GOLD: $1244.20 DOWN $10.75 (COMEX TO COMEX CLOSINGS)
Silver: $15.84 DOWN 22 CENTS (COMEX TO COMEX CLOSINGS)
Closing access prices:
Gold $1242.20
silver: $15.82
For comex gold:
JULY/
NUMBER OF NOTICES FILED TODAY FOR JULY CONTRACT:12 NOTICE(S) FOR 1200 OZ
TOTAL NOTICES SO FAR 85 FOR 8500 OZ (0.2643 tonnes)
For silver:
JUNE
37 NOTICE(S) FILED TODAY FOR
185,000 OZ/
Total number of notices filed so far this month: 5113 for 25,565,000 oz
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Bitcoin: BID $6302/OFFER $6388: DOWN $22(morning)
Bitcoin: BID/ $6315/offer $6400: DOWN $8 (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: 1261.82
NY price at the same time: 1251.80
PREMIUM TO NY SPOT: $10.02
Second gold fix early this morning: 1255.86
USA gold at the exact same time:1253.60
PREMIUM TO NY SPOT: $2.26
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 ROSE BY A SMALL SIZED 547 CONTRACTS FROM 207,154 UP TO 207,701 DESPITE YESTERDAY’S 3 CENT FALL IN SILVER PRICING. WE HAVE HAD LATELY,SUCH CONSIDERABLE COMEX LIQUIDATION THESE PAST SEVERAL DAYS BUT NOT TODAY. HOWEVER, THIS LIQUIDATION HAS NOT MANIFESTED ITSELF INTO LOWER DEMAND FOR PHYSICAL SILVER..JUST THE OPPOSITE. WE ARE STILL WITNESSING A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY(OVER 28 MILLION OZ) AS WELL AS CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S. WE WERE NOTIFIED THAT WE HAD A STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP: 1726 EFP’S FOR SEPT. , 0 EFP’S FOR DECEMBER AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE: OF 1726 CONTRACTS. WITH THE TRANSFER OF 1726 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 1726 EFP CONTRACTS TRANSLATES INTO 8.63 MILLION OZ ACCOMPANYING:
1.THE 3 CENT FALL IN SILVER PRICE AT THE COMEX AND
2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR THE JUNE/2018 COMEX DELIVERY MONTH. (5.420 MILLION OZ) AND NOW JULY/ 2018 WITH 28.985 MILLION OZ INITIALLY STANDING FOR DELIVERY.
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JUNE:
12,664 CONTRACTS (FOR 7 TRADING DAYS TOTAL 12,664 CONTRACTS) OR 63.32 MILLION OZ: (AVERAGE PER DAY: 1809 CONTRACTS OR 9.045 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH OF JULY: 63.32 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 9.04% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)* LAST MONTH’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.
ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 1,723.06 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
ACCUMULATION FOR JUNE 2018: 345.43 MILLION OZ
RESULT: WE HAD A SMALL SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 547 DESPITE THE SMALL 3 CENT FALL IN SILVER PRICE. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1726 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: 1726 EFP’S FOR SEPT, 0 EFP’S FOR DECEMBER AND ZERO FOR ALL OVER MONTHS FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 1726). TODAY WE GAINED A CONSIDERABLE: 2273 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:
i.e 1726 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH AN INCREASE OF 547 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 3 CENT FALL IN PRICE OF SILVER AND A CLOSING PRICE OF $16.07 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS ACTIVE JULY DELIVERY MONTH OF MORE THAN 28 MILLION OZ. IT SURE LOOKS LIKE A FAILED BANKER SHORT COVERING EXERCISE AS BANKERS ARE SCRAMBLING TO COVER THEIR HUGE SHORTFALL.
In ounces AT THE COMEX, the OI is still represented by OVER 1 BILLION oz i.e. 1.022 MILLION OZ TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT JULY MONTH/ THEY FILED AT THE COMEX: 37 NOTICE(S) FOR 185,000 OZ OF SILVER
IN SILVER, WE SET THE NEW RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018. AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51
ON THE DEMAND SIDE WE HAVE THE FOLLOWING:
- HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ MAY: 36.285 MILLION OZ / JUNE/2018 (5.420 MILLION OZ) AND NOW JULY 2018 AMOUNT INITIALLY STANDING: 28.985 MILLION OZ )
- HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
- HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
- RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ
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).
In gold, the open interest FELL BY A CONSIDERABLE 3773 CONTRACTS DOWN TO 503,593 WITH THE FALL IN THE GOLD PRICE/YESTERDAY’S TRADING (A LOSS IN PRICE OF $3.85). WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JULY. 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 ISSUANCE AND IT TOTALED A FAIR SIZED 4830 CONTRACTS : AUGUST SAW THE ISSUANCE OF: 4830 CONTRACTS, DECEMBER HAD AN ISSUANCE OF 0 CONTACTS AND THEN ALL OTHER MONTHS ZERO. The new COMEX OI for the gold complex rests at 503,593. 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 SMALL OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 1057 CONTRACTS: 3773 OI CONTRACTS DECREASED AT THE COMEX AND 4830 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN: 1057 CONTRACTS OR 105,700 OZ = 3.2800 TONNES. AND STRANGELY ALL OF THIS DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD YESTERDAY TO THE TUNE OF $3.85???
YESTERDAY, WE HAD 6281 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JUNE : 62213 CONTRACTS OR 62,213 OZ OR 193.50 TONNES (7 TRADING DAYS AND THUS AVERAGING: 8887 EFP CONTRACTS PER TRADING DAY OR 888,700 OZ/ TRADING DAY),,
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 7 TRADING DAYS IN TONNES: 193.50 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES
THUS EFP TRANSFERS REPRESENTS 193.50/2550 x 100% TONNES = 7.58% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***
ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 4,296.41* TONNES *SURPASSED ANNUAL PROD’N
ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22 TONNES (21 TRADING DAYS)
ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018: 649.45 TONNES (20 TRADING DAYS)
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)
ACCUMULATION OF GOLD EFP FOR JUNE 2018 650.71 TONNES (21 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 CONSIDERABLE SIZED DECREASE IN OI AT THE COMEX OF 3773 WITH THE $3,85 FALL IN PRICING GOLD UNDER TOOK YESTERDAY // . WE ALSO HAD AN GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 4830 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 4830 EFP CONTRACTS ISSUED, WE HAD A SMALL NET GAIN OF 2508 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
4830 CONTRACTS MOVE TO LONDON AND 3773 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 3.28 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THIS DEMAND OCCURRED WITH A FALL OF $3,85 IN TRADING. AT THE COMEX!!!. THE COMEX IS AN OUTRIGHT FRAUD
we had: 12 notice(s) filed upon for 1200 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 DOWN $10.75 TODAY: /
A HUGE CHANGE IN GOLD INVENTORY AT THE GLD TODAY: ANOTHER WITHDRAWAL OF 1.75 TONNES
/GLD INVENTORY 799.02 TONNES
Inventory rests tonight: 799.02 tonnes.
TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD. IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY
SLV/
WITH SILVER DOWN 22 CENTS:
ANOTHER CHANGES IN SILVER INVENTORY AT THE SLV: ANOTHER GOOD DEPOSIT OF 565,000
/INVENTORY RESTS AT 325.717 MILLION OZ/
NOTE THE DIFFERENCE BETWEEN THE GLD AND SLV: THE CROOKS CAN RAID GOLD BECAUSE THEY DO HAVE SOME PHYSICAL. THEY DO NOT RAID SILVER PROBABLY BECAUSE THERE IS NO REAL SILVER INVENTORIES BEHIND THEM
end
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in SILVER ROSE BY A SMALL SIZED 547 CONTRACTS from 207,154 UP TO 207,001 (AND CLOSER TO 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:
1726 EFP CONTRACTS FOR SEPT., 0 EFP CONTRACTS FOR DECEMBER AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1726 CONTRACTS . EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE OI GAIN AT THE COMEX OF 547 CONTRACTS TO THE 1726 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A NET GAIN OF 2273 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 11.365 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESS AN INITIAL STANDING OF OVER 28 MILLION OZ AND YET ALL OF THIS DEMAND OCCURRED DESPITE A SMALL 3 CENT LOSS IN PRICE??? .
IT SURE LOOKS LIKE WE ARE GETTING SOME COVERING FROM THE BANKERS SIDE ESPECIALLY WHEN YOU SEE A GOOD GAIN IN PRICE AND THEN A FALL IN COMEX OI AND A SMALLER THAN EXPECTED EFP ISSUANCE.
RESULT: A CONSIDERABLE SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 3 CENT LOSS THAT SILVER UNDERTOOK IN PRICING ON TUESDAY. BUT WE ALSO HAD ANOTHER FAIR SIZED 1726 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG SIZED AMOUNT OF SILVER OUNCES STANDING FOR JULY, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON AS WELL AS THE STRONG AMOUNT OF PHYSICAL STANDING FOR METAL AT THE COMEX.
(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 49.85 POINTS OR 1.76% /Hang Sang CLOSED DOWN 370,56 POINTS OR 1.29%/ / The Nikkei closed DOWN 264.68 POINTS OR 1.19% /Australia’s all ordinaires CLOSED DOWN 0.67% /Chinese yuan (ONSHORE) closed DOWN at 6.6748 AS POBC RESUMES ITS HUGE DEVALUATION /Oil DOWN to 73,68 dollars per barrel for WTI and 77.19 for Brent. Stocks in Europe OPENED RED //. ONSHORE YUAN CLOSED DOWN AT 6.6748 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.6957:HUGE DEVALUATION/PAST SEVERAL DAYS NOW CONTINUES WITH A VEGEANCE: TARIFF WARS CONTINUE UNABATED AND AT FULL TILT//ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED
/NORTH KOREA/SOUTH KOREA
i)North Korea/South Korea/USA
( zerohedge)
b) REPORT ON JAPAN
Japan’s yield curve collapses just like the USA and within inches of going completely flat. Investors have now given up hope of any Bank of Japan normalization
( zerohedge)
3 c CHINA
i)China/USA
Stocks plummet around the globe as Trump orders an additional $200 billion in Chinese tariffs list
( zerohedge)
ii)Steve Englander suggests that more tariffs are coming as this trade war is escalating
(courtesy zerohedge)
iv)this will make Trump furious: An employee of Apple steals secrets behind Apple’s self driving car and downloads the data to X. Motors a subsidiary of X Motors in China. It seems that China has 20,000 operatives in the USA trying to steal intellectual property(courtesy zerohedge)
4. EUROPEAN AFFAIRS
i)Euro jumps as the ECB leaks a story that they might rise rates earlier than expected i.e. in exactly one year from now in July 2019
( zero hedge)
ii)Germany
Germany is dependent on Russian supplies of energy. However Germany is being protected by USA forces. Germany pays about 1% of her GDP for defense, a lot less than the USA and Trump slams this hypocrisy
( zerohedge)
iii)Great Britain
( zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i) Kaliningrad/Russia
Putin is adding huge nuclear weaponry in Kaliningrad, a little enclave situated in the Baltics
(zerohedge)
Turkey decided a few years ago to engage in new energy projects where they borrowed massive amount of dollars. Now that the lira has been devalued, the costs associated to the production of energy has risen far greater than what they can collect.
Over 8% of total Turkish loans are now non performing. A recipe for disaster!!
( zerohedge)
iii)The lira hits 4.80 as Erdogan states that interest rates are to go down. The market thinks he is nuts:
6 .GLOBAL ISSUES
( zerohedge)
ii)Just look at these 3 places were rioting has broken out;
1.Haiti
2. nantes France
3. Portland Oregon
(courtesy Daisy Luther/Organic Prepper blog)
iii)Trump demands countries to pay 2% of their GDP immediately and then it should be raised to 4%
( zerohedge)
7. OIL ISSUES
i)Saudi Oil production surges by 400,000 barrels as they agree with Trump to raise production
( zerohedge)
ii)Oil/base metals
8. EMERGING MARKET
9. PHYSICAL MARKETS
i)We have been pointing out to you the close relationship of the yuan vs gold for the past month. The higher the yuan value, the higher price of gold, and the lower the yuan, the lower the price of gold. Has China taken over control over the gold market as they are ready for revaluation of the metal?
