GOLD: $1241.15 DOWN $5.35 (COMEX TO COMEX CLOSINGS)
Silver: $15.80 DOWN 16 CENTS (COMEX TO COMEX CLOSINGS)
Closing access prices:
Gold $1241.40
silver: $15.82
For comex gold:
JULY/
NUMBER OF NOTICES FILED TODAY FOR JULY CONTRACT:2 NOTICE(S) FOR 200
TOTAL NOTICES SO FAR 95 FOR 9500 OZ (0.2954 tonnes)
For silver:
JUNE
12 NOTICE(S) FILED TODAY FOR
60,000 OZ/
Total number of notices filed so far this month: 5160 for 25,800,000 oz
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Bitcoin: BID $6199/OFFER $6284: UP $89(morning)
Bitcoin: BID/ $6137/offer $6222: UP $28 (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: 1252.38
NY price at the same time: 1247.00
PREMIUM TO NY SPOT: $5.38
Second gold fix early this morning: 1243.38
USA gold at the exact same time:1245.20
deficit TO NY SPOT: $1.82???
China is controlling the gold market
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 277 CONTRACTS FROM 208,111 UP TO 208,079 DESPITE YESTERDAY’S GOOD 12 CENT GAIN 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 29 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 SMALL SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP: 1116 EFP’S FOR SEPT. , 0 EFP’S FOR DECEMBER AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE: OF 1116 CONTRACTS. WITH THE TRANSFER OF 1116 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 1116 EFP CONTRACTS TRANSLATES INTO 5.580 MILLION OZ ACCOMPANYING:
1.THE 12 CENT GAIN 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 29.210 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:
15,697 CONTRACTS (FOR 9 TRADING DAYS TOTAL 15,697 CONTRACTS) OR 78.48 MILLION OZ: (AVERAGE PER DAY: 1744 CONTRACTS OR 8.720 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH OF JULY: 78.48 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 11.21% 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: 1,738.2 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 277 DESPITE THE GOOD 12 CENT GAIN IN SILVER PRICE. THE CME NOTIFIED US THAT WE HAD A FAIR SIZED EFP ISSUANCE OF 1116 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: 1116 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: 1116). TODAY WE GAINED A FAIR SIZED: 1393 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:
i.e 1116 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH AN INCREASE OF 277 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 12 CENT RISE IN PRICE OF SILVER AND A CLOSING PRICE OF $15.96 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 29 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. 1.042 MILLION OZ TO BE EXACT or 149% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT JULY MONTH/ THEY FILED AT THE COMEX: 12 NOTICE(S) FOR 60,000 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: 29.210 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 ROSE BY A FAIR SIZED 3421 CONTRACTS UP TO 510,768 WITH THE SMALL RISE IN THE GOLD PRICE/YESTERDAY’S TRADING (A GAIN IN PRICE OF $3.20). 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 4777 CONTRACTS : AUGUST SAW THE ISSUANCE OF: 3777 CONTRACTS, DECEMBER HAD AN ISSUANCE OF 1000 CONTACTS AND THEN ALL OTHER MONTHS ZERO. The new COMEX OI for the gold complex rests at 510,768. 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 GOOD OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 8,198 CONTRACTS: 3421 OI CONTRACTS INCREASED AT THE COMEX AND 4777 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN: 8,198 CONTRACTS OR 819,800 OZ = 25.49 TONNES. AND STRANGELY ALL OF THIS HUGE DEMAND OCCURRED WITH A SMALL GAIN IN THE PRICE OF GOLD YESTERDAY TO THE TUNE OF $3.20???
YESTERDAY, WE HAD 3851 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JUNE : 70,841 CONTRACTS OR 7,084,100 OZ OR 220.34 TONNES (9 TRADING DAYS AND THUS AVERAGING: 7871 EFP CONTRACTS PER TRADING DAY OR 8,787,100 OZ/ TRADING DAY),,
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 9 TRADING DAYS IN TONNES: 220.34 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES
THUS EFP TRANSFERS REPRESENTS 220.34/2550 x 100% TONNES = 8.05% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***
ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 4,323.23* 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 FAIR SIZED INCREASE IN OI AT THE COMEX OF 3421 DESPITE THE SMALL $3,20 GAIN IN PRICING GOLD UNDER TOOK YESTERDAY // . WE ALSO HAD AN FAIR SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 4777 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 4777 EFP CONTRACTS ISSUED, WE HAD A STRONG NET GAIN OF 8,198 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
4777 CONTRACTS MOVE TO LONDON AND 3421 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 25.49 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THIS DEMAND OCCURRED WITH A SMALL GAIN OF $3.20 IN TRADING. AT THE COMEX!!!. THE COMEX IS AN OUTRIGHT FRAUD
we had: 2 notice(s) filed upon for 200 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 $5.35 TODAY: /
ANOTHER HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.83 TONNES OF GOLD AND THIS GOLD WAS USED IN THE RAID.
