank you for your participation in our webinar on June 7th with our host and CEO of Kinesis, Thomas Coughlin.

The response we received has been incredible, we appreciate you taking the time to join us and hope you found it to be beneficial.

Due to such a high influx of questions we received we were unable to have them all answered. Nevertheless, if there was anything which requires more clarification, or you have a query which needs to be rectified, we invite you to join our telegram group:

https://t.me/kinesismoney

We apologize for the technical issues we incurred during the webinar which resulted in it running a little over schedule, we hope that the next one we host will run seamlessly.

A video has been put together and uploaded onto our YouTube channel which can be found here:

Kinesis Webinar

Please share and subscribe to our YouTube channel to be notified of all the latest videos as they become available.

The rapid growth that we are currently experiencing has been incredible and with your support, is only going to get better.

We are working behind the scenes very hard to create a better experience for everyone involved! Stay tuned in as we have many more announcements to be released in the upcoming days.

Kind Regards,

Kinesis Money
a:C/O ILS Fiduciaries (IOM) Limited, First Floor,Millennium House, Victoria Road, Douglas, Isle of Man IM2 4RW
    
END

The following is self explanatory

(courtesy GATA/Chris Powell and Harvey Organ)

GATA asks bank regulator to check risks of gold

futures maneuver

 Section: 

12:21p ET Sunday, June 10, 2018

Dear Friend of GATA and Gold:

GATA has appealed to the U.S. comptroller of the currency, who has regulatory authority over banks, to review financial risks certain banks may have incurred through derivatives in the monetary metals markets, particularly through the recent heavy use of the “exchange for physicals” mechanism of settling gold and silver futures contracts on the New York Commodities Exchange.

The appeal was made in a letter sent May 5 to the comptroller, Joseph M. Otting, whose office is part of the U.S. Treasury Department, by your secretary/treasurer and GATA futures market consultant Harvey Organ.

“Exchange for physical” settlements of futures contracts long were considered emergency procedures when a seller was not able to deliver metal from an exchange-approved warehouse and wanted to settle with delivery elsewhere. But now such settlements appear to constitute most gold and silver futures settlements on the Comex. It is a strange development that appears to have been necessitated by the increasing difficulties of central banking’s gold and silver price suppression policy.

GATA has received no acknowledgment of the letter. Its text is below and a PDF copy of it is here:

http://www.gata.org/files/ComptrollerOfCurrencyLetter.pdf

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

* * *

May 5, 2018

Joseph M. Otting, Comptroller of the Currency
U.S. Treasury Department
400 7th Street, SW
Washington DC 20219

Dear Comptroller Otting:

Please let us bring to your attention financial risks to major banks involving their possibly unreported exposure to derivatives in the monetary metals markets.

In recent months gold and silver future contracts issued by U.S. banks on the New York Commodities Exchange have been moved off-exchange for delivery through a mechanism known as “exchange for physical” (EFP) contracts. Until recently use of this mechanism was considered an emergency procedure when a seller did not have access to metal for delivery through Comex warehouses. Now the mechanism seems to be in use for a large share of front-month contracts for which delivery is sought.

Here is an example that is happening at the Comex in the front active month of April for gold and the inactive delivery month of April for silver.

In gold, there were 229,436 EFP contracts for 713.64 tonnes, an average of 10,925 contracts and 1,092,500 ounces per trading day.

In silver, there were 77,150 EFP contracts for 385,750,000 ounces, an average of 3,673 contracts and 18,369,000 ounces per trading day.

London Bullion Market Association rules suggest that these contracts may not be reported to regulators. The LBMA’s bylaws say:

“Figures above exclude any contracts not subject to risk-based capital requirements, such as FX contracts with an original maturity of 14 days or less, futures contracts, written options, and basis swaps. Therefore, the total notional amount of derivatives by maturity will not add to the total derivatives figure in this table.”

We are told that these EFP contracts are transferred from the Comex to London as what are called “serial forwards” and their duration is always less than 14 days, which exempts them from being reported.

It is our understanding that in each quarter your office prepares a report detailing risk undertaken by the banks under the comptroller’s supervision.

These risks include derivatives undertaken by U.S. banks and other obligations that may cause a bank to fail. Our concern is that your office may not be aware of large unreported derivative exposure by banks.

Could you review this matter and let us know your conclusions?

Sincerely,

CHRIS POWELL
Secretary/Treasurer

HARVEY ORGAN
Consultant

Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541

END

as a follow up:

Bill, Ed, Harvey:

I’ve just sent this to my congressman’s office, asking for the comptroller of the currency to be prodded to answer GATA’s letter.
cp
———- Forwarded message ———-
From: Chris Powell <cxpowell@yahoo.com>
Date: Mon, Jun 11, 2018 at 12:21 AM
Subject: letter to comptroller of the currency
To: Mary Yatrousis <mary.yatrousis@mail.house.gov>Hi, Mary:Here’s a somewhat more substantial request for help from Representative Larson.Attached as a PDF is a letter my organization, the Gold Anti-Trust Action Committee Inc., sent to the U.S. comptroller of the currency more than a month ago. We have gotten no acknowledgment.I realize that the mail can be slow in Washington as it undergoes security checks, but I’d be grateful if the comptroller’s office could be encouraged to respond in the near future.Thanks again.

cp
—–
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541
USA

end

A good commentary on how some countries have repatriated their gold from USA vaults

(courtesy Tom Lewis/GoldTelegraph.com)

Countries Around The World Have Begun Pulling

Their Gold From US Vaults

Authored by Tom Lewis via GoldTelegraph.com,

The United States of America is beginning to lose its reserve currency dominance.

Countries around the world are working to find ways to circumvent the US dollar when it comes to trade and settlement. In addition to that, nations are requesting for their gold holdings stored overseas to return home.

Turkey has been the latest country to request their gold as they pulled 220 tons of gold out of the US Federal Reserve system on April 19, 2018. The countries 220 tons of gold is valued at $25.3 billion. Turkey has followed countries such as:

With regards to bringing or storing their gold home.

via zerohedge

Turkey’s President Tayyip Erdogan decision to withdraw their gold was an act of trying to prioritize his nation’s currency. He recently urged the international monetary fund to pay loans in gold instead of US dollars.

He was quoted saying:

These debts should be in gold. Because at this point the karat of gold is unlike anything else. The world is continually putting us under currency pressure with the dollar. We need to save states and nations from this currency pressure.

Even though Turkey has drawn lots of attention with regards to pulling its gold from the United States Federal Reserve System, as mentioned above they are not the only nation currently wanting to bring their gold home.

But why are these countries rushing to get their Gold back?

It’s not a secret that there is a lack of confidence with regards to the U.S. Treasury’s claim that it currently holds 261,000,000 ounces of gold in Fort Knox and other locations. On top of that, the official gold reserves have never gone through a thorough independent audit.

Which you would think makes lots of countries feel quite uneasy with regards to their gold holdings.

So instead of putting their complete faith in the words of the US government, countries feel that it’s safer to bring their gold home.

On top of countries requesting their gold back, nations around the world are trying to avoid the US dollar especially in a time of looming trade wars and hefty tariffs initiated by the United States.

Countries such as Russia and China constantly accumulate gold with the rumored plan to create a gold backed currency with the ambition to dethrone the United States as the reserve currency. Another country such as Iranhas recently issued a statement that it will also be moving away from the dollar and start using the euro as its official reporting currency.

Clearly, the lack of trust in the federal reserve system is not just with the libertarian crowd anymore, a growing number of countries continue to pull their gold holdings from U.S vaults and attempt to avoid the dollar. The big question is, is the United States reserve currency status soon to be in jeopardy?

END
Ronald Stoeferle on how cheap gold is right now
audio with Chris Martenson
(courtesy Chris Martenson/Ron Stoeferle)

Ronald Stoeferle: Gold Is Dirt Cheap Right Now

Authored by Adam Taggart via PeakProsperity,com,

…and a new bull market for the metal is beginning.

Fresh from releasing his exhaustive 230-page annual report titled In Gold We Trust, Ronald Stoerferle joins us to summarize his forecast for the yellow metal.

Stoerferle, an author of several books on Austrian economics and head of strategy and portofolio management at Incrementum AG, concludes that gold is extremely cheap right now in dollar terms. And he sees a new bull market beginning for the precious metal — one likely to quickly build momentum as the next (and long overdue) financial market correction arrives.

We’re at the beginning of a new stage of a bull market.

We’ve seen a massive correction with a big drawdown, but we’re now seeing the Commitment of Traders report suggesting that there’s been a washout. We’re seeing that sentiment is really negative. We’re seeing that nobody really cares about gold and mining stocks, and especially about silver. Silver is probably the biggest contrarian investment, though silver mining stocks are probably even more contrarian at the moment.

We all know that the herd behavior in the sector is getting more extreme. I think it has got to do with career risk in the financial industry, so nobody really wants to make a contrarian call. But once we go above this $1,360-$1,380 resistance, which is also the neckline of a large inverse head & shoulder formation, I think gold will hit $1,500, $1,600 pretty quickly.

The most important thing is: in comparison to all the monetary printing that we’ve seen in the last couple of years, gold got significantly cheaper. Gold, in monetary terms, is dirt cheap at the moment. We’re basically at the same levels like in 1971 when it comes to the gold backing of the US dollar. So gold is a bargain at this level.

Of course, we need some sort of catalyst. I think one of the main catalysts will probably be recession fears coming up and the greater volatility in equity markets that’s going to go hand in hand. And we’ll see it sooner or later.

We should not forget that stocks have been trading at or close to the all-time highs, that real estate has been doing really well, that bond markets have been doing well, that cryptocurrencies have been kind of stealing the show, that people regained trust in the financial system, in banks, and even in politicians. Inflation is not a big concern at the moment. We’re seeing rising rates and so on. Let’s face it: those things are not an extremely positive environment for gold. But still, it’s been doing pretty well.

If those headwinds become tailwinds, meaning that there will be some volatility kicking in in equity markets, that the bond markets start cracking, that people start losing trust in the system again — early indications of which it looks like we may be seeing here in 2018 — that’s going to be the point in time when gold will pick up momentum big time.

And the other big thing is that the whole world is increasingly trying to diversify out of the US dollar. We’re coming to a multipolar currency system sooner or later. That’s a long process. This year we’ve seen the introduction of the oil futures in Shanghai — that’s a really big development — volumes are enormous in Shanghai. Nobody would have expected that. And that’s just another nail in the coffin of the US dollar.

And, of course, all those countries that are trying to avoid the US dollar in their trade, they are big holders of gold. So I think within the course of the next crisis, I think there’s might chance of a revaluation of gold.