(Craig Hemke/Sprott Money/GATA)
ii)Ed Steer discusses yesterday’s trading with respect to a dollar rally
(courtesy Ed Steer)
iii)Dr Copper is one sick puppy and it is a strong indicator of poor global growth
( zerohedge)
10. USA stories which will influence the price of gold/silver)
i)MARKET TRADING/EARLY MORNING
a)Today’s reading of PPI comes in blazing hot, accentuating last month’s huge reading. This is not good as inflation is rearing its ugly head in the uSA as dollars around the world seek USA shores and that is sending inflation higher
( zerohedge)
iv)SWAMP STORIES
a)Page refuses to testify before Congress. Obviously she did not want to provide material to nab her lover Strzok
(courtesy zerohedge)
Trading Volumes on the COMEX
PRELIMINARY COMEX VOLUME FOR TODAY: 334,492 contracts
CONFIRMED COMEX VOL. FOR YESTERDAY: 310,238
contracts
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And now for the wild silver comex results.
Total silver OI ROSE BY A SMALL SIZED 547 CONTRACTS FROM 207,154 UP TO 207,701 (AND A LITTLE CLOSER TO THE THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS) DESPITE THE SMALL 3 CENT LOSS IN SILVER PRICING/ YESTERDAY. SINCE WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF JULY, WE WERE INFORMED THAT WE STRONG SIZED 1726 EFP CONTRACTS FOR SEPT., 0 EFP CONTRACTS FOR DECEMBER 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: 1726. ON A NET BASIS WE GAINED 2273 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 547 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1726 OI CONTRACTS NAVIGATING OVER TO LONDON.
NET GAIN ON THE TWO EXCHANGES: 2273 CONTRACTS
AMOUNT STANDING FOR SILVER AT THE COMEX
We are now in the active delivery month of JULY and here the front month fell by 142 contacts to stand at 721 contracts. We had 157 notices filed yesterday so we continue where we left off on yesterday as guys refuse to take any more silver ETF’s and instead seek physical delivery at the comex. We gained 15 contracts or an additional 75,000 oz of silver will stand at the comex.
The next delivery month, after July is the non active delivery month of August and here we lost 5 contracts to stand at 1029. The next active delivery month after August for silver is September and here the OI fell by 1806 contracts DOWN to 156,774
We had 37 notice(s) filed for 185,000 OZ for the JULY 2018 COMEX contract for silver
FROM LAST YEARS DATA, ON FIRST DATE NOTICE FOR THE JULY 2017 SILVER COMEX DELIVERY MONTH WE HAD 12.115 MILLION OZ OF SILVER STANDING FOR DELIVERY. AT MONTH’S END WE HAD 16.435 MILLION OZ EVENTUALLY STAND AS WE ALREADY HAD QUEUE JUMPING BEGIN IN EARNEST FROM APRIL 2017 ONWARD EVEN TO TODAY. SO WITH TODAY’S NUMBERS WE SURPASSED LAST YEAR’S LEVEL BY A WIDE MARGIN.
AND NOW COMPARISON VS AUGUST LAST YR:
ON FIRST DAY NOTICE JULY 31/2017: 1,965,000 OZ STOOD FOR DELIVERY
THE FINAL AMOUNT OF SILVER STANDING: AUGUST 30.2017: 6,245,000 OZ AS WE HAD CONSIDERABLE QUEUE JUMPING.
FOR THE AUGUST CONTRACT MONTH:
LAST YEAR AT THIS TIME JULY 11.2017 WE HAD 723 SILVER COMEX OI OUTSTANDING VS TODAY: 721
SO WE ARE RIGHT ON PAR WITH LAST YR.
INITIAL standings for JULY/GOLD
JULY 11/2018.
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 |
12 notice(s)
1200 OZ
|
No of oz to be served (notices) |
157 contracts
(15700 oz)
|
Total monthly oz gold served (contracts) so far this month |
85 notices
8500 OZ
.2643TONNES
|
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 |
For JULY:
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 12 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
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To calculate the INITIAL total number of gold ounces standing for the JULY. contract month, we take the total number of notices filed so far for the month (85) x 100 oz or 8500 oz, to which we add the difference between the open interest for the front month of JULY. (169 contracts) minus the number of notices served upon today (12 x 100 oz per contract) equals 24,200 oz,(.7527 tonnes) the number of ounces standing in this non active month of JULY
Thus the INITIAL standings for gold for the JULY contract month:
No of notices served (85 x 100 oz) + {(169)OI for the front month minus the number of notices served upon today (12 x 100 oz )which equals 24,200 oz standing in this NON – active delivery month of JULY .
We gained 5 contracts or an additional 500 oz will stand for comex delivery. Queue jumping has been the norm for over 15 months. Lately we have been witnessing this phenomenon occur in gold as investors shun the fiat profit and a London based forward to obtain needed physical on this side of the pond.
THERE ARE ONLY 7.4588 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 0.7527 TONNES STANDING FOR JULY
IN THE LAST 24 MONTHS 82 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
JULY INITIAL standings/SILVER
Silver | Ounces |
Withdrawals from Dealers Inventory | nil oz |
Withdrawals from Customer Inventory |
12,084.117 oz
Delaware
|
Deposits to the Dealer Inventory |
nil
oz
|
Deposits to the Customer Inventory | |
No of oz served today (contracts) |
37
CONTRACT(S)
(185,000 OZ)
|
No of oz to be served (notices) |
684 contracts
(3,420,000 oz)
|
Total monthly oz silver served (contracts) | 5113 contracts
(25,565,000 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
total dealer withdrawals: nil oz
we had 0 deposits into the customer account
i) Into JPMorgan: NIL oz
*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.
JPMorgan now has 141 million oz of total silver inventory or 52.0% of all official comex silver. (141 million/270 million)
ii) Into everybody else; nil oz
total customer deposits today: nil oz
we had 1 withdrawals from the customer account;
i) Out of Delaware: 12,084.117 oz
total withdrawals: 12,084.117 oz
we had 0 adjustments/
total dealer silver: 77.696 million
total dealer + customer silver: 279.532 million oz
The total number of notices filed today for the JULY. contract month is represented by 37 contract(s) FOR 185,000 oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at 5113 x 5,000 oz = 25,565,000 oz to which we add the difference between the open interest for the front month of JULY. (721) and the number of notices served upon today (37 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the JULY/2018 contract month: 5113(notices served so far)x 5000 oz + OI for front month of JULY(721) -number of notices served upon today (37)x 5000 oz equals 28,985,000 oz of silver standing for the JULY contract month
WE GAINED 15 CONTRACTS OR AN ADDITIONAL 75,000 OZ WILL STAND AS THESE GUYS REFUSE TO MORPH INTO LONDON BASED FORWARDS AND RECEIVE A FIAT SWEETENER FOR THEIR EFFORTS.
PLEASE NOTE THE FOLLOWING FOR COMPARISON PURPOSES:
THE INITIAL STANDING FOR SILVER AT THE COMEX JULY 2017: 12.115 MILLION OZ ALTHOUGH AT MONTH’S END: 16.435 MILLION OZ. THIS COMPARES WITH TODAY’S INITIAL STANDING FOR SILVER OF 28.985 MILLION OZ.
As I stated yesterday:
“WHEN WE WITNESS THE AMOUNT OF PHYSICAL INCREASE IN THE AMOUNT STANDING AT THE COMEX AND ESPECIALLY COMMENCING ON DAY 2 OF THE DELIVERY CYCLE, YOU CAN BET THE FARM THAT THIS AMOUNT WILL INCREASE FROM THIS DAY FORTH UNTIL THE CONCLUSION OF THE MONTH OF JULY. THIS IS KNOWN AS QUEUE JUMPING AND THIS PHENOMENON HAS BEEN FRONT AND CENTRE OF OPERATIONS IN SILVER FOR NOW OVER 14 MONTHS. SILVER IS BEING SOUGHT BY COMMERCIALS OVER ON THIS SIDE OF THE POND AS DWINDLING SUPPLIES VACATE THE GLOBAL ARENA.”
queue jumping continues to intensify to the highest degree in silver as dealers scrounge around for dwindling supplies.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
ESTIMATED VOLUME FOR TODAY: 87,470 CONTRACTS
CONFIRMED VOLUME FOR YESTERDAY: 75,099 CONTRACTS absolutely criminal
YESTERDAY’S CONFIRMED VOLUME OF 75,099 CONTRACTS EQUATES TO 375 million OZ OR 53.4% 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 -3.26% (JULY 11/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.53% to NAV (JULY 11/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.26%-/Sprott physical gold trust is back into NEGATIVE/
(courtesy Sprott/GATA)
3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):
NAV 12.89/TRADING 12.42//DISCOUNT 3.72.
END
And now the Gold inventory at the GLD/
JULY 11/WITH GOLD DOWN $10.75 THE CROOKS RAIDED THE COOKIE JAR AGAIN TO THE TUNE OF 1.75 TONNES/INVENTORY RESTS AT 799.02 TONNES
JULY 10/WITH GOLD DOWN $3.85: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.77 TONNES
july 9/WITH GOLD UP $4.00/ANOTHER RAID ON THE GOLD COOKIE JAR: TWO WITHDRAWALS OF 1.18 TONNES THIS MORNING AND 1.47 TONNES THIS AFTERNOON/INVENTORY RESTS AT 800.77 TONNES
JULY 6/WITH GOLD DOWN $2.45: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 803.42 TONNES
JULY 5/WITH GOLD UP ANOTHER $5.15, THE CROOKS RAIDED THE COOKIE JAR AGAIN TO THE TUNE OF 5.89 TONNES/INVENTORY RESTS AT 803.42 TONNES IN THE LAST 10 TRADING DAYS GLD HAS LOST A HUGE 25.34 TONNES WITH A LOSS OF ONLY $15.25 IN PRICE
July 3/WITH GOLD UP $11.15/THE CROOKS RAIDED THE GLD INVENTORY AGAIN TO THE TUNE OF 9.73 TONNES/INVENTORY RESTS AT 809.31 TONNES
JULY 2/WITH GOLD DOWN $12.15, THE CROOKS RAIDED THE GLD INVENTORY AGAIN BY 1.47 TONNES DOWN./INVENTORY RESTS AT 819.04 TONNES
JUNE 29/WITH GOLD UP $3.70/A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 820.51 TONNES
JUNE 28/WITH GOLD DOWN $5.15/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 821.69 TONNES
June 27/WITH GOLD DOWN $3.60// TWO ENTRIES:/STRANGELY THE CROOKS RETURNED THE WITHDRAWAL OF 4.42 TONNES LAST NIGHT (THUS WE HAD A DEPOSIT OF 4.42 TONNES/INVENTORY RESTS AT 824.63 TONNES. /THEN LATE THIS AFTERNOON A WITHDRAWAL OF 2.94 TONNES
INVENTORY RESTS AT 821.69 TONNES/THIS VEHICLE IS AN OUTRIGHT FRAUD.
june 26/LATE LAST NIGHT, WITH GOLD DOWN $9.10 WE HAD A HUGE WITHDRAWAL OF 4.42 TONNES OF GOLD/INVENTORY RESTS AT 820.21 TONES
JUNE 25/WITH GOLD DOWN $1.45/NO CHANGE IN GOLD INVENTORY AT THE GLD.INVENTORY RESTS AT 824.63 TONNES
JUNE 22/WITH GOLD UP 25 CENTS TODAY, THE CROOKS WITHDREW A MASSIVE 4.13 TONNES OF GOLD/INVENTORY RESTS AT 824.63 TONNES
JUNE 21/WITH GOLD DOWN $4.00/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 20/WITH GOLD DOWN $3.55/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 19/WITH GOLD DOWN $1.50/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONES
JUNE 18/WITH GOLD UP $1.90/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 15/WITH GOLD DOWN $28.90/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 14/WITH GOLD UP $7.10/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES/
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
JULY 11/2018/ Inventory rests tonight at 799.02 tonnes
*IN LAST 409 TRADING DAYS: 127.79 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 359 TRADING DAYS: A NET 28,75 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
end
Now the SLV Inventory/
JULY 11/WITH SILVER DOWN 22 CENTS TODAY: ANOTHER HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 565,000/INVENTORY RESTS AT 825.717 MILLION OZ
JULY 10/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 825.151 MILLION OZ
july 9/WITH SILVER UP 5 CENTS: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 847,000 OZ ADDED TO INVENTORY/INVENTORY RESTS AT 825.151 MILLION OZ/
JULY 6/WITH SILVER DOWN 2 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 824.305 MILLION OZ/
JULY 5/WITH SILVER UP 6 CENTS, A GOOD CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 470,000 OZ/INVENTORY RESTS AT 324.305 MILLION OZ/ FOR THE PAST 10 TRADING DAYS, SILVER INVENTORY HAS ADVANCED BY 4.945 MILLION OZ WITH A LOSS OF 33 CENTS/PLEASE COMPARE THIS WITH THE GLD.