/GLD INVENTORY 795.19 TONNES
Inventory rests tonight: 795.19 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 16 CENTS:
NO CHANGES IN SILVER INVENTORY AT THE SLV DESPITE THE RAID
/INVENTORY RESTS AT 326.752 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 277 CONTRACTS from 208,111 UP TO 208,079 (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:
1116 EFP CONTRACTS FOR SEPT., 0 EFP CONTRACTS FOR DECEMBER AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1116 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 748 CONTRACTS TO THE 1116 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A NET GAIN OF 8393 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 6.965 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESS AN INITIAL STANDING OF OVER 29 MILLION OZ AND YET ALL OF THIS DEMAND OCCURRED DESPITE A FAIR 12 CENT GAIN 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 SMALL SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 12 CENT GAINTHAT SILVER UNDERTOOK IN PRICING ON TUESDAY. BUT WE ALSO HAD ANOTHER FAIR SIZED 1116 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
i)FRIDAY MORNING/THURSDAY NIGHT: Shanghai closed DOWN 6.47 POINTS OR 0.23% /Hang Sang CLOSED UP 44.61 POINTS OR 0.16%/ / The Nikkei closed UP 409.39 POINTS OR 1.85% /Australia’s all ordinaires CLOSED UP 0.03% /Chinese yuan (ONSHORE) closed DOWN at 6.6982 AS POBC RESUMES ITS HUGE DEVALUATION /Oil DOWN to 70,25 dollars per barrel for WTI and 74.06 for Brent. Stocks in Europe OPENED GREEN EXCEP SPAIN //. ONSHORE YUAN CLOSED DOWN AT 6.6982 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.6761:HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES AT FULL BLAST: 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 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/Russia
The USA blasts China and Russia as they both provided sneaky oil sales to North Korea
(courtesy zerohedge)
b) REPORT ON JAPAN
3 c CHINA
i)China
Defaults across China rises which will force Chinese banks to raise tier one accounts. At 11 pm est
usa dollar vs on shore yuan: 6.6737 and off shore: 6.6911/ at 7 am 6.6984 for onshore/6.7170 offshore
( zerohedge)
ii)Trump will not be happy with this but it seems that China is slowly down immensely. Although its exports rose marginally it was its imports that declined hugely which may have been the tariffs implimented
( zero hedge)
iii)China’s trillion dollar sovereign Wealth Fund wants permission to do a Japan: purchase domestic stocks and corporate bonds. This will not end well.
( zerohedge)
iv)First it was Jim Rickards and now Brandon Smith is pounding the table that China is accumulating not only gold but SDR’s. Obviously China is preparing for a global reset
( Brandon Smith/Alt Market.com)
4. EUROPEAN AFFAIRS
i))UK
In a bombshell interview, Trump slams Theresa May and her soft Brexit claiming the uSA would still have to negotiate trade with the EU at a time that the uSA wants the EU to lower its tariffs which it refuses to do. This would force the USA not to trade with the UK and that would kill the pound. Also Trump states that BoJo (Boris Johnson) would make a great Prime Minister
( zerohedge)
ii)Italy/Germany/EU
iii)Strange: UK Police has found the ‘container’ used to carry the deadly Novichok nerve gas agent.
It was found in the house of the gentleman who is in critical condition. His partner died. The two Russians survived.
(courtesy zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
7. OIL ISSUES
i)The large Permian basin is increasing in production but these guys need key pipelines to carry the oil.
This is causing huge discounts and are hurting the owners of the basin.
( Paraskova/OilPrice.com_)
ii)Trump may tap up to 30 million barrels of oil from SPR to halt the rising gas price
(courtesy zerohedge)
8. EMERGING MARKET
Pakistan
When will this world learn? Massive blast in Pakistan kills 128 ahead of elections.