Click the play button below to listen to Chris’ interview with Ronald Stoeferle (49m:22s).

END

Craig Hemke states that the use of EFP is a fraud

(courtesy Craig Hemke/Sprott Money/GATA)

Craig Hemke at Sprott Money: EFP use for Comex gold is beyond belief

 Section: 

8:34p ET Tuesday, June 12, 2018

Dear Friend of GATA and Gold:

Writing at Sprott Money today, Craig Hemke of the TF Metals Report notes that since November the strange “exchange for physicals” mechanism has settled New York Commodities Exchange futures contract claims for more than 4,500 hundred tonnes of gold. This is almost double annual world gold production and five times the metal held by the vaults in the London Bullion Market Association system.

Hemke asks: “How is this even possible?

Hemke concludes: “In the end this shines light upon the deliberately opaque and fraudulent digital derivative pricing scheme and the system of unallocated and hyper-leveraged ‘physical delivery’ behind it.

“For now, the investment world accepts the risks associated with this arrangement. But some time soon the day will come when a holder of ‘gold’ — who mistakenly believes he owns actual, unencumbered physical metal with clear title and demonstrable provenance — is going to be told that he does not own anything of the sort. He will likely be surprised to learn that he owns simple gold ‘exposure’ in paper certificate form instead.”

Hemke’s analysis is headlined “Comex EFP Use Continues to Surge” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/comex-efp-use-continues-to-surge-craig-…

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



___________________________________________________________________

Your early WEDNESDAY 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 TO 6.4004  /shanghai bourse CLOSED DOWN 30.01 POINTS OR 0.89%     HANG SANG CLOSED DOWN 377.91  POINTS OR 1.22%
2. Nikkei closed UP 88.03 POINTS OR 0.38% /  /USA: YEN RISES TO 110.52/

3. Europe stocks OPENED MOSTLY GREEN  /     /USA dollar index FALLS TO 93.81/Euro RISES TO 1.1762

3b Japan 10 year bond yield: RISES TO . +.05/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.52/ 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:: 65.99  and Brent: 75.69

3f Gold DOWN/Yen DOWN

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

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

3h Oil DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.49%/Italian 10 yr bond yield DOWN to 2.79% /SPAIN 10 YR BOND YIELD DOWN TO 1.42%

3j Greek 10 year bond yield RISES TO : 4.51

3k Gold at $1294.15 silver at:16.90   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 30/100 in roubles/dollar) 62.79

3m oil into the 64 dollar handle for WTI and 75 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 110.52 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 0.9883 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1618 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.49%

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 2.95% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.08%

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

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

Futures Coiled As Traders Brace For Fed Rate

Hike

Bulletin Headline Summary from RanSquawk

  • European bourses have put in a mixed performance thus far (Eurostoxx 50 +0.2%) ahead of the FOMC rate decision
  • In FX, DXY eyes 94.00 to the upside ahead, GBP the G10 laggard following UK CPI
  • Looking ahead, highlights include US PPI, DoEs, FOMC rate decision and press conference

After yesterday’s surprisingly contained session, in which the priced-in Singapore summit made little impact on markets, so far today we have seen contained markets with little to note, as is usually the case in the pre-FOMC
session.

Commenting on the action so far this week, DB’s Jim Reid writes that:

“it might be a packed week for big events but so far it’s hard to argue that anything has gone against the grain. The US-North Korea Summit passed without barely moving the dial. Yesterday’s US CPI report was bang in line with expectations and the Brexit vote seems to have provided enough to keep all sides happy for now. Will the Fed this afternoon buck the trend and bring a bit of volatility and fizz back to markets?”

European markets rose, as did S&P futures as investors await today’s 2pm Federal Reserve 25bps rate hike, which the market sees as a 100% certainty.  Here is UBS’ Paul Donovan on today’s Fed action:

Today sees a new era dawning, with the US Federal Reserve expected to raise interest rates another quarter point. Rates of 2% are back to where we were almost 10 years ago. The Wall Street Journal reported that the Fed may hold a press conference every meeting. This would just bring the Fed into line with other central banks, and is probably not a policy signal.

The looming Fed rate hike came in tandem with a plethora of M&A newsflow overnight that began after a US judge ruled AT&T could proceed with its acquisition of Time Warner without any conditions imposed, which in turn underpinned several media and telecom names on the prospects of open M&A floodgates.

The dollar nudged rose to a 7 month high in advance of the higher US interest rate with Treasury yields, and emerging-market currencies extended a drop. The dollar strength was aided by a report that Trump said $80BN in agriculture purchase commitment from China was insufficient, rekindling the fear of potential trade wars. In related news, there were also comments from White House trade adviser Navarro that President Trump is planning to impose tariffs on a subset of China imports that were part of an initial list of around USD 50bln in goods, while reports also noted speculation this could be in place as soon as Friday.

Italian assets supported by further conciliatory comments from perceived eurosceptic Savona, while the Italian FTSE MIB rose +0.9%. Italian BTPs were supported from the open and also by solid long-end demand at today’s auction, conversely bunds pressured by surprisingly weak 10y auction; USTs hold in tight range, curve marginally flatter. Crude futures near yesterdays lows, still in reaction to yesterdays reports of Russian proposals for higher supply.

Earlier, Asian stocks traded subdued, with Japanese shares rose as the yen dipped, while equities fell in Hong Kong and Australia. Chinese shares also retreated, with ZTE Corp. plunging by its daily limit after it agreed to a $1 billion fine; Nikkei 225 (+0.4%) outperformed and was kept afloat by JPY weakness, while Shanghai Comp. (-0.9%) and Hang Seng (-1.2%) were lower amid expectations of a looming Fed hike and China to follow suit by raising rates on its repo and lending facilities.  Trade concerns also resurfaced as President Trump stated that $80BN agriculture purchase commitment from China and with trade adviser Navarro suggesting that Trump is to impose some tariffs on China.

The Bloomberg Dollar Spot Index rose to a seven-month high as investors speculated that the FOMC will hike the “dots” and signal that it will hike rates a total of four times this year. And as always when the DXY strengthens, emerging-market currencies came under pressure. In other global FX, EURUSD traded up 0.1% around 1.1760 amid light flows ahead of Thursday’s ECB decision where Draghi is expected to preview the end of QE.

  • USD/JPY holds near Asian session highs and above 200DMA; TRY much weaker after latest poll shows election risks possibly greater than expected.
  • Cable fell a fourth day to a session low and weakened against all major currencies amid political jitters even as U.K. CPI data matched estimates; the biggest increase in auto-fuel prices in more than seven years helped keep price growth from extending a three- month easing
  • The Aussie reversed losses after earlier edging lower following comments by RBA’s Lowe that a rate hike is still some way off
  • The Japanese yen fell 0.2% to 110.63 per dollar, a three-week low
  • Turkey’s lira fell as much as 2.2% to a three-week low as polls pointed to a close-run election

Euro-area bonds edged north and Treasuries steadied. Italian bonds gained amid an auction of new debt. The yield on 10-year TSYs declined one basis point to 2.95%; German 10-year bund yields dipped less than one basis point to 0.49% while Britain’s 10-year yield declined two basis points to 1.401%, the lowest in a week on the biggest fall in almost two weeks. Italy’s 10-year yield dropped 9bps to 2.769%, the lowest in more than a week.

Ahead of today’s FOMC rate hike, a China PBoC adviser said there is no need for the PBoC to follow Fed rate hikes in the long term. He added that the PBOC could still carry out small open market operations rate hike and that it was not necessary for China to lift the benchmark deposit and lending rates.

In other geopolitical news, North Korea said US President Trump agreed in summit to lift sanctions against North Korea and offer North Korea security, while North Korea also stated that US President Trump agreed to step-by-step denuclearization by the North in return for US concessions.

Commodities were subdued overnight amid a slightly firmer USD with WTI crude futures also hampered by an unexpected build in API crude inventories (+0.800M vs. Exp. -2.700M), with the pressure exacerbated on a break below USD 66.00/bbl and the prior session’s lows. This also came in the context of source reports suggesting Russia are to seek a rollback on oil cuts for most OPEC+ nations and propose OPEC+ share out 1.8mln bpd quota increase, with the plan said to leave 1mln bpd of involuntary oil cuts intact. In the metals scope Gold and base metals are all lower with traders tentative ahead of the FOMC’s rate decision later in the day.

On today’s calendar, in addition to the Federal Reserve rate decision, data points include the MBA mortgage applications and US PPI.

Market Snapshot

  • S&P 500 futures up 0.09% to 2,786.50
  • STOXX Europe 600 up 0.1% to 387.95
  • MXAP down 0.4% to 174.47
  • MXAPJ down 0.7% to 570.27
  • Nikkei up 0.4% to 22,966.38
  • Topix up 0.4% to 1,800.37
  • Hang Seng Index down 1.2% to 30,725.15
  • Shanghai Composite down 1% to 3,049.80
  • Sensex up 0.5% to 35,857.01
  • Australia S&P/ASX 200 down 0.5% to 6,023.53
  • Kospi down 0.05% to 2,468.83
  • German 10Y yield fell 2.0 bps to 0.471%
  • Euro down 0.03% to $1.1742
  • Brent Futures down 0.3% to $75.67/bbl
  • Italian 10Y yield rose 2.3 bps to 2.592%
  • Spanish 10Y yield fell 3.6 bps to 1.415%
  • Gold spot down 0.2% to $1,293.66
  • U.S. Dollar Index up 0.1% to 93.93

Top Overnight News from Bloomberg

  • President Trump’s summit with North Korea’s Kim Jong Un produced a historic handshake but all the work lies ahead, with no benchmarks for progress, follow-up meetings scheduled or agreement on what success would look like
  • Following his meeting with North Korean leader Kim Jong Un in Singapore on Tuesday, U.S. President Donald Trump says “there is no longer a nuclear threat” from the Asian country
  • Kim Jong Un said Trump offered to lift sanctions against his regime when they met, state media reported, a claim that contrasts with the U.S. president’s rhetoric that the economic strictures would remain
  • Trump returns to Washington to face what may be the biggest threat to his presidency. Special Counsel Robert Mueller is intent on quickly resolving a central issue with Trump’s legal team: whether the president will sit voluntarily for an interview in the probe of Russian election meddling, according to current and former U.S. officials
  • For a Fed meeting where a rate hike is seen as a given, the stakes are still huge. Investors have piled into front-end wagers and curve plays betting on the timing and pace of tightening in the second half of the year
  • Theresa May won a key vote on Brexit, staving off a revolt from the pro-European wing of her Conservatives after offering concessions that make it likely Parliament will get a greater say in the EU divorce process
  • Mario Draghi is holding what might be the most awkward ECB meeting in his tenure. The session in Riga will have a notable absentee. Latvian Governor Ilmars Rimsevics is fighting corruption allegations
  • Russia plans to propose that OPEC and its allies be allowed to return production to October 2016 levels, rolling back most but not all of their output cuts, according to a person familiar with Russian thinking
  • A slump in euro-area industrial production is adding to a spate of underwhelming economic data ahead of Thursday’s ECB meeting that may set the course for future stimulus
  • Italy sold a combined 5.6b euros worth of bonds amid a calmer market in the first major test of investor appetite this month. The auction saw strong demand across all tenors except the seven-year notes