JULY 3/WITH SILVER UP 17 CENTS, A HUGE DEPOSIT OF 1.37 MILLION OZ ADDED TO THE SLV/INVENTORY RESTS AT 323.835 MILLION OZ.
JULY 2/WITH SILVER DOWN 31 CENTS/A HUGE 2.070 MILLION OZ DEPOSIT AT THE SLV/INVENTORY RESTS AT 322.465 MILLION OZ/
JUNE 29/WITH SILVER UP 14 CENTS TODAY, NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS THIS WEEKEND AT 320.395 MILLION OZ/
JUNE 28/WITH SILVER DOWN 18 CENTS, THE CROOKS ADDED 1.035 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 320.395 MILLION OZ
JUNE 27.2018/WITH SILVER DOWN 8 CENTS/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 819.360 MILLION OZ/
june 26./2018/WITH SILVER DOWN 8 CENTS, THE CROOKS WITHDREW THE DEPOSIT OF TWO DAYS AGO; 941,000 OZ OUT OF INVENTORY/INVENTORY RESTS AT 819.360 OZ
JUNE 25/WITH SILVER DOWN 12 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.301 MILLION OZ/
JUNE 22/WITH SILVER UP 12 CENTS TODAY,ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV” A DEPOSIT OF 941,000 OZ INTO INVENTORY/INVENTORY RESTS THIS WEEKEND AT 320.301 MILLION OZ/
JUNE 21/WITH SILVER UP ONE CENT/ANOTHER CHANGE IN SILVER INVENTORY AT THE SLV/: A DEPOSIT OF 2.918 MILLION OZ/INVENTORY RESTS AT 319.360 MILLION OZ/ THUS FOR TWO STRAIGHT DAYS A TOTAL OF 5.26 MILLION OZ OF SILVER HAS BEEN ADDED WITH NO CHANGE IN PRICE.
JUNE 20/WITH SILVER DOWN ONE CENT/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY / A DEPOSIT OF 2.35 MILLION OZ/INVENTORY RESTS AT 316.442 MILLION OZ/
JUNE 19/2018/WITH SILVER DOWN 11 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.090 MILLION OZ/
JUNE 18/WITH SILVER DOWN 6 CENTS TODAY/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.090 MILLION OZ/
JUNE 15/WITH SILVER DOWN 75 CENTS/A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.788 MILLION OZ//INVENTORY RESTS AT 314.090 MILLION OZ
JUNE 14/WITH SILVER UP 30 CENTS, THE CROOKS DECIDED THAT THEY NEEDED SILVER INVENTORY BADLY SO THEY RAID THE SLV OF 1.412 MILLION OZ/INVENTORY RESTS AT 315.878 MILLION OZ/
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/
JULY 11/2018:
Inventory 325.717 MILLION OZ
6 Month MM GOFO 2.09/ and libor 6 month duration 2.51
Indicative gold forward offer rate for a 6 month duration/calculation:
G0FO+ 2.09%
libor 2.51 FOR 6 MONTHS/
GOLD LENDING RATE: .42%
XXXXXXXX
12 Month MM GOFO
+ 2.78%
LIBOR FOR 12 MONTH DURATION: 2.53
GOFO = LIBOR – GOLD LENDING RATE
GOLD LENDING RATE = +.25
end
Major gold/silver trading /commentaries for WEDNESDAY
GOLDCORE/BLOG/MARK O’BYRNE.
Chaotic BR
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:
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:
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
|
The following is self explanatory
(courtesy GATA/Chris Powell and Harvey Organ)
GATA asks bank regulator to check risks of gold
futures maneuver
Submitted by cpowell on Sun, 2018-06-10 16:17. Section: Daily Dispatches
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
We have been pointing out to you the close relationship of the yuan vs gold for the past month. The higher the yuan value, the higher price of gold, and the lower the yuan, the lower the price of gold. Has China taken over control over the gold market as they are ready for revaluation of the metal?
(Craig Hemke/Sprott Money/GATA)
Craig Hemke at Sprott Money: Has China taken
control of the gold market?
Submitted by cpowell on Tue, 2018-07-10 23:08. Section: Daily Dispatches
7:10p ET Tuesday, July 10, 2018
Dear Friend of GATA and Gold:
Writing at Sprott Money this week, the TF Metals Report’s Craig Hemke itemizes the evidence that China has taken control of the international gold market in preparation for some big move with its currency or currencies generally. Hemke’s analysis is headlined “Has the People’s Bank of China Taken Control of the Gold Market?” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/Blog/has-the-pboc-taken-control-of-the-gold-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Ed Steer discusses yesterday’s trading with respect to a dollar rally
(courtesy Ed Steer)
Ed Steer: Dollar ‘rally’ appeared in nick of time
Monday
Submitted by cpowell on Tue, 2018-07-10 23:16. Section: Daily Dispatches
7:25p ET Tuesday, July 10, 2018
Dear Friend of GATA and Gold:
GATA board member Ed Steer’s Gold and Silver Digest letter for Monday, headlined “A Dollar Index ‘Rally’ Appeared in the Nick of Time Monday,” has been posted in the clear at GoldSeek here:
http://news.goldseek.com/GoldSeek/1531252782.php
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
Dr Copper is one sick puppy and it is a strong indicator of poor global growth
(courtesy zerohedge)
Dr.Copper Is Sick – Global Growth Scare Looms
After Biggest Drop In 7 Years
When Dr.Copper is surging, there is no better indication of the world’s economic growth success. However, when Dr.Copper is not surging, it is largely ignored and shrugged off as transitory, inventory- or technical-driven weakness that ‘bucks’ the obvious trend of global growth.
Except that’s total bullshit and the fact that the last 4 weeks have seen the biggest collapse in copper prices since 2011 suggests all is definitely not well in the global synchronous growth narrative.
Furthermore, as Bloomberg notes, just when emerging markets were showing some green shoots, the latest trade attack on Chinese imports by the White House has all the signs of a rally-killer.
Copper’s largest drop since February and Brent prices bolted firmly above the $75 make the outlook for MSCI EM look more like an extension of last month’s buyers’ drought.
Using Dr. Copper as a proxy for global growth should give some big scares to those hoping that more developed EMs like Mexico and South Korea could make it through a trade slowdown relatively unscathed.
Its read-across for other metals darken the horizon for raw materials exporters like Chile and South Africa. Add to that rising fuel prices are making it more expensive to run the trucks and generators and vulnerabilities like those facing Turkey are magnified. And to think, the market hasn’t even seen China’s response yet.
The last time this kind of drop occurred in Copper and a global growth scare hit, The Fed unleashed Operation Twist and shortly after that QE3.
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 DOWN TO 6.6748/HUGE DEVALUATION FOR THE PAST TWO WEEKS RESUMES AT FULL TILT/ /shanghai bourse CLOSED DOWN 49.85 POINTS OR 1.76% /HANG SANG CLOSED DOWN 370.56 POINTS OR 1.29%
2. Nikkei closed DOWN 264.68 POINTS OR 1.19% / /USA: YEN RISES TO 111.24/
3. Europe stocks OPENED RED / /USA dollar index RISES TO 94.37/Euro FALLS TO 1.1716
3b Japan 10 year bond yield: RISES TO . +.04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.24/ 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:: 73.68 and Brent: 77.19
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 RISES TO +.36%/Italian 10 yr bond yield UP to 2.68% /SPAIN 10 YR BOND YIELD DOWN TO 1.27%
3j Greek 10 year bond yield RISES TO : 3.86
3k Gold at $1250.85 silver at:15.95 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble DOWN 24/100 in roubles/dollar) 62.05
3m oil into the 73 dollar handle for WTI and 77 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 111.24 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 0.9941 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1648 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.36%
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 2.84% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 2.94%
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
“Past Point Of No Return”: World Markets
Tumble Amid Global Trade War Shockwaves
In almost every way, the overnight trading action has been a mirror image of the ramp observed on Monday morning, when trade tensions – inexplicably, one trading day after trade war started – were said to have “gone away” leading to a furious global rally.
Not so much today, when hours after Trump unveiled the second round of trade war – at the worst possible time according to bulls, just ahead of earnings season, once again spoiling the positive effect of what is set to be another 20%+ EPS rise for the S&P – by pushing ahead with plans to impose tariffs of 10% on an additional $200 billion of Chinese goods by releasing a list of targeted products that includes consumer items such as clothing, television components and refrigerators, global stocks are a sea of red amid a worldwide market selloff as traders realized that not only is trade war not hibernating, but it is set to keep getting worse as Steven Englander explained last night, as escalation has now crossed past “the point of no return.”
While the duties have some time before taking effect, and the soonest they could be implemented would be after public consultations end on Aug. 30, Beijing has described the move as “totally unacceptable” bullying and vowed it will be forced to retaliate, without however giving details.
However, the biggest risk is that, as Bloomberg wrote, Trump has pushing his China trade conflict beyond “a point of no return”, where neither side can back down. China now has seven weeks to make a deal or dig in and try to outlast the U.S. leader. However, president Xi Jinping, facing his own political pressures to look tough, has vowed to respond blow-for-blow. He’s already imposed retaliatory duties targeting Trump’s base including Iowa soybeans and Kentucky bourbon.
Yet matching the latest U.S. barrage would force China to either levy much higher tariffs or take more disruptive steps like canceling purchase orders, encouraging consumer boycotts and putting up regulatory hurdles. Not only does that risk provoking Trump to follow through on threats to tax virtually all Chinese products, it could unleash nationalist sentiment on both sides that fuels a deeper struggle for geopolitical dominance.
“It’s already past the point of no return,” said Pauline Loong, managing director at research firm Asia-Analytica in Hong Kong. “What’s next is not so much a trade war or even a cold war as the dawn of an ice age in relations between China and the United States.”
As noted above, the Chinese Commerce Ministry said on Wednesday that it would be forced to retaliate against what it called “totally unacceptable” U.S. tariffs, with China’s Vice Minister of Commerce Wang Shouwen saying in comments to Bloomberg that Beijing “never yields to threat or blackmail” and will retaliate against the “groundless” tariffs.”
“The U.S. side ignored the progress, adopted unilateral and protectionist measures, and started the trade war.”
In the aftermath of the latest development, OCBC analysts told clients to “expect a risk-off tone to prevail over Asian markets today as investors prepare for the next escalation of U.S.-Sino trade tensions and China’s response.”
They were right, and sure enough the two key markets that everyone looks at first in the morning, US equity futures, which are down over 20 points and set for the biggest drop in 2 weeks, wiping out the gains from the past two days…
… and the Shanghai Composite, which closed -1.8% lower after sliding even more earlier in the session…
… have been hammered, dragging down the rest of global assets. Here one reason why Trump may be willing to keep pressing China is that a pattern observed so far in the escalating battle between the world’s top two economies is that the tensions hit Chinese shares harder than American ones – they are now in a bear market, while the S&P 500 is within about 3 percent of a record high.
In Europe, the Stoxx Europe 600 Index ended its best run since March, led lower by tariff-related sectors such as miners and autos and the MSCI Asia Pacific Index fell. Stoxx 600 basic resources index SXPP dropped as much as 3.4%, most in 2-1/2 weeks, with technical charts showing index testing key support levels amid new escalation in global trade war. After rising back over the 200DMA, Stoxx 600 is back under this key moving average.
Commenting on the latest escalation, Nomura FX strategist Dushyant Padmanabhan said that “this escalation, and the timing of it, seems to have caught the market a bit by surprise,” adding that “the $34 billion and $16 billion tariffs were well flagged and, as such, had little impact on markets,” but while this $200 billion has been mentioned before there’s no clear sense of timing around it.