( zerohedge)
9. PHYSICAL MARKETS
i)Seems that everybody is warning us that we are running out of physical gold
(courtesy zerohedge)
ii)As promised, with the new government we would eventually see South Africa’s gold production would fall in a similar fashion to what we witnessed with Zimbabwe (Rhodesia). Good reason for gold to fall today with this news
( Bloomberg)
10. USA stories which will influence the price of gold/silver)
i)MARKET TRADING/EARLY MORNING
S and P rises despite the drop in 10 and 30 yr bonds which makes no sense. Somebody is right and somebody is wrong and I would guess that it is the bond players that are right
( zerohedge)
a)This is interesting!! Import prices slide considerably in June while export prices surged!! Is Europe sending deflation to the USA??
( zerohedge)
b)Seems that the trade war is effecting sentiment; U. of Michigan Sentiment slumps to a 6 month low
( zerohedge)
Interesting: The New York Times which has been lambasting Trump from the beginning of time, now states that Trump “got everything that Obama has ever asked for”
(courtesy zerohedge)
iv)SWAMP STORIES
a)Have fun with these 5 video clips of Strzok being lambasted
(courtesy Michael Snyder)
( zerohedge)
Trading Volumes on the COMEX
PRELIMINARY COMEX VOLUME FOR TODAY: 292,551 contracts
CONFIRMED COMEX VOL. FOR YESTERDAY: 267,021 CONTRACTS
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And now for the wild silver comex results.
Total silver OI ROSE BY A SMALL SIZED 277 CONTRACTS FROM 207,802 UP TO 208,079 (AND A LITTLE CLOSER TO THE THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS) DESPITE THE GOOD 12 CENT GAIN IN SILVER PRICING/ YESTERDAY. SINCE WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF JULY, WE WERE INFORMED THAT WE FAIR SIZED 1116 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: 1116. ON A NET BASIS WE GAINED 1393 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 277 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1116 OI CONTRACTS NAVIGATING OVER TO LONDON.
NET GAIN ON THE TWO EXCHANGES: 1393 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 25 contacts to stand at 694 contracts. We had 35 notices filed yesterday so we continue where we left off yesterday as guys refuse to take any more silver ETF’s and instead seek physical delivery at the comex. We gained 10 contracts or an additional 50,000 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 gained 65 contracts to stand at 1178. The next active delivery month after August for silver is September and here the OI fell by 1775 contracts DOWN to 153,970
We had 12 notice(s) filed for 60,000 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 13.2017 WE HAD 734 SILVER COMEX OI OUTSTANDING VS TODAY: 694
SO WE ARE RIGHT ON PAR WITH LAST YR.
INITIAL standings for JULY/GOLD
JULY 13/2018.
| Gold | Ounces |
| Withdrawals from Dealers Inventory in oz | nil oz |
| Withdrawals from Customer Inventory in oz |
nil OZ
|
| Deposits to the Dealer Inventory in oz | NIL oz |
| Deposits to the Customer Inventory, in oz | nil
oz |
| No of oz served (contracts) today |
2 notice(s)
200 OZ
|
| No of oz to be served (notices) |
144 contracts
(14400 oz)
|
| Total monthly oz gold served (contracts) so far this month |
95 notices
9500 OZ
.2954TONNES
|
| 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 2 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
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To calculate the INITIAL total number of gold ounces standing for the JULY. contract month, we take the total number of notices filed so far for the month (95) x 100 oz or 9300 oz, to which we add the difference between the open interest for the front month of JULY. (146 contracts) minus the number of notices served upon today (2 x 100 oz per contract) equals 23,900 oz,(.7433 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 (95 x 100 oz) + {(146)OI for the front month minus the number of notices served upon today (2 x 100 oz )which equals 23,900 oz standing in this NON – active delivery month of JULY .
We GAINED 2 contracts or an additional 200 oz will stand for comex delivery.