Asian stocks traded subdued with participants tentative ahead of the looming FOMC decision later today. ASX 200 (-0.5%) was dragged by weakness in energy and financials, although upside was seen in APA Group which surged over 20% after Cheung Kong Infrastructure made an offer for the Co. valued at AUD 13bln. This was also in tandem with a plethora of M&A newsflow overnight that began stateside after a US judge ruled AT&T could proceed with its acquisition of Time Warner without any conditions imposed, which in turn underpinned several media and telecom names on the prospects of open M&A floodgates. Nikkei 225 (+0.4%) outperformed and was kept afloat by JPY weakness, while Shanghai Comp. (-0.9%) and Hang Seng (-1.2%) were lower amid expectations of a looming Fed hike and China to follow suit by raising rates on its repo and lending facilities. Today saw the resumption of trade for ZTE shares from a 2-month halt which hit limit down in Shenzhen and dropped around 40% in Hong Kong after agreeing to pay a USD 1.4bln penalty to the US, while trade concerns also resurfaced as President Trump stated that USD 80bln agriculture purchase commitment from China and with trade adviser Navarro suggesting that Trump is to impose some tariffs on China. Finally, 10yr JGBs were flat amid similar uneventful trade in T-notes and a tentative tone in riskier assets, while the BoJ Rinban announcement also failed to spur demand with the total amount at a reserved JPY 505bln.  PBoC injected CNY 60bln via 7-day reverse repos, CNY 40bln via 14-day reverse repos and CNY 30bln via 28-day reverse repos, for a net daily injection of CNY 70bln.

Top Asian News

  • Li’s CKI Attempts Biggest-Ever Deal With $9.8 Billion APA Bid
  • ZTE Dives After Agreeing to $1 Billion Fine and Major Revamp
  • Ezion Falls After Converting Bonds to Shares at Discounted Price
  • China Is Said to Ease Some Curbs on Coal Imports, CCTD Reports
  • Philippine Central Bank Moves Policy Meet a Day Early to June 20

European bourses have put in a mixed performance thus far (Eurostoxx 50 +0.2%) ahead of the FOMC rate decision. The outperforming index is currently the FTSE MIB (+0.9%), with the IBEX flat following disappointing earnings from index heavyweight Inditex. The approval of AT&T’s merger with Time Warner by a US judge, is an event in focus by traders, as this could lead to M&A follow through, with specific focus on Sky and Deutsche Telekom. Glencore (+2.6%) has seen the resolution of Gécamines’ litigation in DR Congo following the writing off of USD 5.6bln in their subsidiary Katanga Mining. Dixons Carphone (-4%) is the latest co. to be hit by a data breach, with 105k payment cards compromised, and 1.2m records containing non-financial personal data.

Top European News

  • Dixons Says Almost 6 Million Cards Targeted in Cyberattack
  • Former BNP Gilts Trader Sues Bank After Being Fired for Bullying
  • Draghi Set to Boost Euro, Weigh on Bonds as Political Risks Dim
  • Russia Is Said to Seek Oil-Cuts Rollback for Most OPEC+ Nations
  • Hedging the Euro Before ECB Meeting is Most Expensive Since 2016

In FX, the DXY is hovering just below 94.000 and looking for anything further to keep the momentum going from the FOMC beyond an already factored in 25 bp hike. GBP: The G10 laggard, and once again undermined by UK data to a degree as CPI remained unchanged in May (m/m and y/y) vs some expectations for an uptick. Cable was drifting down towards 1.3300 as a result, before trimming losses ahead of the 2nd day of Brexit bill debate and voting before attention turns to the Fed. JPY/CHF/CAD: All extending recent loss vs the Dollar as Usd/Jpy finally soaks up all offers around 110.50 to trade up at 110.70 and technically through another key resistance level (110.62 Fib), while Usd/Chf is back in the upper end of a broad 0.9850-0.9900 band after mixed Swiss data (y/y PPI firmer than previous, but industrial orders slowed markedly). The Loonie is back under pressure and sub-1.3000 again vs its US counterpart as the NA disharmony continues to impact, and 1.3050 is the next upside chart target in sight. EUR: Holding around 1.1750 vs the Usd amidst expectations that the ECB will live up to recent more hawkish impulses (via sources and GC officials) tomorrow, but also checked by very large option expiries ranging from 1.1700-1.1800 and just above.

Commodities were subdued overnight amid a slightly firmer USD with WTI crude futures also hampered by an unexpected build in API crude inventories (+0.800M vs. Exp. -2.700M), with the pressure exacerbated on a break below USD 66.00/bbl and the prior session’s lows. This also came in the context of source reports suggesting Russia are to seek a rollback on oil cuts for most OPEC+ nations and propose OPEC+ share out 1.8mln bpd quota increase, with the plan said to leave 1mln bpd of involuntary oil cuts intact. In European trade, oil broke back above the USD 66.00/bbl level in the wake of the IEA monthly report forecasting stable oil demand, as well as Iranian and Venezuelan oil output possibly falling by almost 30%. The fossil fuel is still negative for the day, however, at USD 66.20/bbl. Further news in the oil sector emanated from the Kremlin with Russian President Putin not planning to discuss an exit from the global oil output deal with Saudi Crown Prince at their World Cup meeting. In the metals scope Gold and base metals are all lower with traders tentative ahead of the FOMC’s rate decision later in the day.

Looking at the day ahead, all eyes will be on the Fed when we get the outcome of the FOMC meeting, followed closely by Fed Chair Powell’s statement and presser. Prior to that we get the May PPI report in the US, while in Europe we’ll get May CPI / PPI / RPI prints out of the UK (core CPI of 2.1% yoy expected) and the final reading of Spain’s CPI. April industrial production for the Euro area is also due. Elsewhere, the BOE’s Kashyap will speak in London.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 4.1%
  • 8:30am: PPI Final Demand MoM, est. 0.3%, prior 0.1%; PPI Ex Food and Energy MoM, est. 0.2%, prior 0.2%
    • PPI Final Demand YoY, est. 2.8%, prior 2.6%; PPI Ex Food and Energy YoY, est. 2.3%, prior 2.3%

DB’s Jim Reid concludes the overnight wrap

It might be a packed week for big events but so far it’s hard to argue that anything has gone against the grain. The US-North Korea Summit passed without barely moving the dial. Yesterday’s US CPI report was bang in line with expectations and the Brexit vote seems to have provided enough to keep all sides happy for now. Even my birthday celebrations passed without a hiccup notwithstanding the impact of one glass of bubbly at home last night. Will the Fed this afternoon buck the trend and bring a bit of volatility and fizz back to markets?

Well a 25bp hike is as good as given so that won’t be the shock but what our US economists also expect is the FOMC to drop its forward guidance language, which will advance the Fed another half-step along the path of policy normalization. Our colleagues believe the time has come to phase out the commitment to hold rates low for longer given that rates are now significantly above the zero bound and the Fed’s dual mandate has essentially been achieved.

Away from that they also expect the post-meeting statement to convey a modestly more upbeat message on domestic activity. Indeed changes to the summary of economic projections will likely include further reductions in unemployment, rate projections and slightly higher inflation, but their best guess for the 2018 median fed funds dot is that it remains at three, at least for now. Market pricing is fairly split between 3 and 4 hikes this year so it probably doesn’t require a hawkish signal to correct a mispricing. It’s worth noting that our economists are still pegged at 4 hikes by the end of the year.

As for the press conference, the team expect Powell to take note of solid prospects for aggregate demand growth given significant fiscal stimulus, the tightening labour market with prospects for more to come, gradual increases in wage inflation (such as ECI) and PCE inflation nearing target. On the downside, Powell should note that some downside risks have arisen associated with Italy and trade policy. Any mention of policy outlook will likely include reference to further gradual rate increases being in order and a summary of the median SEPs and dots. As an aside, it’s worth noting that a CNBC article which came out on Sunday suggesting that the Fed could have a surprise in store for today’s meeting has turned a few heads. The crux of the story was that the Fed could announce that it is bringing forward the date at which it aims to stop reducing its balance sheet to as soon as next year depending on financial conditions.

Finally on the Fed there was a story last night that they are considering a press conference every meeting instead of quarterly. The story gathered a fair bit of interest without making much difference to markets. The perception is that it wouldn’t change the Fed’s path but might slightly change their exact route and create a bit more volatility around what were previously non-presser meetings.

As for markets, they go into the Fed meeting coming off the back of a fairly unexciting last 24 hours of price action which reflects all the big events going to plan so far. The S&P 500 eventually finished last night +0.17% higher with the Nasdaq (+0.57%) closing at a new record high, while in Europe the likes of the Stoxx 600 (-0.11%), DAX (unch.) and FTSE (-0.43%) weakened slightly, weigh down by energy and materials stocks. Treasuries were only modestly weaker with the 10y back up +0.9bps while Bunds were little changed (-0.2bp). 10 year BTPs finished +1.3bps which is the smallest one-day move for 13 days. It’s worth noting that the BTP 365-day bill sale passed without any hiccups however today is likely to be a bigger test with an auction of 3-year, 7-year and 30-year bonds due. Meanwhile the US dollar index firmed for the third straight day (+0.22%) while EM currencies outside of the Turkish Lira (-1.63%) were a lot calmer. Finally, wheat prices jumped 3.9% after the USDA trimmed its outlook for Russian wheat production while Australia also lowered its domestic output estimate.

Overnight sentiment in Asia is mixed with the Nikkei up +0.42% as the YEN dipped, while the Hang Seng (-0.62%), Shanghai Comp. (-0.75%) and ASX200 (-0.69%) are down modestly as we type. Elsewhere, the US District Court has cleared AT&T’s US$85bn takeover of Time Warner after rejecting the Justice Department’s request for an order blocking the proposed deal. Reuters noted the approval could lead to further M&A activity in the media sector. After the bell, Time Warner and Twenty-First Century Fox’s share price was up 4.5% and 7% respectively.