Meanwhile, China’s currency – that other global risk on/off catalyst – tumbled, with the offshore yuan falling as much as 0.74%, the most in a week, and dropping 1000 pips in 2 days…
… while the onshore yuan slid 0.46% to 6.6710 and was headed for the weakest close in 11 months, since August 2017. The Yuan may fall closer toward multi-year low of just below 7 per dollar, with 6.7 the next key level to watch, Nomura strategists wrote in note Wednesday
At the same time, the dollar rallied strongly against G-10 and all other currencies too as the latest escalation in the U.S.-China trade war caught the market off guard, increasingly shorted the greenback and long-risk.
Elsewhere in FX, the euro predictably weakened the most in more than a week to re-test the 1.17 level, while the pound dropped ahead of the publication of the Brexit white paper Thursday. That said, there was one silver lining in overnight trading: volatility in G-4 currencies saw a rather muted response with traders in no rush to add exposure as the new list of tariffs won’t be implemented till end-August. The loonie fell toward a one-week low before the Bank of Canada’s rate decision and amid lower oil prices. Meanwhile, the Australia and New Zealand dollars led losses among G-10 currencies on renewed trade war.
“In the short run it’s very difficult to see what’s going to bring an end to this escalation of tit-for-tat,” Richard Turnill, chief investment strategist for BlackRock told Bloomberg TV. “It’s those increasing concerns that are going to weigh on market returns and force investors increasingly to look for more resilience in their portfolios.”
In rates, US Treasuries were trading close to overnight highs, with the curve unchanged. The yield on the 10Y dropped 4 bps to 2.83%: the lower yields slide, the greater the threat a sharp short squeeze takes them even lower as a result of another record shorts in the US rates complex.
In commodities, oil dropped below $74 a barrel in New York, even as the latest API report showed shrinking U.S. crude stockpiles. Brent is falling faster than WTI as a result of Libya’s NOC resuming control of Eastern oil ports, with operations set to resume to normal levels “in a few hours.” This is undoing the support offered on Tuesday by a larger than expected draw in API crude inventories. The metals sector is also seeing broad based losses, with Gold down 0.2%, copper falling over 3% during Asia-Pac trade to its lowest in around a year, Shanghai zinc fell limit down shortly after the Chinese open and lead is languishing around near 1 year lows. Platinum is also in negative territory with the market set for its 4th consecutive surplus this year, on the back of falling demand in the auto sector, as according to the CPM Group.
What to watch today: NATO summit in Brussels; U.S. sells 10-year notes; producer prices, wholesale inventories; BOC rate decision, press conference to follow; New York Fed President John Williams, ECB’s Mersch and Nouy speak.
Market Snapshot
- S&P 500 futures down 0.8% to 2,775.50
- STOXX Europe 600 down 1.1% to 381.85
- MXAP down 0.9% to 164.27
- MXAPJ down 1% to 534.79
- Nikkei down 1.2% to 21,932.21
- Topix down 0.8% to 1,701.88
- Hang Seng Index down 1.3% to 28,311.69
- Shanghai Composite down 1.8% to 2,777.77
- Sensex up 0.2% to 36,316.39
- Australia S&P/ASX 200 down 0.7% to 6,215.60
- Kospi down 0.6% to 2,280.62
- Brent futures down 2.1% to $77.19/bbl
- Gold spot down 0.4% to $1,250.05
- U.S. Dollar Index up 0.3% to 94.42
- German 10Y yield rose 4.4 bps to 0.364%
- Euro down 0.2% to $1.1726
- Italian 10Y yield rose 0.5 bps to 2.405%
- Spanish 10Y yield fell 0.3 bps to 1.275%
Top Overnight News from Bloomberg
- U.S. releases $200bn list of Chinese goods for additional possible tariffs, would take effect Aug. 30
- China confirms it will take countermeasures, describes latest U.S. move as totally unacceptable and urges other countries to join China to protect free trade
- Brexit: Euroskeptic Tories that failed to stop PM May’s soft Brexit plan are considering a radical last ditch move that could bring down her minority government later this year, according to people familiar
- Libya: force majeure lifted at eastern oil ports, exports to return to normal levels
- President Donald Trump opened up another front in his tussle with allies on his arrival at NATO’s annual summit, targeting Germany over its support for the Nord Stream 2 gas pipeline from Russia
- Euroskeptic Tories have failed to stop U.K. Prime Minister Theresa May’s plan for a soft Brexit and are considering a radical last ditch move that could bring down her minority government later this year
- Deutsche Bank AG is deploying top executives, as well as billions of dollars, as it seeks to win more business with Wall Street’s most active dealmakers
- Malaysia’s central bank left its benchmark interest rate unchanged in the first policy meeting under a new governor, providing support to an economy that Prime Minister Mahathir Mohamad is trying to revamp
Asian stocks slumped across the board with sentiment spooked on increased trade concerns after the US announced a new tariff list on an additional USD 200bln worth of Chinese goods. The renewed US trade offensive picks up from Trump’s threats made last month and in turn weighed heavily on US equity futures as well as Asia-Pac bourses, while some commodities in Shanghai went into free fall alongside the broad risk-averse tone. ASX 200 (-0.7%) and Nikkei 225 (-1.2%) were lower with commodity-related sectors in Australia suffering after declines in the complex in which Shanghai Zinc fell 6% to hit limit down and copper fell to its lowest in about a year, while losses in Tokyo were exacerbated by safe haven flows into the JPY. Elsewhere, Hang Seng (-1.3%) and Shanghai Comp. (-1.8%) took the brunt of the increased trade tensions, although both were off the day’s lows after an initial composed response from China which stated it was vital to send a positive signal of cooperation and suggested that if the US will go low, it will go high. Finally, T-note futures traded higher overnight with prices spurred by the tariff list announcement, while 10yr JGBs were flat after they failed to benefit from the broad risk-averse tone, as well as the BoJ’s presence in the market for JPY 960bln in 1yr-10yr maturities.
Top Asian News
- China Selloff Regains Momentum as Tariff List Hits Stocks, Yuan
- Turkey Faces Ticking Bomb With Energy Loans of $51 Billion
European equities (Euro Stoxx 50 -1.1%) are following in step with Asian stocks and falling sharply on the back of trade concerns as the US begun the process of imposing new 10% tariffs on a further USD 200bln of Chinese imports. This new list was said to include several metals and as such material names are underperforming alongside energy names (on softer oil prices), but losses are broad based and being seen across all sectors. 21st Century Fox have increased their bid for Sky (-0.6%) to GBP 14.00/share, an independent committee from Sky has said they have reached an agreement on this increased recommended pre-conditional cash offer
Top European News
- Hedge Fund Said to Sell Playtech Stake Before Profit Warning
- Indivior Plunges as U.S. Generic Setback Hurts Drug Orders
- European Stocks Extend Early Losses as Miners, Autos Hammered
- Danske Fine May Be $670 Million as Analysts Look at New Evidence
In FX, AUD Extending recent losses vs its US counterpart and underperformance within the G10 bloc, with a further retreat from near 0.7500 peaks to breach support just ahead of the big figure below (0.7401 was the 10 DMA and support from there not seen until the 61.8% fib around 0.7377). The Aud continues to track US-China import tariff developments as a barometer for wider global trade contagion and repercussions given closest links and relations with China, while its NZD antipodean peer is less sensitive and has held up better as a result – cross back below 1.0900 but Kiwi losing 0.6800 vs the Usd. CNH/CNY – Taking a direct hit from threats to raise the bar on imports to $250 bn in total by Beijing in response to a further $200 bn Chinese goods and services listed by the White House, but also weaker via the latest PBoC Cny fix amidst ongoing speculation that depreciation could be deployed as another trade war weapon. Usd/Cny closed around 6.6667, with resistance for Usd/Cnh just above 6.7000 subsequently tested. EM/SCANDI : Weaker across the board on general risk-off position and more independent bearish factors as the Lira lurches again on more fall-out from President Erdogan’s cabinet appointments and Usd/Try rallies to circa 4.7600+ again.
In commodities, oil is currently being hit by the risk-off mood, with both Brent and WTI in the red. Brent is falling faster than WTI as a result of Libya’s NOC resuming control of Eastern oil ports, with operations set to resume to normal levels “in a few hours” as of 08:45 BST. This is undoing the support offered on Tuesday by a larger than expected draw in API crude inventories. The metals sector is also seeing broad based losses, with Gold down 0.2%, copper fell over 3% during Asia-Pac trade to its lowest in around a year, Shanghai zinc fell limit down shortly after the Chinese open and lead is languishing around near 1 year lows. Platinum is also in negative territory with the market set for its 4th consecutive surplus this year, on the back of falling demand in the auto sector, as according to the CPM Group.
Looking at the day ahead, in the US the most significant release is the June PPI report (core PPI of 2.6% yoy expected), while May wholesale trades sales and final May wholesale inventories are also due. Away from the data, BoE Governor Mark Carney will speak late in the afternoon on the global financial crisis at a conference in Boston while New York Fed President John Williams will speak to business and community leaders at an event in Brooklyn. Meanwhile the NATO meeting begins, continuing into Thursday, while Japan PM Abe meets European Council President Tusk and EC President Juncker. Meanwhile the ECB’s Draghi, Praet, Mersch and Nouy will speak at Frankfurt. England will meet Croatia for a place in the World Cup final.
US Event Calendar
- 7am: MBA Mortgage Applications, prior -0.5%
- 8:30am: PPI Final Demand MoM, est. 0.2%, prior 0.5%; PPI Ex Food and Energy MoM, est. 0.2%, prior 0.3%
- PPI Ex Food and Energy YoY, est. 2.6%, prior 2.4%; PPI Ex Food, Energy, Trade YoY, prior 2.6%
- 10am: Wholesale Trade Sales MoM, est. 0.5%, prior 0.8%; Wholesale Inventories MoM, est. 0.5%, prior 0.5%
DB’s Jim Reid concludes the overnight wrap
It’s a sign of how good England have been at this World Cup that even without playing last night they made it through to the last 3. Happy days. Congratulations to readers in France and commiserations to those in Belgium this morning. Whoever gets through tonight will have a tough game against a very skilful French team. Ahead of the biggest game in this country for 28 years tonight I’m a little fragile this morning. Last night I finished packing away the last of nearly 2000 CDs I’ve had in my garages since streaming came along and made them largely redundant. They are to be collected by a charity shop today although given some of my peculiar album purchases over the years some of them might remain on the shelf longer than England’s football team have been away from a World Cup final. In skimming through them as I packed, it really did feel like I was saying goodbye to the soundtrack to my adolescence and young adult life. I hope I’ve done the right thing. If you think I’m going to regret this please let me know ASAP before they get picked up today and are gone forever. This moving house thing is very stressful and we haven’t even moved yet.
As a contrast, this week has been noticeable for the lack of stress mostly due to no further escalation of the trade dispute. However things have taken a different turn after the US markets closed overnight. The US Trade Representative office has released a list of an additional $200bn worth of Chinese imports to be hit with higher tariffs of 10%, although a final decision on the tariffs is not expected until after the public consultations period which ends on 30th August. The affected product list includes consumer goods such as clothing, refrigerators but excludes items such as mobile phones. In terms of initial reactions, China’s Commerce Ministry noted it is “shocked” by the US actions which “were hurting China… the entire world and the US itself” and that it will have no choice but to respond to the US move. Back in the US, the Senate Finance Chair Hatch called the proposal “reckless”.
This morning in Asia, markets have pared back deeper losses at the open to trade c1.5% lower with the Nikkei (-0.96%), Kospi (-0.53%), Hang Seng (-1.42%) and Shanghai Comp. (-1.87%) all down as we type. Meanwhile the Chinese Yuan is down c0.4% and futures on the S&P are also down c0.6%. Datawise, Japan’s June PPI edged up 0.1ppt mom to an in line print of 2.8% yoy.
As a reminder, DB’s Peter Hooper and team have recently published a note looking at the impact of trade frictions on the US macro economy. They noted that higher tariffs on $250bn worth of Chinese goods and $350bn worth of automotive products could reduce imports and lift the US GDP by c0.5ppt. However, this gain is likely to be swamped by various negative effects if the tariffs are actually implemented. These include: i) -0.4ppt hit to US GDP from higher prices and lower consumer spending, ii) -0.6ppt on US GDP from retaliatory tariffs from China and the EU as it depresses exports and iii) -0.5ppt hit to GDP from the confidence hit to businesses and households, particularly the flow on drags on investments and consumption spending. Refer to their note for details.