THERE ARE ONLY 7.4588 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 0.7433 TONNES STANDING FOR JULY
IN THE LAST 24 MONTHS 85 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 |
19,866.05 oz
Brinks
|
| Deposits to the Dealer Inventory |
nil
oz
|
| Deposits to the Customer Inventory |
8,680.600
oz
Delaware
|
| No of oz served today (contracts) |
12
CONTRACT(S)
(60,000 OZ)
|
| No of oz to be served (notices) |
682 contracts
(3,410,000 oz)
|
| Total monthly oz silver served (contracts) | 5160 contracts
(25,800,000 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 1 deposit 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 Delaware; 15,840.509 oz
total customer deposits today: 8680.600 oz
we had 1 withdrawals from the customer account;
i) Out of Brinks: 19,866.605 oz
total withdrawals: 19,866.605 oz
we had 1 adjustments/
i) Out of Scotia: 15,840.509 oz was adjusted out of the customer and this landed into the dealer account of Scotia
total dealer silver: 77.712 million
total dealer + customer silver: 280.458 million oz
The total number of notices filed today for the JULY. contract month is represented by 12 contract(s) FOR 60,000 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 5160 x 5,000 oz = 25,800,000 oz to which we add the difference between the open interest for the front month of JULY. (694) and the number of notices served upon today (12 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the JULY/2018 contract month: 5160(notices served so far)x 5000 oz + OI for front month of JULY(694) -number of notices served upon today (12)x 5000 oz equals 29,210,000 oz of silver standing for the JULY contract month
WE GAINED 10 CONTRACTS OR AN ADDITIONAL 50,000 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 29,210 MILLION OZ.
As I stated all this month of July:
“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: 76,805 CONTRACTS
CONFIRMED VOLUME FOR YESTERDAY: 69,282 CONTRACTS absolutely criminal
YESTERDAY’S CONFIRMED VOLUME OF 69282 CONTRACTS EQUATES TO 347 million OZ OR 49.5% OF ANNUAL GLOBAL PRODUCTION OF SILVER
COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott
1. Sprott silver fund (PSLV): NAV FALLS TO -2.96% (JULY 13/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.59% to NAV (JULY 13/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.96%-/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 3.71.
END
And now the Gold inventory at the GLD/
JULY 13/WITH GOLD DOWN $5.35 THE CROOKS RAID THE COOKIE JAR AGAIN TO THE TUNE OF 3.83 TONNES/INVENTORY RESTS AT 795.19 TONNES
JULY 12/WITH GOLD UP $2.30: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 799.02 TONNES
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
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
JULY 13/2018/ Inventory rests tonight at 795.19 tonnes
*IN LAST 410 TRADING DAYS: 131.62 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 360 TRADING DAYS: A NET 24,92 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
end
Now the SLV Inventory/
JULY 13/WITH SILVER DOWN 16 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 826.752 MILLION OZ.
JULY 12/WITH SILVER UP 12 CENTS TODAY: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.035 MILLION OZ/INVENTORY RESTS AT 826.752 MILLION OZ/
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/
JULY 13/2018:
Inventory 326.752 MILLION OZ
6 Month MM GOFO 2.00/ and libor 6 month duration 2.52
Indicative gold forward offer rate for a 6 month duration/calculation:
G0FO+ 2.00%
libor 2.52 FOR 6 MONTHS/
GOLD LENDING RATE: .52%
XXXXXXXX
12 Month MM GOFO
+ 2.79%
LIBOR FOR 12 MONTH DURATION: 2.49
GOFO = LIBOR – GOLD LENDING RATE
GOLD LENDING RATE = +.30
end
Major gold/silver trading /commentaries for FRIDAY
GOLDCORE/BLOG/MARK O’BYRNE.
Trump Is Serious About A Global Trade War
If you hadn’t realised by now, Donald Trump is serious
The copper price is sliding.
Chinese stocks are sliding.
Oil tanked by 7% at one point yesterday.
It does all rather suggest that maybe investors are really starting to worry about the burgeoning global trade war, and its impact on global growth.
And they’d be right to.
First things first. If you didn’t realise it already, then you need to get this into your head: Donald Trump is serious. He has believed for a long time in an “America First” world where the US stops playing the role of global policeman and instead looks out for itself.
As far as he’s concerned, other countries have been freeloading off the US and taking advantage of its good nature and overweening sense of responsibility for way too long.
Whether you agree with this or think it is deluded, is irrelevant. He’s the president. That’s how he thinks. That’s what his policies are aiming at.
He has also surrounded himself with advisers who agree with him. “Yes” men, you might say. That’s exactly what you’d have expected given his corporate history.
So talk of trade war is not a craft feint, or a bluff, or a tactic in some 3D chess game Trump is playing. It’s just what he wants.
Secondly, other countries are not keen to roll over and play nice or make concessions. National pride is one reason. Another is that they can’t quite believe that the established world order is being overturned. There’s a sense that “you can’t do that”.
He can. He is.
Given all that, then as Paul Ashworth of Capital Economics puts it, “it’s hard to see how a full-blown trade war can be avoided at this stage”. And that’s the reality that we, as investors, have to deal with.
So what does that mean?