Back to yesterday where the afternoon’s US CPI report threw up no real surprises as mentioned at the top after core CPI printed at +0.2% mom for May and so helping to push the annual rate up to +2.2% yoy and the highest since February 2017. Both of these were in line with expectations. The 3 decimal place core print was +0.171% mom so if you were leaning one way or the other then it was a touch on the softer side but certainly not enough to move the dial. The 3-month annualized rate of core CPI was steady at 1.8% while the six-month rate nudged up to 2.5%. Overall, the data certainly fits the narrative that core inflation has risen back towards the Fed target but isn’t showing signs of running away at the moment.

Elsewhere the UK government won a crucial Brexit vote in the House of Commons, with the UK’s lower house rejecting an amendment put forward by the upper house (House of Lords) that would require the government to accept the direction of Parliament in the event that no deal was reached with the EU27. To win the vote they offered Parliament a lot of influence/oversight over the negotiations. DB’s Oli Harvey believes that while there are risks certainly still out there this is further evidence of a shift towards a softer Brexit. There is clearly no parliamentary majority for a hard (either Canada or WTO-based) Brexit deal and this vote makes that difficult to sign off. This expected move from our FX guys is one factor behind our bullish sterling recommendation from earlier this year. Sterling rallied as much as 0.4% following the vote, but pared back gains throughout the day to close marginally lower (-0.05%).

As for the US-North Korea Summit, well in a nutshell it was big on optics but light on details which was enough to keep the market happy. A twopage document was signed in which both leaders committed to “complete denuclearization of the Korean Peninsula” albeit within an undefined timeframe and without a defined path. Perhaps the most significant part of the meeting was just after it ended when China announced support for revising economic sanctions against North Korea. President Trump also said that the US would suspend military exercises with South Korea although troops are set to remain in the peninsula. President Trump himself called the meeting “a very great moment in the history of the world” and was full of praise for North Korea Leader Kim Jong Un, saying that the two have formed “a very special bond”. He also said that Kim is a “talented man” and a “worthy negotiator”. Compare that to how Trump felt at the end of the G7 meeting at the weekend when he tweeted that Trudeau was “meek and mild” and “dishonest and weak”. Who would have thought the leader of the US could on paper have a better relationship with the leader of North Korea than the equivalent at their closest neighbour Canada.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the May NFIB small business optimism index was above market at 107.8 (vs. 105 expected) – marking a fresh record high since September 1983. Firms indicated that they were more optimistic about the economy, with a record 34% of firms believing it to be a good time to expand.

Meanwhile, the May monthly budget statement was slightly wider than expected at -$146.8bln (vs. -$144bln) – the largest deficit for the month of May since 2009. In the UK, the April unemployment rate was steady mom and in line at 4.2%, which remains the lowest print since 1975. The headline average weekly earnings growth was in line at 2.5% yoy, but the ex-bonus growth slowed to 2.8% yoy (vs. 2.9% expected). In Germany, the June ZEW survey current situations index was below consensus at 80.6 (vs. 85 expected) while the expectations index for Germany (-16.1 vs. -14 expected) and the Eurozone (-12.6 vs. 2.4 previous) were both below market, in part due to the recent Italian politics and trade uncertainties.

Looking at the day ahead, all eyes will be on the Fed when we get the outcome of the FOMC meeting, followed closely by Fed Chair Powell’s statement and presser. Prior to that we get the May PPI report in the US, while in Europe we’ll get May CPI / PPI / RPI prints out of the UK (core CPI of 2.1% yoy expected) and the final reading of Spain’s CPI. April industrial production for the Euro area is also due. Elsewhere, the BOE’s Kashyap will speak in London.

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 30.01 points or 0.97%   /Hang Sang CLOSED DOWN 377.91 points or 1.22%    / The Nikkei closed UP 88.03 POINTS OR 0.38% /Australia’s all ordinaires CLOSED DOWN .51%  /Chinese yuan (ONSHORE) closed UP at 6.4004/Oil DOWN to 65.99 dollars per barrel for WTI and 75.69 for Brent. Stocks in Europe OPENED MOSTLY IN THE GREEN//.  ONSHORE YUAN CLOSED UP AT 6.4004 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3929/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING MUCH STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

3 a NORTH KOREA/USA

North Korea/South Korea/usa

Trump will probably not like this:  North Korea claims that Trump folded to Kim demands  such as the war games and to agree to lift sanctions.  He agreed with the former demand but not the latter

(courtesy zerohedge)

North Korea Claims Trump Folded To Kim Demands, Agreed To Lift Sanctions

Right around the time Air Force 1 returned back in the US from Trump’s Singapore summit trip, just before 6am EDT, the president tweeted that “everybody can now feel much safer than the day I took office. There is no longer a Nuclear Threat from North Korea.” He added that the “meeting with Kim Jong Un was an interesting and very positive experience. North Korea has great potential for the future!”

He then followed up by taking aim at his predecessor, tweeting that “President Obama said that North Korea was our biggest and most dangerous problem. No longer – sleep well tonight!”

Donald J. Trump

@realDonaldTrump

Just landed – a long trip, but everybody can now feel much safer than the day I took office. There is no longer a Nuclear Threat from North Korea. Meeting with Kim Jong Un was an interesting and very positive experience. North Korea has great potential for the future!

Donald J. Trump

@realDonaldTrump

Before taking office people were assuming that we were going to War with North Korea. President Obama said that North Korea was our biggest and most dangerous problem. No longer – sleep well tonight!

Trump’s ongoing victory lap was marred, however, overnight when North Korean state media, KCNA, reported that Kim Jong Un said Donald Trump offered to lift sanctions against his regime when they met Tuesday in Singapore, a claim which contradicts Trump’s previous statements that the economic strictures would remain.

The KCNA report which was published after Kim returned home from his meeting, noted Trump’s vow to suspend U.S. military drills in South Korea. It also said Trump committed to unspecified “security guarantees” for Pyongyang, and to “lift sanctions against it.”

As Bloomberg notes, the last point was noteworthy since it went further than Trump did in his public comments during and after the meeting. Specifically, while Trump said he would end “war games” with South Korea, the US president said sanctions would stay until the isolated nation moved to give up its nuclear arsenal. Speaking of the end to joint “war games”, Trump also tweeted on Wednesday morning that “we save a fortune by not doing war games, as long as we are negotiating in good faith – which both sides are!

Donald J. Trump

@realDonaldTrump

We save a fortune by not doing war games, as long as we are negotiating in good faith – which both sides are!

Meanwhile there have been slight differences in recent comments among senior U.S. officials as to whether that means North Korea must first complete denuclearization – and have it verified – or if some goodwill steps would be enough.

Trump himself indicated some wiggle room, saying sanctions relief could come even before the “complete denuclearization of the Korean Peninsula” — however that’s ultimately defined by both sides — is verified. “I hope it’s going to be soon,” he said Tuesday at an hour-long briefing. “At a certain point, I actually look forward to taking them off.”

Adding to the potential confusion, KCNA also portrayed Trump as having given in to Kim Jong-un’s “demand” of suspending military drills.

Yonhap News Agency@YonhapNews

(URGENT) Kim demands suspension of U.S.-S. Korea military drills, Trump understands: KCNA http://yna.kr/p2N1aEODAbb

(URGENT) Kim demands suspension of U.S.-S. Korea military drills, Trump understands: KCNA

english.yonhapnews.co.kr

While clearly at least part propaganda, the statement could spell trouble for Trump if it is perceived that North Korea now has the upper hand in negotiations with the US. The White House has not yet responded to a Bloomberg request for comment on the KCNA report.

To be sure, there is the possibility that this is just a lost in translation moment:

Trump several times said there were things he and Kim talked about, and agreed on, that were not contained in the formal document. That included the U.S. decision to halt its drills, although it’s unclear which ones and for how long. Trump added that Kim told him separately that North Korea had dismantled a missile engine test site. So if any promises were made on sanctions, they were not made publicly.

Meanwhile, Trump faces Japanese pressure to keep sanctions in place, and a push by China to lift them. A Chinese official already signaled the country may ask the United Nations to lift or adjust the penalties, the basis for the “maximum pressure” campaign Trump has used to push Kim toward disarmament. China, as North Korea’s neighbor and most important trading partner, also could provide relief to Kim by throttling down sanctions enforcement on its own.

The main crossing point from China into North Korea is the city of Dandong. About 80 percent of North Korea’s international trade is with China, much of it through the frontier city filled with shopkeepers, smugglers and real-estate dealers whose fortunes rise and fall with the trade across the Yalu River.

The real question will be whether N. Korea suddenly feels empowered to boast about having “triumphed” over Trump, and now feels comfortable enough to declare that it is setting the tone of negotiations. If that is indeed the case, even with Chinese support, it is unlikely that Trump will play along too long, and there is the all too real risk that all the goodwill that was built up on Tuesday evaporates with just one angry Trump tweet as we revert back to square one.

END

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA/HONG KONG

ZTE crashes once it was opened for trading and it fell 40% and limit down in China.  Then Trump announces all deals are off with China and should be put ZTE into the morgue

(courtesy zerohedge)

ZTE Crashes Almost 40% After HK Trading Resumes, Limit-Down In China

Almost two months since ZTE was halted on news that the US government had dealt the firm a “death sentence”banning the tech giant from buying US parts (due to breaking Iran sanctions – and spying allegations), the telecoms company has resumed trading in Hong Kong – down 37.5% at the open

The White House announced the initial ban on ZTE buying parts from US firms in April, after the company was found to have violated a settlement originally imposed over ZTE’s sales to Iran in defiance of US sanctions. As part of the original settlement, ZTE had agreed to fire certain senior managers and withhold bonuses from others. But the company didn’t follow through with either promise.

ZTE

Then last Thursday shortly after Commerce Secretary Wilbur Ross announced the administration had worked out a deal to save ZTEwhich meant the company would pay a penalty of $1.3 billion (plus place another $400 million in escrow to be seized should the company again fail to hold up its end of the bargain). The company would also be forced to accept – and pay for – a team of compliance officers that will be led by a “special independent compliance coordinator” who will report jointly to ZTE’s CEO, its board and the Commerce Department. The company will be forced to pay for the monitors for ten years. The company will also be required replace its entire board of directors and senior leadership team. In exchange, ZTE will resume buying products from US firms.