As for markets yesterday, risk assets edged up in the absence of further trade tensions (before the peace was shattered overnight) and investors turning their focus to the US results season. The S&P was up for the fourth straight day (+0.35%) as PepsiCo’s share price jumped the most in c9 year (+4.8%) following an above market result and guidance that Q4 earnings will be “substantially higher”. Elsewhere financials was the only sector in the red after rallying the prior day. In Europe, the Stoxx 600 advanced for the sixth straight day (+0.4%), marking the longest winning streak since March. As a quick stock take, the S&P is now the highest in c5 months and +8.2% higher than its February lows, albeit still down -2.8% from its record high in January. In comparison the Stoxx 600 and Shanghai Comp. are down -4.1% and -20.6% respectively from their January high, although the former has partly recovered to a c1 month high. The overnight news will likely put a dent in these recoveries though.
In government bonds, yields on 10y treasuries reversed earlier gains of c2bp to close -0.6bp lower at 2.851% following the aforementioned threat of higher tariffs on Chinese goods. We’re another 1bps lower in the Asian session. Back in Europe, core bonds broadly weakened (Bunds +2bp; OATs +1.3bp) while Gilts rose +4.9bp as Brexit uncertainties somewhat stabilised and GDP data pointed to a healthy return in economic growth.
In FX, Sterling reversed losses to be up +0.12% as concerns for a potential leadership challenge to PM May eased and German Chancellor Merkel also seems to be backing PM May’s softer Brexit proposal, calling it a “solid step forward”, although she also added that “we’ll continue to have lively discussions (on the proposals)”. Meanwhile the US dollar index (+0.09%) and Euro (-0.06%) were both little changed, while Brent oil rose for the second straight day (+1.01%).
Following on with some more specific Brexit headlines. After PM May’s latest proposal for a softer Brexit approach, the EU’s Chief Brexit negotiator seems to be pushing back on the plans, indicating that “we’ll protect this single market, which is based on the indivisibility of…..the four freedoms…of people, goods, services and capital”. Notably, Bloomberg cited sources that noted EU diplomats have not fully started going through the UK plans yet while the Irish PM Varadkar was relatively upbeat as he noted the EU may be “entering into a space” where it can show flexibility in Brexit talks. So lots bubbling along.
Moving onto Italy, the Bank of Italy Governor and the ECB’s Visco noted that Italy’s economic growth has slowed this year and could face follow on risks linked to the US tariffs decisions, but he still expects growth to be above 1%, in part given the supportive financial policy conditions in the EU bloc. He also added that a relaunch of investments and pro-growth policies are as important as cautious management of public finances for the country.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the May JOLTS report reported a 0.1ppt mom rise in the quits rate to 2.4% – the highest since February 2001, which should bode well for expectations of future wage gains. Meanwhile the June NFIB small business optimism index moderated 0.6pts from last month’s 34 year high to an above market print of 107.2 (vs. 106.9 expected).
In Europe, the macro data were broadly weaker than expectations. In Germany, the July ZEW survey on the current situation was 72.4 (vs. 78.1 expected) while the expectations index fell for the fifth straight month to the lowest level since 2012 (-24.7 vs. -18.9 expected). Meanwhile the Euro area’s ZEW expectations reading also fell to the lowest since August 2012 (-18.7 vs. -12.6 previous). For May industrial productions, the UK, France and Italy’s readings were all weaker than expectations at 0.8% yoy (vs. 1.9% expected), -0.9% (vs. 0.4% expected) and 2.1% (vs. 2.8% expected) respectively. Back in the UK, the May trade deficit was narrower than expected at -£2.8bn (vs. -£3.4bn expected) with upward revisions to the prior month’s reading. Elsewhere, the inaugural ONS estimate of monthly GDP growth indicated that the economy grew at an in line rate of 0.3% mom in May and based on the first two months of the quarter, Q2 appears on track for growth of about 0.4% qoq (vs. 0.2% previous). Following the above and no escalation in the political risk, the implied Bloomberg odds of an August rate hike rose 7ppt to 74%.
Looking at the day ahead, there are no releases of note in Europe while in the US the most significant release is the June PPI report (core PPI of 2.6% yoy expected), while May wholesale trades sales and final May wholesale inventories are also due. Away from the data, BoE Governor Mark Carney will speak late in the afternoon on the global financial crisis at a conference in Boston while New York Fed President John Williams will speak to business and community leaders at an event in Brooklyn. Meanwhile the NATO meeting begins, continuing into Thursday, while Japan PM Abe meets European Council President Tusk and EC President Juncker. Meanwhile the ECB’s Draghi, Praet, Mersch and Nouy will speak at Frankfurt. Oh and England will meet Croatia for a place in the World Cup final!!
3. ASIAN AFFAIRS
i)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 49.85 POINTS OR 1.76% /Hang Sang CLOSED DOWN 370,56 POINTS OR 1.29%/ / The Nikkei closed DOWN 264.68 POINTS OR 1.19% /Australia’s all ordinaires CLOSED DOWN 0.67% /Chinese yuan (ONSHORE) closed DOWN at 6.6748 AS POBC RESUMES ITS HUGE DEVALUATION /Oil DOWN to 73,68 dollars per barrel for WTI and 77.19 for Brent. Stocks in Europe OPENED RED //. ONSHORE YUAN CLOSED DOWN AT 6.6748 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.6957:HUGE DEVALUATION/PAST SEVERAL DAYS NOW CONTINUES WITH A VEGEANCE: TARIFF WARS CONTINUE UNABATED AND AT FULL TILT//ONSHORE YUAN TRADING STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED/
3 a NORTH KOREA/USA
North Korea/South Korea/usa
3 b JAPAN AFFAIRS
Japan’s yield curve collapses just like the USA and within inches of going completely flat. Investors have now given up hope of any Bank of Japan normalization
(courtesy zerohedge)
Japanese Yield Curve Collapses, Investors Give Up Hopes Of BoJ Normalization
While a day doesn’t go by when the US Treasury yield curve’s plunge is not discussed (and its flattening again today)…
As its recessionary-signaling prowess from the past is questioned by those that know better than it’s different this time – there is another yield curve in the world that has collapsed with far less media attention…
Japan.
The decline in Japan’s yield curve is a sign investors have given up on the Bank of Japan readying for a normalization of its unprecedented monetary policy, according to Mitsubishi UFJ Kokusai Asset Management.
This curve collapse is happening even as The BoJ is ‘stealth tapering’ its bond-purchases…
Expectations that the Bank of Japan wants a steeper yield curve to pave the way for tighter policy are all but gone, given the paltry rise in inflation, said general manager of trading Akio Kato in an interview in Tokyo.
Despite the fact that Japan has suffered (officially) five recessions in the last 30 years, the JGB 2s10s yield curve has not been inverted since 1991…
And perhaps more concerning, now that investors are losing faith in The BoJ’s normalization, Kokusai’s Kato warns that, there’s “nothing to put a brake” on further flattening.
c) REPORT ON CHINA/HONG KONG
Stocks plummet around the globe as Trump orders an additional $200 billion in Chinese tariffs list
(courtesy zerohedge)
Stocks, Yuan Extend Losses After Trump Orders $200 Billion China Tariff List
Update: The US has released the list of $200 billion in Chinese products that could be subject to an additional 10% tariff, fulfilling President Trump’s promises for further escalation of the burgeoning trade war between the US and China. Meanwhile, a senior US official reportedly told CNBC that China isn’t seriously negotiating on trade, suggesting that the hoped-for negotiated settlement might not materialize – at least not anytime soon.
“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.
This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies.
USTR will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs.”
The US Trade Rep reportedly took into consideration what might cause the biggest disruptions to China’s economy while building the list, and that has legged stocks down further… Richard Turnill, chief investment strategist at BlackRock, told Bloomberg TV earlier:
“In the short run it’s very difficult to see what’s going to bring an end to this escalation of tit-for-tat.”
“It’s those increasing concerns that are going to weigh on market returns and force investors increasingly to look for more resilience in their portfolios.”
As Asia markets open, Dow Futs are down around 300 from the closing highs
And S&P Futures down around 1%…
FTSE China A50 Index Futures Fall 2% in Singapore.
Japanese stocks are making new lows for Wednesday, with the Nikkei 225 now down 1.5%.
Copper in London Falls as Much as 3.8% to $6,092.50/Ton
Additionally offshore yuan is tumbling…
The tariffs, some which will impact goods from “Made in China 2025” sectors, a state-planned initiative to establish China as a leader in several key industries, including artificial intelligence and wireless technology. The tariffs will go into effect on August 30th, after a two-month review process, with two public comment sessions. Trump has threatened to impose tariffs on as much as $500 billion in Chinese imports, which would cover roughly all of the Chinese-made products entering the US.
Senate Finance Chairman Orrin Hatch immediately called the action “reckless” and not “targeted.”
Republican Senator Jeff Flake has told reporters there will be a Senate vote on Wednesday on a nonbinding measure aimed at limiting President Trump’s power to impose tariffs. Flake says he expects a majority of both Republicans and Democrats to support the bill
The full list can be found in the document below:
As we have noted previously, China only imports around $130 billion worth of U.S. goods meaning it has a limited ability to match U.S. tariffs dollar for dollar.The U.S. imported $505 billion of goods from China last year and has promised tariffs on $250 billion worth of those products.
China could jack up existing tariffs well beyond the 25 percent level imposed so far, though that would cause pain on both sides. Analysts say it’s more likely China will resort to non tariff barriers such as making it much tougher for America Inc. to do business in China.
* * *
Just when you thought it was safe to BTFTrade War Dip, a headline hits to remind you that President Trump is anything but done with China.
Bloomberg reports that President Donald Trump is preparing to release a list of an additional $200 billion in Chinese products to be hit with tariffs, according to two people familiar with the matter.
“The list could be released as soon as Tuesday, and likely this week”, according to Bloomberg sources. The publication of the list starts a weeks-long process that includes a public-comment period and hearings.
The potential unveiling comes as Trump is stil considering imposing duties on another $16 billion in Chinese goods, following a public hearing later this month. China, of course, as vowed to retaliate tit-for-tat and dollar-for-dollar to all future US tariffs.
The immediate result: Dow futures plunge 300 points in the blink of an eye.
And all major equity futures drop.
Futures are closed until 6pmET, but SPY (S&P ETF) is extending its losses after-hours.
And China ETF is down aroun d0.5%.
And so did the 10Y Yield.
And USDJPY dropped below 111.00
The new list would mark the latest escalation of the trade war between the world’s two biggest economies.
It appears that the market’s brilliant extrapolation of “no more trade wars” as a result of a 3 days silence (of which 2 was during the weekend) may have been wrong.
END
In afternoon trading, the Chinese yuan breaks the 6.70 barrier to 6.7195 and that causes gold to fall as their is a direction linkage between the yuan and gold. The lower the yuan goes, the lower gold goes as this assists the Chinese to buy gold cheaper from USA shores. To me this is treason!
(courtesy zerohedge)
Chinese Yuan Tumbles Most Since January 2017 As Dollar Surges
Following a slight retracement early in the morning, the USD dollar has enjoyed two spurts higher following the strong PPI report and again after the unexpectedly strong 10Y auction.
As a result of the dollar surge, the offshore yuan is tumbling, its biggest drop since January 2017, and has tagged 6.72, a level last seen during the mini Chinese freak out on July 3 which saw aggressively PBOC verbal intervention, and well beyond the central bank’s so-called “redline” below 6.70.
What is odd is that the Yuan rout continued even after the Commerce Dept announced it has signed an escrow agreement with Chinese telecommunications ZTE and once the the company has completed the $400m deposit, the agency would issue a notice lifting the denial order, allowing the company to resume business as usual, and ostensibly an olive branch from the Trump administration to China.
The dollar strength has been broad-based, and has pushed all key pairs lower against the greenback, with the EUR sliding below 1.17 and the USDJPY jumping above 1.12
It is unclear what specific catalyst may have caused today dollar rampage, but unless there is some intervention, most likely from the PBOC, the brief piece in emerging markets is unlikely to continue, and as Goldman warned earlier, “the terrible trio” may be about to manifest itself, resulting in rolling routs across the EM space in the coming days if not hours.
end
Steve Englander suggests that more tariffs are coming as this trade war is escalating
(courtesy zerohedge)
Why At This Point, Trade War Is Likely To Get Much Worse
In a note written on Monday, ahead of today’s latest escalation by the US which unveiled a list of $200BN in incremental tariffs sending risks assets sharply lower and yet which was perfectly expected and previewed both here and elsewhere as it was part of Trump’s escalating tit for tat trade war strategy as summarized in this chart shown first nearly three weeks ago…
… Standard Chartered’s new head of Global G-10 FX strategy Steven Englander made an accurate prediction: more tariffs are coming.