A full-blown trade war would be an expensive business for everyone
So far, a 25% tariff has already been imposed on $34bn worth of Chinese imports. That will be increased to $50bn soon. And earlier this week, a list of another $200bn-worth of goods was published, with plans for a 10% tariff on those within the next few months. That’s pretty much half of what the US imports from China.
That’s just the start. Trump is also talking about imposing tariffs on imports of cars. This “would represent a significant escalation”, notes Ashworth. There are quite a few different options. The most damaging would be to impose tariffs on both finished vehicles and parts.
“A blanket 25% tariff on parts would devastate tightly integrated supply chains in North America, causing significant harm to the economies of Canada, Mexico and probably the US too.”
Eventually, says Ashworth, the US might even withdraw from the World Trade Organisation (WTO). If that happens, then arguably, it would be curtains for that particular institution, because there’s not much point in a world trade group that doesn’t include the biggest economy in the world.
And of course, this is all before you consider the impact of retaliation.
According to Andrew Hunter, also at Capital Economics, a “full-blown global trade war could eventually reduce world GDP by 2-3%, driven mainly by a loss of efficiency from the unwinding of global supply chains”.
The US would be more insulated from the impact than some countries, as exports account for a small percentage of GDP. But US multinationals – which make up a huge chunk of the S&P 500 – would take a “more severe” hit.
Note that not all of the current market worry is about trade wars. China appears to be serious about forcing its economy to deleverage. Every other day we’re hearing about another bond default. This is a good thing – it’s easy to forget these days that markets and capitalism have to allow failure in order to work – but it’s not an easy process, particularly when it has been put off for a long time.
However, there’s no doubt that the trade war is now the big threat to the global economy and to markets. This is threatening to get much messier.
News and Commentary
Gold prices subdued as dollar extends rally (Reuters.com)
Gold notches a gain after back-to-back session declines (MarketWatch.com)
U.S. inflation steadily firming; labor market strong (Reuters.com)
U.S. Budget Deficit Jumps in First Nine Months of Fiscal Year (Bloomberg.com)
U.S. budget deficit totals $74.9 billion in June (PBS.org)
Ex-Barclays Euribor trader Moryoussef convicted in absentia in Britain (Reuters.com)
Silver Krugerrand 2018 (First Ever) – Call And Pre-Order Yours Today
Silver Krugerrands will be available for delivery and storage on August 1, 2018
Global Trade War Is Escalating Fast (MoneyWeek.com)
China Plays for Time in Trade War With Subtle Shift in Rhetoric (Bloomberg.com)
China Has Been Preparing For A Trade War For Over A Decade (ZeroHedge.com)
Largest-Ever Sugar-Surplus In Recorded History” (ZeroHedge.com)
Another Billionaire Warns “We’re Running Out Of Gold” (SovereignMan.com)
Humane Immigration Will Make America Great Again. (GoldSeek.com)
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
Gold Prices (LBMA AM)
12 Jul: USD 1,244.85, GBP 942.10 & EUR 1,065.97 per ounce
11 Jul: USD 1,250.00, GBP 943.63 & EUR 1,068.38 per ounce
10 Jul: USD 1,253.70, GBP 946.17 & EUR 1,069.41 per ounce
09 Jul: USD 1,262.60, GBP 946.95 & EUR 1,072.70 per ounce
06 Jul: USD 1,254.20, GBP 947.55 & EUR 1,071.09 per ounce
05 Jul: USD 1,252.50, GBP 946.89 & EUR 1,071.64 per ounce
04 Jul: USD 1,256.90, GBP 951.47 & EUR 1,079.80 per ounce
Silver Prices (LBMA)
12 Jul: USD 15.84, GBP 12.00 & EUR 13.58 per ounce
11 Jul: USD 15.92, GBP 12.02 & EUR 13.59 per ounce
10 Jul: USD 15.93, GBP 12.04 & EUR 13.61 per ounce
09 Jul: USD 16.21, GBP 12.15 & EUR 13.76 per ounce
06 Jul: USD 16.00, GBP 12.09 & EUR 13.66 per ounce
05 Jul: USD 15.95, GBP 12.04 & EUR 13.65 per ounce
04 Jul: USD 16.05, GBP 12.15 & EUR 13.78 per ounce
Recent Market Updates
– Ponzi Economy Will Lead To Next Global Financial Crisis
– World Cup Is 200 Ounces Of Gold Worth £140,000 – 30% Less Than Harry Kane’s Weekly Wage
– Chaotic BREXIT More Likely: Risk To London, While Frankfurt, Luxembourg, Paris and Dublin Benefit
– VIDEO: Italy €2.4 Trillion Debt To Create Eurozone Contagion and Global Debt Crisis?