And today the share start trading again…

Furthermore, in Shenzhen, ZTE is limit-down 10% (China’s post-crisis rules) – halted for the rest of the day.

h/t @YuanTalks

However, as we detailed earlier, we wouldn’t be holding our breath as a group of senators have successfully attached an amendment that would effectively kill the Trump administration’s deal with Chinese telecoms firm ZTE to a “must-pass” defense authorization bill, according to Axios– the latest sign that the movement to kill the deal is gaining momentum, even among Republicans who rarely oppose the president… and would reimpose the White House’s original ban on ZTE buying components from US firms (what some have described as a “death sentence” for the company).

end

This is not good for the global trade picture:  Chinese shadow bank lending unexpectedly crashes last month to a two year low

(courtesy zerohedge)

Chinese Shadow Bank Lending Unexpectedly Crashes, Sending Total Credit Creation To Two-Year Low

According to most flow-tracking economists (and not their clueless, conventionally-trained peers) when one strips away  the noise, there are just two things that matter for the global economy and asset prices: central bank liquidity injections, and Chinese credit creation. This is shown in the Citi charts below.

And if indeed it is just these two variables that matter, then the world is set for a turbulent phase because while global central banks liquidity is set to reverse a decade of expansion, and enter contraction some time in Q3 as the great “liquidity supernova” begins draining liquidity for the first time since the financial crisis…

… the latest Chinese credit creation data released on Tuesday, added significantly to the risk of a “sudden global economic stop” after the PBOC reported that in May, China’s broadest monetary aggregate, the Total Social Financing, just posted it smallest monthly increase since July 2016, confirming that Beijing’s shadow deleveraging campaign is accelerating and gaining even more traction, even if the threat of a global deflationary spillover is rising by the day.

A quick look at the numbers reveals that there was not much of a surprise in traditional new RMB loans, which rose RMB1150bn in May, slightly below consensus RMB1200bn, growing 12.6% yoy in May.

However, it was the sharp, unexpected plunge in Total social financing growth, which attracted attention and which rose only RMB 760.8bn in May, almost half the consensus print of RMB1300bn, and sharply below April’s RMB1560bn increase.

Of the main TSF components, the drop in shadow bank lending was particularly sharp: this has been the area where Beijing has been most focused in their deleveraging efforts as it’s the most opaque and riskiest segment of credit. And, as the chart below show, the aggregate off balance-sheet financing posted its biggest monthly drop on record in May.

As Bloomberg’s Fielding Chan noted, in contrast to the sudden collapse in shadow banking liabilities, bank loans were relatively stable, even though the expansion in outstanding credit slowed further, implying a slightly heavier drag on growth.

Indeed, the lass granular M2 reading also posted a growth slowdown, rising only 8.3% in May, unchanged from April, and below the 8.5% consensus estimate.

Commenting on the ongoing slowdown to China’s credit creation, Goldman said that May money and credit data are the result of a tug of war between two forces:

  • On the one hand, the PBOC adopted a looser monetary policy stance, which provided more ample liquidity to financial institutions.
  • On the other hand, the financial regulators kept tight controls, which depressed non-RMB loan credit supply, while the recent surge in corporate defaults probably made financial institutions more cautious as well. ril.

Still, while previously Chinese credit had an marked, if delayed, impact on the economy, the relationship between monetary variables and real activity variables has become unstable over the past 2 years, as Morgan Stanley noted recently. This has been affected by a number of factors such as: stronger exports and consumption, both of which are less debt dependent than investment; rapid financial innovation in terms of payment and deposit systems; and the changing structure of credit, which has different impacts on the “real economy”.

Given all these changes, Goldman notes that it’s hard to know the right level that is consistent with the desired level of activity growth. The government has adopted a “tweak as you go” policy. The level of broad credit growth is likely to be viewed as being at the low end of the suitable range, and authorities may take some measures to prevent it from falling to a lower level, especially given the ongoing trade dispute is already posing downside risks to growth. Such measures could include further RRR cuts.

Alternatively, how much longer can China, and the world, keep ignoring the all-important slowdown in Chinese credit? To be sure, the economy has been surprising resilient this year, buoyed in part by solid global demand. Bloomberg’s view is that growth will slow in 2H, as headwinds from credit, slowing exports, and a cooling property sector become stronger.

Meanwhile, the push to curb credit growth even as risks from trade tensions with the U.S. rise suggests strong determination to deleverage the economy.

Finally, the risk is that China hikes too far as it keeps in line with the Fed’s own rate hikes: we expect that PBOC will increase its interest rate by 5bps later today, as well as tighten its reverse repo and MLF facility, after the Fed hikes by 25bps. How much higher can China afford to rise rates, and slow its economy, as it tries to prevent capital flight toward the US. We will find out as soon as the market realizes that between central banks and China, there is virtually no new liquidity creation.

end

this ought to help markets around the world:  Trump will slap China with tens of billions in tariffs by Friday according to the Wall; Street Journal

(courtesy zerohedge)

Trump To Slap China With Tens Of Billions In Tariffs As Early As Friday: WSJ

While trading desks are scrambling to goalseek the Fed’s clearly hawkish statement into a dovish speech by Powell, in order to keep the Koolaid flowing at least a bit longer and stem today’s bloodletting, one potential catalyst that could send the dollar even higher is a confirmation from the WSJ of what Politico and we reported earlier today, namely that the Trump administration, deepening its global trade offensive, is set to levy tariffs on tens of billions of dollars of Chinese goods in the coming week, perhaps as early as Friday—a move that is likely to spark heavy retaliation from Beijing.

What the WSJ adds to what we already knew, is that Trump’s mind was already made up last week:

Senior trade officials in the White House, Commerce and Treasury departments, and the U.S. Trade Representative’s office met on the issue before President Donald Trump went to a summit of the Group of Seven industrialized nations in Canada on Friday, and agreed that the U.S. should move ahead with tariffs, said U.S. officials and others briefed on the talks.

While the odds are minimal, there is a chance that Trump will nix an escalation in the trade war: as the WSJ notes, “Trump still hasn’t given his final approval and could have second-thoughts about applying heavy pressure on China”, perhaps because “the U.S. wants Beijing’s cooperation in its efforts to get North Korea to give up its nuclear weapons.”

We doubt it. As we said earlier, “China was seen as playing a key role in getting North Korean leader Kim Jong Un to the table with Trump, who has consistently linked his trade demands to Beijing’s willingness to help on North Korea; now that the summit is over and the wheels are turning, Trump no longer needs China’s aid.

And in his populist approach of focusing on his campaign promises and in hopes of distracting from the Mueller probe, Trump will do what he is confident will lead to more popular support: escalate the war with China at a time when the US economy is supposedly humming along.

So how big will be the next trade war round?

While the exact amount of goods subject to tariffs is still being finalized, the administration’s list was initially $50 billion in goods, and it is being refined as some products are taken off the list and others are added, following a public comment period.

But what is perhaps most notable is that as the WSJ highlights, “the agreement by the heads of the agencies represents an unusual moment of consensus on trade” in an administration often at odds with itself over how to proceed.

Trade hawks in the administration want to crack down hard on China, while globalists are seeking compromise.

If the WSJ report is accurate, this time even the globalists want to take on Beijing.

In other words, Gary Cohn resigned for nothing…

end

4. EUROPEAN AFFAIRS

A good look at the EU once the ECB stops its QE

(courtesy Daniel Lacalla/DLacalle.com)

Prior Reuters photo of smoke rising from a warehouse of the World Food Program as fire engulfed it in Hudaydah, Yemen, March 31, 2018.

Reuters reports the following breaking updates:

  • “concentrated and intense” bombing near the port itself.
  • 30 air strikes hit the city within half an hour.
  • Houthis say they hit a coalition barge
  • Port is main route to feed 8.4 million on verge of famine
  • “Some civilians are entrapped, others forced from their homes.”
  • Arab warplanes and warships pounded Houthi fortifications to support ground operations by foreign and Yemeni troops massed south of the port of Hodeidah in operation “Golden Victory”.
  • Ground battles raged near Hodeidah airport and al-Durayhmi, a rural area 10 km (6 miles) south of the city

Though Saudi and coalition authorities have long imposed a media blackout on Yemen which has resulted in little on the ground footage of the war, some early footage of the ground assault has emerged on pro-Saudi social media:

الحديدة مباشر@HdeidahMubasher

عاجل | فيديو مباشر: بإسناد القوات المسلحة الإماراتية القوات المشتركة تقترب من مطار الحديدة

Early footage of Saudi-UAE coalition troops mustering outside of the contested port city:

حراس الجمهورية@Huras_Aljmhuria

بالفيديو: ألوية بانتظار ساعة الصفر لتنفذ العملية الكبرى لتحرير مدينة الحديدة

Ali Özkök@Ozkok_

These are the troops that makes storm today -held coast city in west . Via @StrategicNews1 pic.twitter.com/zZEzz57KId

Gulf-aligned media coverage from lead-up to the assault claiming the coalition is thwarting “Iranian weapons” and militants in Hudaydah:

الحديدة مباشر@HdeidahMubasher

ميناء الحديدة منفذ ميليشيات الحوثي لاستلام الأسلحة والصواريخ الإيرانية
ألوية حراس الجمهورية والقوات المشتركة تقطع شريان طهران في الحديدة وتحدث خسائر فادحة لميليشيات الحوثي في مديرية الدريهمي والحاح

Iranian media reports civilians killed and wounded from the start of coalition aerial bombardment:

View image on TwitterView image on TwitterView image on Twitter

Press TV

@PressTV

At least four civilians killed in Saudi air strikes on Yemeni port city of Hudaydah

As we reported earlier this week, the UN and Red Cross evacuated all personnel days before the assault on the major Yemeni port through which 80% of all humanitarian aid to the war-torn country flows.

The city of half a million people is one of the sole lifelines of support from the outside world, thus analysts are predicting this to be a catastrophe for the country’s civilian population in a war which TheNew York Times notes is already “classified as the world’s worst humanitarian disaster with “more than 75 percent of the population… dependent on food aid”.

Doctors Without Borders (MSF) has also suspended operations in parts of the country after a Saudi coalition air raid on a cholera treatment center it supports. Cholera has made a comeback and ravaged the population in the midst of the grinding war and is expected to explode further now that Al Hudaydah port is inaccessible to aid and medical groups.

UN Geneva

@UNGeneva

As many as 250,000 people “may lose everything” in case of a military attack on ‘s key port city Hodeidah, as the country’s humanitarian crisis remains the worst in the world. Watch @UNOCHA‘s @JensLaerke brief press in Geneva today.

The UN has attempted negotiations with both sides to cede temporary humanitarian control over the vital port.

MSF Yemen

@msf_yemen

1/4 @MSF Treatment Center is a and not a military target. Health facilities have been regularly bombed in since 2015, including MSF hospital, bombed on 15 August 2016, killing 19 people.