Englander first’s point is that last Friday, as the original $34BN in tariffs were unveiled officially launching the trade war, is that shortly afterward, investors took a benign view of the first round of tariffs, for three reasons:
- The US economy has a strong head of steam; China’s economy is somewhat sideways or faltering a bit and its financial markets have been under pressure, leaving the US asset market more resilient
- The current round of tariffs will likely have small effects
- The EU is sounding more conciliatory
And, as he correctly added, these three factors also provided the Trump Administration with incentives for a more aggressive round of tariff imposition, for the following two reasons:
- The tariffs so far are politically popular even in agricultural and industrial states
- Tariff measures are very easy to reverse
But it was his next point, one which we have made numerous times and just this morning again most recently, that was most crucial and explains why the tit-for-tat trade war escalation between the US and China is only set to get much worse:
The temptation (primarily for the US but for trading partners as well) is to keep ramping up measures to convince the other side that they are serious about staying the course. Tariffs can be rolled back quickly when an agreement is reached.
And the punchline:
Because the long-term consequences are likely to be so modest and reversible, the incentive is to move aggressively in the short term. If tariffs are popular politically, there are even more likely to be extended. That said, with so much going on in this week politically in the US – the Supreme Court nomination and meeting with NATO and the Russian president— the focus may be elsewhere.
It was… for about 24 hours. Then, with the SCOTUS judge in the bag, and with Trump en route to NATO, the UK and Putin, the president decided to lob a bomb and blow up the market’s uneasy peace that had hit just settled with 3 days to go until earnings season.
The bigger point is that, as Englander adds, “this cycle will stop when one side or both feel enough pain to back down.”
Clearly, the US, with its “decoupled” economy and the S&P back to 2,800 is nowhere near “pain”, as for China, it is more likely that Xi will first take a bullet than concede… unless of course the stock market crashes and a recession ripples across the country, starting the one thing Beijing is most afraid of: a middle-class revolt (points we made over the weekend).
As a footnote, Englander frames the argument as similar to that made by Sam Peltzman with respect to seatbelt usage. He argued (and produced evidence) that drivers would drive less safely because mandated safety devices reduced the consequences of an accident.
* * *
So what does this mean in practical terms? Well, as Englander claimed – correctly – even before today’s $200BN in new tariffs were floated, “the US is likely to press its perceived advantage”, to wit:
The US will probably push the tariff cycle further because they see China as more vulnerable. The value of China’s goods exports to the US is almost four times as high as US goods exports to China.
The ability of China to implement simple tit-for-tat tariffs on goods runs out at about USD 130bn (based on 2017 imports from the US). The US exports about USD 60bn of services, importing little, so China might match the US further, although taxing services is more complicated than taxing goods. China’s greater exposure, combined with the perceived US economic and asset-market advantage, is likely behind the US Administration’s view that tariff wars are ‘easy’ to win.
In simple terms this means that if the US extended tariffs to cover a wide range of goods, and – as the case may be – even cover more goods than China physically exports as Trump has bluffed (raising the stake as much as $800 BN in Chinese tariffs), China would quickly run out of room to tax US exports.
At this point its only recourse would be to implement additional non-tariff controls, which Englander – and everyone else – views as “a very serious escalation.”
There are of course also other ways China could respond: Tariffs make it more expensive to buy goods, but so do exchange rate fluctuation, sales taxes and other events, like dumping some or all of one’s Treasuries to demonstrate irrationality and threaten mutual assured destruction. In other words, “more expensive does not mean unavailable” and non-tariff measures have far more potential to disrupt supply chains and make goods unavailable, potentially raising prices sharply. That is precisely what China is contemplating right now
This is how Englander wrapped up his piece on Monday:
The very limited set of tariffs imposed so far, and the retaliatory measures by trading partners, are probably not enough to indicate who will blink first. The question is how a much broader second or third round of tariffs would be received.
One day later we may be about to find the answer now that $200BN in tariffs has been proposed.
However… before Trump considers the latest escalation salvo a trade war victory, there is a “but”: the current enthusiasm for trade measures may be short-lived if prices on store shelves begin to rise sharply, as is sure to happen if a lengthy trade war evolves, with tariff levels ratcheting higher and higher.
For now, however, we are far from that point, and as such, the US Administration likely sees going a lot further in terms of tariffs as advantageous.
There is just one thing that can stop Trump in his tracks sharply and forcefully: a market crash.
* * *
As for the big question facing traders tonight, and into earnings season, it goes as follows: will China respond and if so, how? Luckily we know the answer: back in mid-June, Beijing said it would retaliate “forcefully”
“If the U.S. loses its senses and publishes such a list, China will have to take comprehensive quantitative and qualitative measures,” the Ministry of Commerce said at the time.
As Bloomberg adds, it is China’s Mofcom that has been tasked with formally retaliating against the U.S. on trade, so be on the lookout for statements from them. There’s also the daily media briefing by the Ministry of Foreign Affairs in Beijing, where China tends to double down on its rhetoric in these instances. That’s at 3 pm Hong Kong/Beijing time.
We doubt China will leave anyone in a state of suspense for too long.
“Shocked” China Set To Hit Back At Trump “In Other Ways”
One of the key features of Trump’s newly proposed $200BN in 10% tariffs on Chinese exports, is that Beijing simply has no way to retaliate proportionately: after all the US does not export that much to China. That does not mean that Beijing is limited in its reactions: as we discussed last night, Beijing may simply increase the rate on existing tariffs, or expand quantitative tariffs to “qualitative” as Barclays suggested on Monday, or of course pursue even more drastic measures such as devaluation or dumping US assets.
And, as the WSJ writes, China is now contemplating precisely such an approach, and is planning to hit back at Trump “in other ways”, such as holding up licenses for U.S. firms, delaying approval of mergers and acquisitions involving U.S. companies and ramping up inspections of American products at borders.
While a Commerce Ministry statement on Wednesday described Beijing as “shocked” by the U.S. action and said China “has no choice but to take necessary countermeasures”, behind the scenes officials have described the mood as more cautious.
Specifically, senior Chinese officials are weighing how far to press the retaliation without hurting other national interests. The retaliatory measures are the kind of nontariff barriers that U.S. and European businesses have long complained about, and Beijing is actively courting allies in Europe and elsewhere to fight what officials call U.S. “trade bullying.”
China also needs the U.S. for more than just trade. “The U.S. is not China’s enemy as both countries face many common challenges,” said one of the officials, listing climate change, terrorism and other problems. And the tariff battle threatens to sap an already weakening Chinese economy.
The WSJ also reports that in recent days China’s Vice Premier Hu Chunhua, who oversees foreign investment, has instructed local governments to gauge how the biggest round of U.S. tariffs to date — 25% duties on $34 billion of Chinese goods imposed on Friday — is affecting American businesses operating in China.
In particular, authorities are looking for signs of U.S. companies potentially moving facilities out of China, the officials said. That would be a blow to Beijing’s effort to attract foreign capital and keep people employed at a time of gathering economic gloom.
Of course, the opposite is also true: China is now pushing to get more US production in China, as Elon Musk’s impromptu trip to Shanghai where he allegedly secured commitment to build a Tesla factory in the next 2 years, has shown.
Meanwhile, Liu He, President Xi Jinping’s top economic envoy, instructed a group of prominent Chinese economists to hold a roundtable discussion on the impact of a trade war with the U.S. on the Chinese economy.
Some of the economists, members of the China 50 Forum think tank that Mr. Liu founded, expressed concerns that the trade brawl could embolden state companies with a stake in the status quo to try to block market-opening reforms Beijing is planning, according to people briefed on the event.
It is worth noting that so far, authorities have avoided aggressively going after American businesses, or fanning overt nationalist sentiment to get the nation’s 1 billion-odd consumers to boycott American products (except the occasional Michelle Obama quote of course).
In the past, such tactics have been deployed against other countries embroiled in disputes, such as South Korea, and it is likely that unless there is a resolution soon, it will take place again, putting sales of iPhones in China in jeopardy.
“The Chinese government understands that a full-scale trade war does more economic harm to China and would work hard to avoid it,” said Wang Tao, chief China economist at UBS Group AG.
Unless, of course, China suffers a market crash that unleashes a recession, and there is little more to lose.
For now there is hope: Both Washington and Beijing have left the door open for talks aimed at a resolution of the dispute, though no negotiations are actively under way. However, as Steven Englander explained yesterday, both nations are now incentivized to push the adversary further, to discover their breaking point. This means that trade war between China and the US will first get much worse, before it gets better.
The market was not happy with the WSJ report, and with futures attempting to stage a modest rally, the E-mini was promptly slammed lower.
END
this will make Trump furious: An employee of Apple steals secrets behind Apple’s self driving car and downloads the data to X. Motors a subsidiary of X Motors in China. It seems that China has 20,000 operatives in the USA trying to steal intellectual property
(courtesy zerohedge)
China Steals Secrets Behind Apple’s Self-Driving Car
The US has arrested a former Apple employee who allegedly tried to abscond with sensitive proprietary information from the company’s closely guarded self-driving car project, according to the Financial Times. Xiaolang Zhang, who had recently left his position at Apple under suspicious circumstances, was arrested by FBI agents as he tried to board a plane bound for mainland China.
Zhang joined Apple in December 2015, and was arrested on July 7. US prosecutors allege that he had downloaded sensitive information about the company’s self-driving car research without permission. During his time at the company, Zhang worked “to develop software and hardware for use in autonomous vehicles.”
The charges against Zhang represent the latest in a series of arrests made by federal authorities of Chinese spies carrying out what the US government calls “economic espionage” that date back to 2006.
And with President Trump intensifying efforts to stop China from extracting intellectual property from foreign corporate partners trying to gain a foothold in Chinese markets, it’s hardly surprising that China is stepping up its espionage programs.Zhang initially aroused suspicion when he told Apple that he would be returning to China to take a job with Xiaopeng Motors, a Chinese electric-car startup that also has offices in the Bay Area.
The complaint against Mr Zhang said about 5,000 of Apple’s 135,000 full-time employees have security clearance for Titan, although that figure may include staff across the company working on artificial intelligence technology, as well as hundreds of people working on the car project itself.
Mr Zhang allegedly told Apple on April 30 that he intended to resign after returning from paternity leave. He told his supervisor he was moving back to China to be closer to his mother, who he said was ill. Later in the meeting, he said he intended to work for XMotors, according to the filing on Tuesday.
His comments apparently raised the suspicions of his supervisor. Mr Zhang was asked to turn over his Apple-owned devices and escorted from its campus, his network and building access revoked, the filing said.
Apple began an internal investigation and allegedly found he had downloaded information about its autonomous vehicle project. CCTV footage showed he had also taken a large box from Apple’s self-driving car lab shortly before informing his supervisor about his resignation, the US government claimed.
After his arraignment on Monday, a judge ordered that Zhang be held until his trial, presumably because he presents a serious flight risk (Chinese authorities would
US prosecutors alleged he had downloaded information from a database for Apple’s self-driving car project – including data on power requirements, battery system and drivetrain suspension mounts – shortly before informing Apple in April that he was resigning.
He allegedly told the company he intended to return to China and take a job with Xiaopeng Motors, a Chinese electric car start-up with offices in Guangzhou and Palo Alto, California.
Mr Zhang appeared in court in San Jose, California, on Monday and was remanded in custody, according to a separate filing. He was assigned a public defender, who did not immediately return a call requesting comment.
Xiaopeng Motors, also known as XMotors, did not immediately respond to requests for comment. According to the filing on Tuesday, Mr Zhang claimed to have joined XMotors’ California office after leaving Apple.
Not much is publicly known about Apple’s secretive self-driving car program, codenamed Project Titan. According to the FT,it’s presently focusing on the underlying software for autonomous cars.