The Saudi-US military coalition currently besieging the country through airstrikes and sea blockade claims Al Hudaydah is a key arms smuggling point through which Iran supplies the Shia Houthis, including sophisticated ballistic missiles which have hit locations inside Saudi Arabia within the past year

The US has tried to present itself as trying to stave off humanitarian catastrophe in Al Hudaydah, yet as NPR’s Steve Inskeep confirmed while reporting from Yemen earlier this year the US military “has provided targeting information, equipment and aircraft refueling to the Saudi air campaign, which has been widely criticized for being indiscriminate and killing civilians in places like hospitals, funerals and homes.”

Secretary of State Mike Pompeo earlier this week framed the US role as desiring “to address their security concerns [Saudis, UAE, and pro-Saudi Yemeni government in exile] while preserving the free flow of humanitarian aid and lifesaving commercial imports,” according to a statement.

Yet the Wall Street Journal has characterized the US role in the new operation as actually “deepening” as US intelligence will provide “information to fine-tune the list of targets”. So Pompeo’s mention of “security concerns” obviously constitute a green light

While this “deepening” role is supposedly to keep the UAE and Saudis on good behavior, its really a propaganda move to give the American role a fig leaf of “humanitarian” motives.

As Moon of Alabama blog noted in the lead-up to Wednesday’s assault on Hudaydah port:

The genocide in Yemen is going to start tomorrow. Eight million are already on the brink of starvation. Eighteen out of twenty-six million Yemenis live in the mountainous heartlands (green) which are under control of the Houthi and their allies. They are surrounded by Saudi and U.A.E. forces and their mercenaries. There is little agriculture. The only supply line from the outside world will soon be cut off. The people will starve.

UAE forces are especially reported to be taking a lead role in operations. As we detailed last year, the Saudi coalition has largely relied for its ground operations on UAE officers commanding a largely mercenary forces, with most of the ground troops coming from Sudan

Indeed many of the file photos currently featured by the NYT, AP, and others appear to confirm the heavy use of mercenary ground forces from north Africa:

NYT Opinion

@nytopinion

Yemen, devastated by a war that has killed 10,000 people, needs an internationally-backed peace process not a major new attack by U.S.-backed Arab allies on the port of Hudaydah, a vital entry point for humanitarian aid https://nyti.ms/2sSUzs9

Sudanese forces fighting alongside the Saudi-led coalition in Yemen pressed toward Al Hudaydah on Tuesday.

Opinion | On the Brink of Disaster in Yemen

A Saudi attack on the port of Al Hudaydah could be a lifeline for humanitarian aid the country depends on.

nytimes.com

Meanwhile, the Saudi ambassador to the US, Prince Khalid bin Salman, claims the Houthis have attacked multiple commercial and military shipsaccording to pro-Saudi Al-Arabiya:

The Houthi militia in Yemen have attacked commercial and military ships, including ships belonging to Saudi Arabia, the UAE, the US, using advanced anti-shipping systems smuggled into Yemen. 

For their part, the Houthis appear to have confirmed their ground forces launched a missile attack on a Saudi naval vessel, according to Middle East based Al Masdar news.

The ambassador further blamed Iran for militarily backing the insurgents: “The liberation of Hodeidah is critical in light of the growing threat that the Iranian backed Houthi militia poses to the maritime security of the red sea, a vital waterway through which about 15% of international commerce passes,” he said.

Because of the complete media and humanitarian blockade on the contested port city, confirmation of the rapidly unfolding events have been hard to come by.

This is a developing story.

end

8. EMERGING MARKET

SOUTH AFRICA/ISRAEL

With White Farmers being threatened on losing their farms to the black, Israeli commandos are training them to defend their lands.

(courtesy zerohedge)

Israeli Commando Trains White South African Farmers In “Krav Maga” As Violent Attacks Soar

South Africa has been freed from the death grip of former President Jacob Zuma, whose tenure at the head of the government was marred by years of corruption scandals and allegations of abuse of power. But the country’s wealthy landowners might soon find themselves wishing for a return to the bad old days as Cyril Ramaphosa, the country’s new president, moves ahead with his plan to heal “the original sin” from South Africa’s colonial past by redistributing land (without compensation) from wealthy white farmers to poorer black farmers.

What’s worse, the country’s economic malaise has been exacerbated by a severe drought that until recently had left Cape Town, the country’s largest city, only months away from “Day Zero” – the point at which the government would need to seriously intensify its water-rationing efforts as the city struggles with its worst drought in a century (fortunately, early rationing efforts have managed to push the crisis point back until 2019, though that could easily change).

Amid threats from government politicians that “the time for reconciliation is over”, there were 74 farm murdersand 638 attacks primarily on white farmers last year, according to minority rights group AfriForum.

“Current murder tendencies indicate that we will lose more people on farms than in the past three years,” AfriForum’s Ian Cameron recently wrote.

So with South Africa coming ever closer to resembling the dystopian hellscape from the popular sci-fi movie series “Mad Max”, white South African farmers are faced with two unpalatable choices:

1) Give everything up and seek asylum in Australia

After those threats from Malema and Ramaphosa – and on the back of Australia’s offer, RT reports this week that more than 200 farmers from South Africa have applied for humanitarian visas in Australia after allegedly suffering attacks for being white, according to the Australian Home Affairs Ministry.

“The type of criteria they of course have to meet – or the key one – is evidence of persecution, so that’s exactly what we will be looking at,” Home Affairs Deputy Secretary Malisa Golightly said.

Home Affairs said 89 refugee visa applications relating to 213 people had been received, although they did not specify their ethnicity or any other details.

or

2) Stand and Fight!

Sky News is reporting that White South African farmers – who are facing the brunt of the president’s “land redistribution” efforts amid a surge in violent attacks against them – are employing an Israeli self-defense expert to teach them survival techniques.

Sky News

@SkyNews

Some white farmers in South Africa feel so under threat that they are learning self-defence from an ex-Israeli special forces member in case they are targeted

The training is being led by Idan Abolnik, a former Israeli special forces commando, who is teaching farmers hand-to-hand combat and weapons handling.

South

Abolnik’s program costs about 20,000 rand (roughly $1,500) per person for an intensive two-week training course. During the course, Abolnik teaches the farmers Krav Maga, a self-defense system developed by the Israeli Defense Force that has become increasingly popular abroad.

“It’s open to everyone and anyone who wants a specially designed system for farmers. We train them to deal with a variety of different attacks,” Abolnik said during an interview with South Africa’s News24 TV channel.

Despite being a minority in South Africa, white farmers own upwards of 70% of the country’s farmland. Simmering resentments over the country’s Apartheid past have inspired the new government, led by President Cyril Ramaphosa, to announce a plan to redistribute land to more black farmers – a plan that bears a disturbing resemblance to neighboring Zimbabwe’s actions in the late 1990s that plunged that country’s economy into chaos.

end

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

Euro/USA 1.1762 UP .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:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES MOSTLY GREEN /

USA/JAPAN YEN 110.52   UP 0.074  (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/

GBP/USA 1.3330 DOWN  0.0045  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3022  UP .0008 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 15 basis points, trading now ABOVE the important 1.08 level RISING to 1.1762; / Last night Shanghai composite CLOSED DOWN 30.01 POINTS OR 0.97%  /Hang Sang CLOSED DOWN 377.91 POINTS OR 1.22% /AUSTRALIA CLOSED DOWN .51% / EUROPEAN BOURSES  ALL MIXED /

The NIKKEI: this WEDNESDAY morning CLOSED UP 88.03 OR 0.38%

Trading from Europe and Asia

1/EUROPE OPENED MIXED 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 377.91 POINTS OR 1.22%  / SHANGHAI CLOSED DOWN 30.01 POINTS OR 0.97%  /

Australia BOURSE CLOSED DOWN .51%

Nikkei (Japan) CLOSED UP 88.03 POINTS OR 0.38%

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1294.65

silver:$16.89

Early WEDNESDAY morning USA 10 year bond yield: 2.95% !!! DOWN 1 IN POINTS from TUESDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.08 DOWN 1  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early  WEDNESDAY morning: 93.81 DOWN 0  CENT(S) from MONDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.948% DOWN 5  in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.054%  UP 4/10   in basis points yield from TUESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.411% DOWN 4  IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 2.806  DOWN 5  POINTS in basis point yield from TUESDAY/

the Italian 10 yr bond yield is trading 140 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS TO +.482%   IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1788 UP .0041(Euro UP 41 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110,39 DOWN 0.047 Yen UP 5 basis points/

Great Britain/USA 1.3380 UP .0007( POUND UP 7 BASIS POINTS)

USA/Canada 1.2962 DOWN  .0052 Canadian dollar UP 52 Basis points AS OIL ROSE TO $66.57

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This afternoon, the Euro was UP 41 to trade at 1.1788

The Yen ROSE to 110.39 for a GAIN of 5 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 GAINED 7 basis points, trading at 1.3380/

The Canadian dollar GAINED 52 basis points to 1.2962/ WITH WTI OIL RISING TO : $66.57

The USA/Yuan closed AT 6.3979
the 10 yr Japanese bond yield closed at +.054%  UP 4/10  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1   IN basis points from TUESDAY at 2.55 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.84  DOWN 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, 93.59  DOWN 23 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 WEDNESDAY: 1:00 PM PM

London: CLOSED DOWN 33.62 POINTS OR 0.43%
German Dax :CLOSED UP 0.61 OR 0.00%
Paris Cac CLOSED DOWN 20.54 POINTS OR 0.36%
Spain IBEX CLOSED UP 16.10 POINTS OR 0.16%

Italian MIB: CLOSED UP 33.56 POINTS OR 0.15%

The Dow closed DOWN 1.58 POINTS OR 0.01%

NASDAQ closed UP  43.87 OR .57 % 4.00 PM EST

WTI Oil price; 66.57  1:00 pm;

Brent Oil: 76.33 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 63.00 DOWN

74/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 74 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO +.482% 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:$66.72

BRENT: $76.63

USA 10 YR BOND YIELD: 2.97% the dropping yields signify markets are in turmoil

USA 30 YR BOND YIELD: 3.09%/

EURO/USA DOLLAR CROSS: 1.1796 UP .0049  (UP 49 BASIS POINTS)

USA/JAPANESE YEN:110.30 DOWN 0.153 (YEN UP 15 BASIS POINTS/ .

USA DOLLAR INDEX: 93.54 DOWN 28 cent(s)/dangerous as the HIGHER dollar IS DESTROYING THE EMERGING MARKETS.

The British pound at 5 pm: Great Britain Pound/USA: 1.3378 UP 0.0005  (FROM YESTERDAY NIGHT UP 5  POINTS)

Canadian dollar: 1.2986 UP 28 BASIS pts

German 10 yr bond yield at 5 pm: +482%


VOLATILITY INDEX:  12.63  CLOSED UP 0.29

LIBOR 3 MONTH DURATION: 2.336%  .

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

TRADING IN GRAPH FORM FOR THE DAY

Powell’s Panic-Relieving Presser Calms Hawkish

Havoc But Yield Curve Crumbles

Hawkish havoc was unleashed briefly and then the man of steel stepped up…

The Initial Euphoric/Dysphoric reactions to Powell’s rate-hike and hawkishness (Dollar spike, stocks down, yields higher, yield curve plunge, EM dump), but everything turned around during Powell’s Presser.

In his presser, Powell reminded investors that despite the hawkish interpretation of today’s meeting and his confident view of the economy, the economy is not yet overheating. Powell says “there is no sense in our forecasts” that inflation will take off. “If we thought inflation would take off, we would be showing higher rates.”

Also tomorrow’s ECB meeting now looms and likely takes the shine off some positioning.

But by the close – stocks were back at the lows of the day.

Small Caps clung to unchanged from the FOMC statement, but the broader markets all retreated…

All major equity indices were lower on the day…

Tech and Financials exchanged roles after the Fed…

“Most Shorted” stocks were flat today but the following chart indicates just how insane a squeeze they have seen the last few weeks…

Yields were all higher on the day but well off their post-Fed highs…

10Y briefly tagged 3% then tumbled back to almost unchanged on the day…

The entire yield curve tumbled flatter…

The yield curve plunged to fresh cycle lows with 5s30s now within 1 rate hike of inversion…

The Dollar Index broke out intraday after the hawkish Fed from its recent extremely narrow range but quickly fell back to close red…

EM FX ended the day higher despite chaos surrounding The Fed statement…

Cryptocurrencies had another awful day…

Silver surged as the dollar fell back during Powell’s presser and WTI gained after s surprise crude draw reported by EIA…

WTI Crude ripped higher off $66 as the inventory data hit..

Silver surged above $17 and gold scrambled back above $1300…

Which sent Gold/Silver tumbling…

FOMC report

Hawkish Fed:  yield curve collapses signalling a policy error

(courtesy zerohedge)

Yield Curve Collapse Signals ‘Policy Error’ Looms

After Hawkish Fed Statement

Equity markets lurched lower but are coming back now after The Fed signaled a more hawkish expectation of two more rate-hikes in 2018. The dollar spiked and while Treasury yields also jumped, the yield curve collapsed to new cycle lows

All major equity indices are red post-FOMC…

The dollar jumped to the day’s highs..

Yield are up across the curve – 10Y stil below 3.00%…

And while rates are higher the yield curve is getting crushed with 2s30s at its flattest since Oct 2007…flashing “policy error” panic.

And at the shorter-end 5s7s  are back into single-digits and 7s10s is only +3bps (almost inverted).

Gugenheim’s Scott Minerd tweeted:

“The current shape of the U.S. yield curve is consistent with a recession in early 2020”

5s30s is among the most sensitive spreads…

One more rate hike and this is inverted!

END

MARKET REACTION TO THE FED: ONE OF MY FAVOURITES:  HUGH HENDRY:

IN ONE WORD:  PANIC!!

Submerging Markets: EM Debt, FX Dumped

After Fed Hike

A dollar spike along with a hawkish statement has sent Emerging Markets into a tailspin...

zerohedge@zerohedge

Hugh Hendry’s advice to Emerging Markets: PANIC

Or more of a tailspin…

EM FX is tanking…

To almost its lowest since early 2016…

And EM Debt is back at Feb 2016 lows…

Artist’s impression of EM right now…

END

MARKET DATA

PPI surges following on the heals of a 7 yr high in consumer price inflation and that has had a tepid response in the bond market

(courtesy zerohedge)

Producer Prices Surge At Fastest Rate Since 2011

After yesterday’s surge to 7 year highs in consumer price inflation had zero impact on bonds or stocks, a very different regime than just a few months ago, one wonders what today’s producer price inflation print will do.

After slowing in April to +2.6% YoY, PPI surged in May by 3.1% YoY – the biggest price rise since Dec 2011…

Energy prices dominated the increase – rising 4.6% YoY.

Final demand goods details:

Half of the advance in the index for final demand goods is attributable to a 9.8-percent increase in gasoline prices. The indexes for jet fuel, fresh and dry vegetables, diesel fuel, beef and veal, and light motor trucks also moved higher. In contrast, prices for chicken eggs fell 31.2 percent. The indexes for residential natural gas and for plastic resins and materials also decreased.

Final demands Services details:

One-third of the May advance in prices for final demand services is attributable to a 1.5-percent rise in margins for machinery, equipment, parts, and supplies wholesaling. The indexes for chemicals and allied products wholesaling; outpatient care (partial); apparel, footwear, and accessories retailing; food retailing; and truck transportation of freight also moved higher. Conversely, prices  for guestroom rental fell 4.4 percent. The indexes for fuels and lubricants retailing and for hospital inpatient care also moved lower.

Core PPI also rebounded from April, rising at 2.6% YoY.

And if ISM surveys are to be believed, PPI has further to rise…

Τάκης Χριστοδουλοπουλος@takis2910

As strong as US ‘s appear to be – they are still short of what ISM survey implies for pricing

Just like yesterday’s CPI, bond yields are underwhelmed…

2Y Yields are up a shocking 1bps…

50bps rate-hike anyone?

*  *  *

And once again more conspiracy theories come out…

James Crombie

@jtcrombie

Trump moaning about oil … PPI jumps on oil

end

USA/CHINA

The ceasefire in the USA/China trade war is off as Trump is set to slap tariffs on China this Friday as negotiations collapse

(courtesy zerohedge)

China Trade War Is Back: Trump To Slap Beijing With

Tariffs On Friday As Negotiations Collapse

The ceasefire in the US-China trade war is over.

As Fox News reported late on Tuesday, Trump rejected Beijing’s trade negotiation olive branch, saying that the proposed $80BN in agriculture purchase commitment from China was insufficient, and resetting bilateral trade talks back to square one.

In related news, Politico reports that Trump is expected to impose tariffs on Chinese goods as soon as Friday or next week, “a move that is sure to further inflame tensions and spark almost immediate retaliation from Beijing.” As discussed previously, on Friday the administration is planning to publish a final list of Chinese goods that will take the hit.

Trump’s China trade advisor, Peter Navarro, said on Tuesday that the president is planning to impose tariffs on a “subset” of Chinese imports that the administration included in an original list of roughly $50 billion in targeted products in April. Navarro’s comments suggest the Trump administration will move forward with tariffs but that it could impose penalties on a smaller group of products than those included on the original list of about 1,300.

After the public had a chance to weigh in, the original list is expected to remain largely intact but will be slightly reduced from what was first proposed, according to two sources briefed on the plans.

According to the report, Trump’s aggressive stance calls into question the future of talks between the two trade powers, which took a friendly turn in the weeks leading up to the North Korea summit as the U.S. sought China’s help, but have since deteriorated again.

To an extent that is understandable: China was seen as playing a key role in getting North Korean leader Kim Jong Un to the table with Trump, who has consistently linked his trade demands to Beijing’s willingness to help on North Korea; now that the summit is over and the wheels are turning, Trump no longer needs China’s aid.

And, sure enough, after the summit, while Trump defended his personal friendship with Chinese President Xi Jinping and said he would call the Chinese leader, he also said Beijing has not done an adequate job closing its border to trade with North Korea in recent months, which Trump seemed to blame for rising U.S.-China trade tensions.

“Which is a shame. But I have to do it. I have no choice. For our country, I have to do it,” Trump said at a press conference in Singapore, possibly referring to tariffs.

“I came away thinking that he was suggesting in the press conference in Singapore that although Xi Jinping was a close friend [and] that he’d provided help on North Korea, that the president had no choice but to turn up the heat on China,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

That’s precisely what is happening, but that’s not all.

As we reported yesterday, Congress is aggressively pushing back against the White House recently backing off on the ZTE seven-year ban, further complicating efforts to reach a deal with China. The Senate is expected to consider must-pass defense legislation this week that includes an amendment effectively rejecting the decision to roll back sanctions on ZTE.

In fact, as the WSJ reportsthe ZTE deal “appeared to teeter on the brink of demise” as senior Republican senators signaled that President Donald Trump was unlikely to block a congressional effort to derail a deal he brokered to resuscitate the Chinese telecommunications giant.

According to the report, the president hasn’t issued tweets urging Republicans to stand down, and lawmakers detect no backlash building within Congress against the move to unravel the White House agreement.

“I don’t think the president cares about ZTE,” Sen. Bob Corker (R., Tenn.) told reporters. “Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care. I don’t know if that’s true or not, but I think he did what he did for the Chinese leader but he doesn’t really care what Congress does.”

Meanwhile, as we noted last night, ZTE shares resumed trading in Hong Kong on Wednesday morning after a halt of almost two months, plunging over 40% in the opening minutes — their biggest drop in history, wiping out nearly $8 billion in market value — as investors rushed to distance themselves from the troubled company.

Trump had spent the previous week in closed-door meetings trying to sell Senate Republicans on the deal, which coincided with his effort to build goodwill with Chinese President Xi Jinping ahead of this week’s talks with North Korea about denuclearization. And in a briefing late on Monday with GOP senators, Commerce Secretary Wilbur Ross again tried to get lawmakers to drop their resistance to the ZTE agreement.

However, now that Trump had his moment in the history books with his North Korea summit – whether it is successful or not – expect the old, trade belligerent Trump to make a triumphal return, and the trade war with China to return front and center in the next few days.

end

The ZTE deal is now on the brink of collapse after the senate vows to derail the Trump agreement

(courtesy zerohedge)

ZTE Deal On Brink Of Collapse After Senate Vows To Derail Trump Agreement

Update: In what looks like a last-minute attempt to save face, the White House is insisting that it does, in fact, want to block an amendment that would derail its deal to save ZTE.

  • Senior White House Official: White House to Try to Block ZTE Language in Senate Defense Bill
  • White House Will Fight to Change ZTE Language Later In Legislative Process — Senior White House Official
  • House Has Already Passed a Defense Bill That Needs To Be Reconciled With Senate Bill

* * *

Now that President Donald Trump has notched what he views as another foreign policy victory in his historic meeting with North Korean leader Kim Jong Un, Republican lawmakers have noticed something unusual: Trump isn’t trying to dissuade lawmakers from supporting a measure that would thwart a White House deal with Chinese telecoms giant ZTE – a deal that many viewed as a sop to secure Chinese President Xi Jinping’s blessing for this week’s summit with North Korea, according to the Wall Street Journal.

Trump hasn’t resorted to using any of his favorite tactics for whipping up votes (for example, using Twitter to bash lawmakers who oppose him), and, in fact, has done little to stop the measure – which the Senate yesterday attached as an amendment to a “must-pass” defense authorization bill – from moving forward.