Details started to emerge about Apple’s secret project to create an electric vehicle in early 2015, as it poached staff from carmakers including Tesla and Mercedes-Benz. Since then, Apple has rarely discussed its plans but regulatory filings, including its permit to test autonomous vehicles in California last year, have hinted at its strategy.
Codenamed Project Titan, the effort underwent a shift in strategy in mid-2016, after its initial leader Steve Zadesky was replaced by Apple veteran Bob Mansfield.
At the moment, Apple is focusing on developing the underlying systems required for autonomous driving, rather than the vehicle itself. That includes a plan to test a self-driving shuttle to ferry employees around its offices in Silicon Valley.
As the US said in the document unveiling its latest round of proposed tariffs, the Trump administration has been seeking to stymie China’s “Made in China 2025” plan – a government-backed initiative to establish China as a leader in several key industries like artificial intelligence – at every turn. Under Trump, the US has been more aggressive about blocking Chinese companies attempting to acquire US firms in an effort to siphon off their valuable technology. So China has been working on other methods for surreptitiously stealing the technology.
“Apple takes confidentiality and the protection of our intellectual property very seriously,” an Apple spokesperson said. “We’re working with authorities on this matter and will do everything possible to make sure this individual and any other individuals involved are held accountable for their actions.”
XMotors, Zhang’s erstwhile employer, is one of the dozens of startups working on electric and autonomous vehicles in Silicon Valley. Its purported involvement in the espionage case is made even more galling by the fact that its backers include some of the most well-known Chinese firms like Alibaba. This year, the company hired a former senior banker at JPMorgan to be the company’s vice chairman and president. WSJ reported on Wednesday that China is considering other methods of retaliating against President Trump in the battle over trade, including holding up licenses for US firms operating in the Chinese market, to enforcing customs delays while also delaying approval of deals like Qualcomm’s planned takeover of NXP Semiconductors.
By some estimates, China has 20,000 intelligence operatives embedded in the US ready to commit economic espionage at every conceivable opportunity. China also employs sophisticated hackers like the group that recently infiltrated a military contractor and stole military secrets. And as trade tensions intensify, expect China to press its espionage advantage as President Xi Jinping is determined to make “Made in China 2025” a resounding success.
4. EUROPEAN AFFAIRS
Euro jumps as the ECB leaks a story that they might rise rates earlier than expected i.e. in exactly one year from now in July 2019
(courtesy zero hedge)
Euro Jumps On Report About Earlier Than Expected
Rate Hike
As if there wasn’t enough fringe developments to keep track of this morning, the ECB decided to interject with its own latest trial balloon (using Reuters this time), with a strategically timed story according to which the ECB rate hike planning might be more advanced than widely thought, and while policymakers are split (and one can easily imagine which ones leaked the “story”) with some expecting the hike in the fall of 2019, others say the hike could come as early as July, months ahead of the market consensus which is currently toward the end of the year:
- ECB POLICYMAKERS SPLIT ON TIMING OF FIRST RATE HIKE, MEANING OF “THROUGH SUMMER”: SOURCES
- OTHERS ECB RATE SETTERS SEE SCOPE FOR MOVE AS EARLY AS JULY AS LANGUAGE VAGUE: SOURCES
Most desks are dismissing the report as just an ECB market positioning test and a way to stop out some of the overly aggressive shorts and/or weak hands, however the news briefly managed to wipe away all EUR losses for the day, and it was up 30 pips from session lows at last check.
end
Germany
Germany is dependent on Russian supplies of energy. However Germany is being protected by USA forces. Germany pays about 1% of her GDP for defense, a lot less than the USA and Trump slams this hypocrisy
(courtesy zerohedge)
“Germany Is A Captive Of Russia”: Trump Slams
German Hypocrisy Over Russian Pipeline
President Trump came out swinging in Brussels after arriving on Air Force One for his second NATO summit. Speaking with journalists before a meeting with the NATO secretary general Jens Stoltenberg – and all caught strategically on video – Trump slammed Germany for expecting the US to foot the bill for Europe’s security in the face of Russian aggression while Germany and others cut massive energy deals with Russian energy companies, per RT.
Germany is so dependent on Russia for energy, Trump said, that it’s essentially being “held captive” by Vladimir Putin and his government, Trump said during his breakfast with Stoltenberg having himself been the object of withering critique for the past two years by the US liberal media that he himself is a Putin pupet.
“Germany is captive of Russia because it is getting so much of its energy from Russia. They pay billions of dollars to Russia and we have to defend them against Russia,” said Trump at a breakfast with NATO chief Jens Stoltenberg.
Trump even tweeted a video of the exchange for public consumption:
As muni expert Cate Long commented after the exchange:
“President Trump called out Germany for expecting the US to pay for their defense against Russia while they cut a massive oil and natural gas deal with Russia. The simplicity and elegance of his argument cannot be overstated. The duplicity of the German govt is outrageous.”
Merkel wasted no time to respond to this direct attack by Trump saying “I have experienced myself how a part of Germany was controlled by the Soviet Union. I am very happy that today we are united in freedom … Because of that we can say that we can make our independent policies and make independent decisions.”
Despite Merkel’s best efforts to iron out the winkles, the bad blood between the US and Germany started flowing early.
Trump is , of course, correct: Germany like much of central Europe, is held hostage by Russian energy exports, a reality of life in Europe and what many believe was the initial cause for the proxy was in Syria which sought to push a Qatar gas pipeline across Syria and Turkey to reduce Europe’s reliance on Russia, and is the reason why most Europeans have been pushing to ease sanctions against the Kremlin. Meanwhile, the US has been struggling to butt into the European energy market, with the Trump administration doing everything in its power to send more LNG exports Europe’s way, benefiting US companies.
In an effort to lighten the tension (and also rib Trump for his complaints about NATO members not paying their fair share) following what was described as a “contentious” breakfast, Stoltenberg told reporters that he enjoyed”some nice fruit salad, paid for by the United States.”
The pipeline has been a frequent target of attacks by Trump, who threatened to escalate the trade war against Germanyseveral months ago if it supported the construction of the pipeline, which the Trump administration has claimed would grant Russia a quasi-monopoly over European energy markets.
With the completion of the pipeline, Russian LNG has become cheaper and more reliable than US energy exports, helping Russian energy firms muscle out their US rivals in the European market. Back in May, the Trump administration threatened sanctions against German companies who participated in the construction of the pipeline, while Trump reportedly warned German Chancellor Angela Merkel that the US could impose punitive trade measures against Germany in retaliation for its support for the pipeline. The pipelinewhich carries gas directly from Russia under the Baltic Sea.
Trump bashed Germany again for supporting the pipeline, calling it a “very sad” state of affairs, according to Bloomberg.
“It’s very sad when Germany makes a massive oil and gas deal with Russia where we’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia,” Trump said before meeting with NATO Secretary General Jens Stoltenberg on Wednesday morning.
German Defense Minister Ursula von der Leyen responded to Trump’s criticisms of the Nord Stream pipeline in an interview with the BBC in Brussels: “We can cope with it. We’ve heard him before and seen the tweets. We have an independent energy supply, we are an independent country, we are just diversifying.”
Trump also reiterated his criticisms of NATO partners whom he has accused of shirking their financial obligations to the alliance.
“Many countries owe us,” Trump said in Brussels, before attending the summit at NATO headquarters. “The United States is paying far too much and other countries are not paying enough…This has been going on for decades, for decades, it’s disproportionate and not fair to the taxpayers of the United States.”
Here, too, Trump is correct as the following map shows, although it is unclear if the US is truly losing from an arrangement where the US military-industrial complex benefits disproportionately from US domination of NATO, which in turn send MIC stocks to all time highs, making shareholders and management especially rich… largely at the expense of US taxpayers.
As Bloomberg pointed out, Trump’s aggressive rhetoric suggested that the NATO summit will follow the same trajectory as the G-7 summit in Canada earlier this summer, where Trump’s allies joined together to try and counter his criticisms.
“NATO is an an alliance of 29 nations and sometimes there are differences and different views and also some disagreements, and the gas pipeline from Russia to Germany is one issue where allies disagree,” said Stoltenberg. “But the strength of NATO is despite these differences we have always been able to unite around our core task, to protect and defend each other, because we understand we are stronger together than apart.”
However, at least one diplomat agreed with Trump’s concerns about Nord Stream. Polish Foreign Minister Jacek Czaputowicz said Trump has a point: “Some countries are too close” to Russia, he said on a panel at a parallel event to NATO, accusing Russia of using proceeds from the pipeline to fund its military.
end
Great Britain
Daniel Lacalle is correct: the soft Brexit is not good for England as the deal still exposes the country to Italy’s banking crisis. They need a hard exit. The problem is that May is ill prepared to leave.
(courtesy zerohedge)
6 .GLOBAL ISSUES
James Rickards has got it right..the next crisis is in junk bonds. Now that rates are rising these enterprises will collapse and send the entire globe into chaos. As a side note, Deutsche bank has huge derivatives being long in junk bonds
(courtesy zerohedge)
Saudi Oil production surges by 400,000 barrels as they agree with Trump to raise production
(courtesy zerohedge)
8. EMERGING MARKET
Venezuela
end
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am
Euro/USA 1.1716 DOWN .0012/ 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 ALL RED /
USA/JAPAN YEN 111.24 UP 0.392 (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 1.3246 DOWN 0.0013 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED
USA/CAN 1.3156 UP .0011 (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 FELL by 12 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1716; / Last night Shanghai composite CLOSED DOWN 49.85 POINTS OR 1.76% /Hang Sang CLOSED DOWN 370.56 POINTS OR 1.29% /AUSTRALIA CLOSED DOWN 0.67% / EUROPEAN BOURSES ALL RED /
The NIKKEI: this WEDNESDAY morning CLOSED DOWN 264.48 POINTS OR 1.19%
Trading from Europe and Asia
1/EUROPE OPENED ALL IN THE RED
2/ CHINESE BOURSES / :Hang Sang DOWN 370.58 POINTS OR 1.29% / SHANGHAI CLOSED DOWN 49,85 POINTS OR 1.76%
Australia BOURSE CLOSED DOWN 0.67%
Nikkei (Japan) CLOSED DOWN 264.68 POINTS OR 1.19%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1250.80
silver:$15.95
Early TUESDAY morning USA 10 year bond yield: 2.84% !!! DOWN 3 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 2.94 DOWN 3 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/
USA dollar index early WEDNESDAY morning: 94.37 UP 22 CENT(S) from TUESDAY’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: 1.773% UP 2 in basis point(s) yield from TUESDAY/
JAPANESE BOND YIELD: +.043% DOWN 2/10 in basis points yield from TUESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.304% UP 3 IN basis point yield from TUESDAY/
ITALIAN 10 YR BOND YIELD: 2.689 UP 2 POINTS in basis point yield from TUESDAY/
the Italian 10 yr bond yield is trading 139 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: RISES TO +.3670% 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 1.1720 DOWN .0008(Euro DOWN 8 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 111.59 UP 0.750 Yen DOWN 75 basis points/
Great Britain/USA 1.3236 DOWN .0022-( POUND DOWN 22 BASIS POINTS)
USA/Canada 1.3122 DOWN .0023 Canadian dollar DOWN 23 Basis points AS OIL FELL TO $72.38
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This afternoon, the Euro was DOWN 8 to trade at 1.1720
The Yen FELL to 111.59 for a LOSS of 75 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 LOST 22 basis points, trading at 1.3236/
The Canadian dollar LOST 23 basis points to 1.3122/ WITH WTI OIL FALLING TO : $72.38
The USA/Yuan closed AT 6.6826
the 10 yr Japanese bond yield closed at +.043% DOWN 2/10 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from TUESDAY at 2.858 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.958 DOWN 1 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, 94.33 UP 17 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
London: CLOSED DOWN 100.08 POINTS OR 1.30%
German Dax :CLOSED DOWN 192.72 OR 1.59%
Paris Cac CLOSED DOWN 80.43 POINTS OR 1.48%
Spain IBEX CLOSED DOWN 155.70 POINTS OR 1.57%
Italian MIB: CLOSED DOWN 349.24 POINTS OR 1.58%
The Dow closed DOWN 219.21 POINTS OR 0.88%
NASDAQ closed DOWN 42.58 points or 0.55% 4.00 PM EST
WTI Oil price; 72.38 1:00 pm;
Brent Oil: 76.34 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 61.98 UP 16/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 16 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.367% 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, 4:00 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$70.62
BRENT: $74.06
USA 10 YR BOND YIELD: 2.84% the dropping yields signify markets are in turmoil
USA 30 YR BOND YIELD: 2.94%/
EURO/USA DOLLAR CROSS: 1.1674 DOWN .0054 ( DOWN 54 BASIS POINTS)
USA/JAPANESE YEN:112.02 up 1.165 (YEN down 117 BASIS POINTS/ .