ZTE

Trump’s lack of enthusiasm for saving ZTE has prompted some lawmakers to speculate that he “doesn’t care” about saving the company, which would effectively be forced to shut down if it’s cut off from buying US exports.

“I don’t think the president cares about ZTE,” Sen. Bob Corker (R., Tenn.) told reporters. “Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care. I don’t know if that’s true or not, but I think he did what he did for the Chinese leader but he doesn’t really care what Congress does.”

Representatives for the White House, the Commerce Department and ZTE didn’t immediately comment.

ZTE shares plunged 41.5% last night – the company’s largest one-day drop in its history – when they opened for trading in Hong Kong after being suspended for two months. The drop wiped out some $8 billion in market value. Shraes of NXP fell 1.4% in premarket trading in the US Wednesday extending a weekly decline on news that the amendment to kill the ZTE deal might go through.

ZTE

In the weeks leading up to Trump’s meeting with Kim, the president spent hours in private meetings trying to convince Republicans to support the White House’s decision to give ZTE another chance. But Trump’s pleas did little to disabuse lawmakers of their opposition to the deal. In fact, the Senate is expected to pass the defense bill – with the ZTE-killing amendment attached – later this week. And it’s looking increasingly likely that the House will adopt a similar measure during the conference committee for the bill.

Sen. Tom Cotton, one of the amendment’s main backers, said he believes Trump won’t veto the defense bill if it passes with the ZTE measure attached – though he wouldn’t say where he got the idea.

On Monday, Mr. Cotton predicted that Mr. Trump wouldn’t use his veto power to reject the defense bill over the ZTE language. Mr. Cotton, who speaks regularly to Mr. Trump, declined to say whether the president had given him a personal guarantee. “I don’t reveal my private conversations with the president,” Mr. Cotton said.

In a Tuesday interview, Mr. Van Hollen said: “If the president’s backing down, that’s a good thing for the country.” He added: “We would welcome a statement from the president saying he made a mistake and that he now supports the bipartisan amendment on this.”

The Commerce Department announced in April that it would prohibit US companies from selling parts to ZTE, a move that effectively doomed the company. Roughly a month later, Trump tweeted that he and Chinese President Xi Jinping were searching for an alternative way to deal with the ZTE problem as Trump declared “too many jobs in China lost!”

Donald J. Trump

@realDonaldTrump

President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!

While that tweet incensed many lawmakers and officials involved in the defense and intelligence sectors (many have long suspected ZTE and other Chinese telecoms firms of aiding Chinese intelligence gathering efforts), it suggested that ZTE would be a key component of the grand “deal” that Trump is seeking to forge with China (though Wilbur Ross has insisted that the administration’s decision to spare ZTE wasn’t part of a broader quid pro quo).

Instead of banning ZTE from buying US goods, the company will pay a $1 billion fine, and place an additional $400 million in escrow to be paid out if the company again violates its settlement with the US government. In addition, the company has promised to replace its senior leadership and its entire board, while also funding a compliance operation that will continue for the next decade.

SWAMP STORIES

We now get documentation of a confrontation between Rosenstein and the oversight Committee members.  The event happened in January and it looks like it is still going on

(courtesy zerohedge)

“Downright Chilling”: Rosenstein “Threatened”

To Subpoena Congressmen In Closed-Door

Meeting

Deputy Attorney General Rod Rosenstein threatened to “subpoena” GOP members of the House Intelligence Committee during a tense January meeting involving committee members and senior DOJ/FBI officials, according to emails seen by Fox Newsdocumenting the encounter described by aides as a “personal attack.”

That said, Rosenstein was responding to a threat to hold him in contempt of Congress – and the “threat” to subpoena GOP records was ostensibly in order for him to be able to defend himself.

Rosenstein allegedly threatened to “turn the tables” on the committee’s aggressive document requests, according to Fox.

The DAG [Deputy Attorney General Rosenstein] criticized the Committee for sending our requests in writing and was further critical of the Committee’s request to have DOJ/FBI do the same when responding,” the committee’s then-senior counsel for counterterrorism Kash Patel wrote to the House Office of General Counsel. “Going so far as to say that if the Committee likes being litigators, then ‘we [DOJ] too [are] litigators, and we will subpoena your records and your emails,’ referring to HPSCI [House Permanent Select Committee on Intelligence] and Congress overall.”

A second House committee staffer at the meeting backed up Patel’s account, writing: “Let me just add that watching the Deputy Attorney General launch a sustained personal attack against a congressional staffer in retaliation for vigorous oversight was astonishing and disheartening. … Also, having the nation’s #1 (for these matters) law enforcement officer threaten to ‘subpoena your calls and emails’ was downright chilling.” –Fox News

ment officer threaten to ‘subpoena your calls and emails’ was downright chilling.” –Fox News

The committee staffer suggested that Rosenstein’s comment could be interpreted to mean that the DOJ would “vigorously defend a contempt action” —

The committee staffer suggested that Rosenstein’s comment could be interpreted to mean that the DOJ would “vigorously defend a contempt action” — which might be expected. But the staffer continued, “I also read it as a not-so-veiled threat to unleash the full prosecutorial power of the state against us.

But really – Rosenstein appears to have been warning the GOP Committee members that he would aggressively defend himself.

G-Men Hit Back

A DOJ official said that Rosenstein “never threatened anyone in the room with a criminal investigation,” telling Fox that the department and bureau officials in the room “are all quite clear that the characterization of events laid out here is false,” and that Rosenstein was merely responding to a threat of contempt.

The FBI, meanwhile, said that they disagree with “a number of characterizations of the meeting as described in the excerpts of a staffer’s emails provided to us by Fox News.

“The Deputy Attorney General was making the point—after being threatened with contempt — that as an American citizen charged with the offense of contempt of Congress, he would have the right to defend himself, including requesting production of relevant emails and text messages and calling them as witnesses to demonstrate that their allegations are false,” the official said. “That is why he put them on notice to retain relevant emails and text messages, and he hopes they did so. (We have no process to obtain such records without congressional approval.)”

Details of the encounter began to trickle out in early February, as Fox News’ Greg Jarrett tweeted: “A 2nd source has now confirmed to me that, in a meeting on January 10, Deputy A-G Rosenstein used the power of his office to threaten to subpoena the calls & texts of the Intel Committee to get it to stop it’s investigation of DOJ and FBI. Likely an Abuse of Power & Obstruction.”

Gregg Jarrett

@GreggJarrett

A 2nd source has now confirmed to me that, in a meeting on January 10, Deputy A-G Rosenstein used the power of his office to threaten to subpoena the calls & texts of the Intel Committee to get it to stop it’s investigation of DOJ and FBI. Likely an Abuse of Power & Obstruction.

Fox says that the emails they reviewed provide additional evidence of the encounter – while a former DOJ official said that the exchange may shed light on how the relationship between the agency and the Republican-led House committee has broken down in subsequent months.

“This is much worse than a deteriorating relationship – this is a massive breakdown in the system. A deputy attorney general does not make subpoena threats lightly. This is not the norm to say the least,” said Tom Dupree, former principal deputy assistant attorney general for the George W. Bush administration. “It’s hard to tell whether [Rosenstein] was sending a message to back off, or whether he was just trying to illustrate how invasive he considered the demands from Congress. But either way, it is a clear signal that the relationship is fractured, and it’s not clear how things will get repaired.”

The fight between the DOJ and Congressional investigators over the boundaries of Congressional oversight vs. the DOJ’s apparent concern for protecting sources and methods (and evidence of potential crimes) has set the tone for a sustained dispute over records, and has set in motion the latest round of confrontations between Chairman Devin Nunes and Rosenstein – who has requested records related to the FBI’s use of a confidential informant to spy on the Trump campaign.

Asked about the January meeting, Nunes provided a statement to Fox News noting they referred the incident to House Speaker Paul Ryan’s office: “The Intelligence Committee considers staff concerns at the most serious level, especially those involving interactions with the executive branch. Based on the justified concerns expressed by our lead staff investigators, we referred this matter to the Speaker’s Office.” –Fox News

A source on the House Intelligence Committee told Fox that “going to the DOJ IG [Inspector General] is one of several steps under consideration” by the panel. Meanwhile, Dupree noted that current tension between the DOJ and Congress go well beyond traditional oversight wrangling.

“Rarely, if ever, has it deteriorated to this point where you have what appears to be threats going back and forth between the two sides,” he said.

end

this may be troublesome, but I highly doubt that Cohen will implicate trump on anything

(courtesy zerohedge)

Cohen Reportedly Set To Cooperate With

Prosecutors, Drops Legal Representation

After two months of legal wrangling following an April 9 FBI raid on his home, hotel room and office, sources close to Trump personal attorney Michael Cohen say that he’s preparing to cooperate with prosecutors from the Southern District of New York who have been overseeing the criminal probe against him, ABC News reported Wednesday morning.

In the latest sign that he could be preparing to cooperate, ABC said the law firm that has represented Cohen so far will not be representing him going forward. So far, Cohen has been represented by Stephen Ryan and Todd Harrison of the Washington and New York firm McDermott, Will & Emery LLP. No replacement counsel has been identified at this time.

The possibility of Cohen turning states witness could create problems for the White House, Cohen’s family members and lawyers that have been working on the multifaceted investigation into Russian interference in the 2016 election. Needless to say, the Democrats are ecstatic.

Scott Dworkin

@funder

BREAKING: Michael Cohen no longer has legal representation, and a source tells ABC he is going to cooperate with federal prosecutors in New York. This would mean Cohen flipped on Trump. Which would be the most devastating blow to him yet. It could end his presidency. Tick-tock.

Today’s news comes after Vanity Fair reported late Tuesday that Cohen has been telling friends that he expects to be arrested soon. When contacted by the Vanity Fair reporter via text, Cohen reportedly replied “your source is wrong!”

While Trump has repeatedly played down his connections to Cohen (he said last month during an interview with Fox & Friends that Cohen handled only “a tiny fraction” of his legal work) sources close to the White House have told media that Trump is worried about the prospect of his former “fixer” cooperating with prosecutors.

“Trump should be super worried about Michael Cohen,” a former White House official said. “If anyone can blow up Trump, it’s him.”

Cohen is reportedly being investigated for bank fraud connected to a “hush money” payment of $130,000 made to Stormy Daniels, the former adult-film star who alleges she had a brief affair with Trump a decade ago. Special Counsel Robert Mueller reportedly turned over evidence against Cohen to the Southern District of New York, with the DOJ’s approval.

ON  THURSDAY night

HARVEY

 

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