USA DOLLAR INDEX: 94.73 up 57 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3207 DOWN 54 (FROM LAST NIGHT DOWN 54 POINTS)
Canadian dollar: 1.3209 down 65 BASIS pts
German 10 yr bond yield at 5 pm: ,.367%
VOLATILITY INDEX: 13.63 CLOSED UP 0.99
LIBOR 3 MONTH DURATION: 2.337% .
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Trump Tariff Threat Sparks Commodity Carnage,
Yield Curve Crash, Stock Slump
And that happened…
China tumbled overnight…
Europe was ugly…
US Futures show the action best… the sudden panic bid at the US cash open…
The machines managed to get Small Caps back to unch before it all dropped again..
Dow tested down to its 50/100DMA and rebounded intraday…
Dow fell back into the red year-to-date…
Global Banks tumbled today after a brief bounce…
FANG stocks plunged at the open – then the PPT sent them back to the highs…
While stocks fell today, they still have a long way to go catch down to the bond market’s reality post-Trade-Wars…
Treasuries were bid on the trade war, sold off during the day then were bid into the close
And the yield curve collapsed to new cycle lows…
The Dollar spiked to its highest since July 4th…
Offshore Yuan crashed to its lowest close in 12 months…
Turkey was a bloodbath today with Lira and stocks battered…
PMs limped lower but copper and crude were crushed…
Commodities were clubbed like a baby seal today – crashing most since 2014 to a new record low…
Copper crashed…
Crude collapsed…
The Global growth scare is upon us…
Market trading
Market DATA
Today’s reading of PPI comes in blazing hot, accentuating last month’s huge reading. This is not good as inflation is rearing its ugly head in the uSA as dollars around the world seek USA shores and that is sending inflation higher
(courtesy zerohedge)
PPI Comes Blazing Hot Rising Most Since 2011; Yields Spike
The week’s first inflation report, the June PPI – ahead of tomorrow’s even more anticipated CPI – has come in and it has come in hot and well ahead of expectations on both a monthly and annual basis: headline PPI rose 0.3%, above the 0.2% expected, if modestly below last month’s 0.5% surge, while on an annual basis, PPI increased a whopping 3.4%, well above the 3.1% consensus and May print, and highest level since Nov 2011. Energy goods and Trade services rose most MoM, but Food prices dropped 1.1% MoM.
Core PPI, ex food and energy, rose 0.3% on the month (exp. 0.2%) and 2.8% Y/Y, a big jump from May’s 2.4%, and also well ahead of expectations of 2.6%.
According to the report, more than 40% of the increase in the index was due to higher retail margins for fuel. The gain also reflected a 1.3%MoM jump in truck transportation of freight, the largest in data back to July 2009.
Another key factor in the June increase in prices for final demand goods was the index for motor vehicles, which moved up 0.4 percent. In contrast, the cost of goods rose 0.1 percent in June from a month earlier, reflecting cooling energy prices, after a 1 percent May surge.
Some more details:
- Final demand services: Prices for final demand services moved up 0.4 percent in June, the largest advance since a 0.5-percent rise in January. In June, half of the broad-based increase in the index for final demand services can be traced to margins for final demand trade services, which climbed 0.7 percent. Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services rose 0.3 percent and 0.5 percent, respectively.
- Product detail: Over 40 percent of the advance in the index for final demand services is attributable to a 21.8-percent jump in the index for fuels and lubricants retailing. The indexes for hospital outpatient care; health, beauty, and optical goods retailing; truck transportation of freight; automobiles and automobile parts retailing; and food retailing also moved higher. Conversely, prices for apparel, footwear, and accessories retailing declined 2.9 percent. The indexes for inpatient care and airline passenger services also decreased. (See table 4.)
- Final demand goods: Prices for final demand goods edged up 0.1 percent in June following a 1.0-percent rise in May. Leading the June increase, the index for final demand goods less foods and energy advanced 0.3 percent. Prices for final demand energy climbed 0.8 percent. In contrast, the index for final demand foods fell 1.1 percent.
- Product detail: A major factor in the June increase in prices for final demand goods was the index for motor vehicles, which moved up 0.4 percent. Prices for diesel fuel, electric power, industrial chemicals, and fresh fruits and melons also advanced. Conversely, prices for fresh and dry vegetables dropped 13.8 percent. The indexes for corn, pharmaceutical preparations, and residential natural gas also moved lower.
Certainly another high inflation print that The Fed will have trouble ignoring if it wants to tilt to a dovish hike.
The bond market has certainly noticed, and the PPI report promptly sent 10Y yields to session highs.
USA ECONOMIC/GENERAL STORIES
The truth behind the trade war. Please listen to what Stockman has to say
(courtesy zerohedge)
Trump’s Bite May Be Worse Than His Bark: Stockman Slams “Absurd, Dangerous, Stupid” Policies
Excellent CNBC interview with David Stockman, President Reagan’s head of OMB, who speaks his mind and never holds back. Some dismiss him as a perma-bear and doomsayer.
We certainly don’t, just has been a bit early, like every analyst and economist worth their salt. His analysis and model are sound.
By the way, if you ever meet someone who claims they always top tick or buy every bottom, and have perfect timing, run as fast as you can.
Moreover, the former “beltway boy wonder” doesn’t have to make his money trading and can maintain his conviction without going bankrupt or losing his career. He will eventually be right. It’s all timing, my friends.
Listening to him today, we respect him even more for his intellectual honesty. We have always perceived Mr. Stockman as a supporter of the president, but we could be wrong.
He never allows his politics to warp his analysis. Rare and refreshing.
Taken To Woodshed
He was famously “taken to the woodshed” by President Reagan for his statements in a 1981 Atlantic Monthly article, that “supply-side economics — the backbone of the Reagan economic revolution – was a ‘Trojan horse’ that would ultimately benefit the rich.”
He laid it all out there today and held nothing back.
https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=7000029655&size=530_298
Massive trade war won’t solve deficits, says former Reagan WH budget director from CNBC.
Money quotes from today’s interview *
- Imbalances are not the result of bad trade deals
- We have had 43 straight years of large and growing current account deficits, that is a monetary issue
- A trade war is not going to solve it…let interest rates find their right level
- The fact is, we are heading into a massive trade war in the world
- Trump doesn’t know what he’s doing at all. He is making it up. He is a hopeless protectionist with a 17th-century view of the world
- We have an absurd policy — dangerous, stupid. The worst that I’ve seen since my whole career started in 1970 under [President Richard] Nixon, and he did some crazy things
- The market marches to new highs until it doesn’t
- In 1990…the average tariff in China was about 30 percent, the average tariff in China today is 3 ½ percent. It is not an issue
- What they [Trump administration] are objecting to is China’s policy of “no ticky, no washy.” In other words, if you want to come to China and do business, you have to be in a joint venture and share your technology
- If somebody wants to go to China so they can come on CNBC and brag they are in a growth market then they ought to put up with the local regulations
- Don’t start a trade war and throw the soybean farmer under the bus because of some big business lobby in Washington is whining about China’s terms of business
*the interview was concluded before the announcement of a 10 percent on an additional $200 billion of Chinese imports was published by the USTR after the market close.
Tough words.
No Reagan Moment On Free Trade
Sorry, Mohamed, we love you but there will be no “Reagan Moment” for International Trade. We hope we are wrong, and we could be, but we don’t think so.
Trump is no Reagan, the ultimate free-trader. Larry Kudlow and Stephen Moore now talking tariffs? This is not an administration looking to further trade, in our opinion, but one only to protect and coddle its political base.
Trump’s triggers his base with words such as “free trade,” among others, and blames much of their problems on the “bad trade deals” of previous administrations. It works for him. Why fix it?
But those who, like me, thought Trump’s bark would be worse than his bite on trade are having second thoughts about where all of this might lead. – Dani Rodrik
President Xi Won’t Back Down
Moreover, how in the world can President Xi, after consolidating power for life as the country’s ultimate strongman now back down and look weak to the Chinese people? China has secured the high ground of multilateralism. Even if it’s bullshit or not. Furthermore, the U.S. appears to be growing exponentially more isolated.
Nonlinear Dynamics
As we posted on Friday, we are now in a nonlinear trajectory. Things can unravel fast, or be put right quickly. Maybe the Senate? Nobody knows where this will end up.
We have all learned over the past 18 months that the president is capable of doing a 180,even in mid-sentence, and convince himself he held the position all along. That unpredictability makes it a risky trade.
Markets In The Land Of Pharaoh
It does feel the markets are in Egypt, however. The land of de Nile.
The post-war international order is more at risk of unraveling – and we are not saying its demise is imminent – than is currently priced.
Stay tuned.
SWAMP STORIES
Page refuses to testify before Congress. Obviously she did not want to provide material to nab her lover Strzok
(courtesy zerohedge)
Lisa Page Lying About Access To FBI Docs In Excuse To Bail On Testimony: Meadows
GOP Congressional investigators are furious after former FBI attorney Lisa Page issued a statement through her attorney notifying a joint House panel that she would ignore a subpoena to appear on Wednesday because she wasn’t allowed access to documents by the FBI.
Page’s attorney, Amy Jeffress, claimed that “Lisa and I went to the FBI today to review the materials that were previously produced to Congress related to her propsed interview, but after waiting for more than three hours, we were not provided with any documents.”
“The Committees have not honored this request,” Jeffress said. “As a result, Lisa is not going to appear for an interview at this time.”
On Wednesday morning, however, Freedom Caucus chairman Mark Meadows tweeeted that Page and her attorneys did review the requested documents at the FBI on Tuesday, and that “Her failure to appear before Congress this morning had little to do with ‘preparation’–and everything to do with avoiding accountability.”
In response to Page ignoring the subpoena, House Judiciary Committee Chairman Bob Goodlatte issued a statement Tuesday night suggesting that “Page has something to hide,” before pledging to use all available resources to obtain her testimony.
“It appears that Lisa Page has something to hide. She plans to blatantly defy a congressional subpoena by refusing to appear for her deposition. She has known for months that the House Judiciary Committee has sought her testimony as part of our joint investigation with the Oversight Committee into decisions made by the Justice Department in 2016, and she has no excuse for her failure to appear. Lisa Page is a key witness, and it is critical that she come before our committees to answer questions as part of our investigation.
“We will use all tools at our disposal to obtain her testimony. Americans across the country are alarmed at the bias exhibited by top officials at the Justice Department and FBI, and it is imperative Congress conduct vigorous oversight to ensure that never happens again.” Rep. Bob Goodlatte (R-VA)
Other GOP members on the Judiciary Committee issued harsh rebukes to Page over Twitter, with Jim Jordan of Ohio writing “One set of rules for regular Americans, a different set for the Swamp!” and Ron DeSantis off Florida calling her “Pathetic.”
Oversight committee member Mark Meadows (R-NC) said that the statement from Page’s attorney could have better been summed up as “We’re choosing to ignore a Congressional subpoena.”
Jeffress hit back – claiming that the committee’s “Bullying tactics” are unnecessary, adding that “through her actions and words, Lisa has made it abundantly clear that she will cooperate with this investigation.”
Then again perhaps Page’s refusal to testify is more about not giving Congress ammunition for her former “lovebird” Peter Strzok’s scheduled testimony on Thursday.
As Politico noted on Tuesday, By obtaining Page’s testimony in a closed-door deposition on Wednesday, committee Republicans would be armed with material to grill Strzok the next day.
On Tuesday morning, President Trump suggested over Twitter that Page and Strzok were “getting cold feet on testifying about the Rigged Witch Hunt headed by 13 Angry Democrats,” in reference to the 13 Democrats on the Special Counsel.
Meanwhile, Jeffress said she received a message from the Department of Justice on Tuesday night around 11 p.m. granting Page’s request to review documents related to her testimony.
end
WE WILL SEE YOU ON THURSDAY NIGHT.
HARVEY