– U.S. China Trade War Escalates as Russia and China Accumulate Gold
– Irish Gold Money Rings Found – Mystery Surrounds What May Be Ancient, Pre-Historic Currency
– Gold $10,000 In Currency Reset? Russia, China Gold Demand To Overwhelm Gold Futures Manipulation (GOLDCORE VIDEO)
– Italian Debt – A Financial Disaster Waiting To Happen
– As The Currency Reset Begins – Get Gold As It Is “Where The Whole World Is Heading”
– Buy Gold Or Bitcoin As The “Liquidity Party” Is Ending?
– Why Russia and Turkey Diversifying Into Gold May Signal A Bigger Global Shift
– London House Prices Fall 1.9% In Quarter – Bubble Bursting?
– Gold Exports To London From U.S. Surge 152% In 2018
– Manipulation of Gold & Silver by Bullion Banks Is “Undeniable”
– “Perfect Environment For Gold” As Fed Will Weaken Dollar and Create Inflation – Rickards
– Russia Buys 600,000 oz Of Gold In May After Dumping Half Of US Treasuries In April
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
Seems that everybody is warning us that we are running out of physical gold
(courtesy zerohedge)
Another Billionaire Warns “We’re Running Out
Of Gold”
A few months ago SovereignMan.com’s Simon Black published a note explaining that major gold discoveries are shrinking.
Simply put, mining companies are no longer finding vast, new deposits of gold to replace their aging mines.
I quoted Pierre Lassonde, the billionaire founder of gold royalty giant Franco-Nevada and former head of Newmont Mining:
If you look back to the 70s, 80s and 90s, in every one of those decades, the industry found at least one 50+ million-ounce gold deposit, at least ten 30+ million-ounce deposits, and countless 5 to 10 million ounce deposits.
But if you look at the last 15 years, we found no 50-million-ounce deposit, no 30-million-ounce deposit and only very few 15 million ounce deposits.
Pierre Lassonde is one of the most well-respected and knowledgeable mining experts in the world. And he thinks we’re reaching ‘peak gold’.
But, as Simon reports today, he’s not alone.
Last month, Rudy Fronk, Chairman and CEO of Seabridge Gold noted:
“Peak gold is the new reality in the gold business with reserves now being mined much faster than they are being replaced.”
Nick Holland, CEO of South Africa’s largest gold producer Gold Fields:
“We were all talking about how production was going to increase every year. I think those days are probably gone.”
Kevin Dushnisky, President of mining giant Barrick Gold:
“Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook.”
But the biggest warning comes from resource legend Ian Telfer, chairman of Goldcorp. In an interview with Financial Post, Telfer said:
“If I could give one sentence about the gold mining business… it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years.
Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.”
It’s hard to pinpoint a top or a bottom. But there is an interesting opportunity here since gold has fallen in price over the last several weeks thanks to an inexplicable surge in the US dollar.
The long-term fundamentals seem pretty obvious– the people responsible for supplying the world with gold are saying the world is running out of gold and that supply is declining at an alarming rate.
With a commodity like oil, technology tends to solve the problem of declining supply through more efficient production methods.
When ‘peak oil’ started becoming a problem 10 years ago, the industry developed new fracking and horizontal drilling technologies. And other industries like solar and wind began developing better substitutes for oil.
But there’s not really a substitute for gold. And the biggest players in the space are saying we’re running out.
END
As promised, with the new government we would eventually see South Africa’s gold production would fall in a similar fashion to what we witnessed with Zimbabwe (Rhodesia). Good reason for gold to fall today with this news
(courtesy Bloomberg)
May’s gold output in South Africa falls most
since February 2017
Submitted by cpowell on Thu, 2018-07-12 16:04. Section: Daily Dispatches
Ana Monteiro
Bloomberg News
Thursday, July 12, 2018
Gold output in South Africa, once the world’s biggest producer of the metal, declined in May by the greatest amount since February 2017.
Production dropped 16.2 percent from a year earlier, compared with a revised 5.8 percent contraction in April, Pretoria-based Statistics South Africa said today in a statement on its website. That’s an eighth straight month of decreases. …
… For the remainder of the report:
https://www.bloomberg.com/news/articles/2018-07-12/south-african-gold-ou..
end
A joke: all bankers are guilty of rigging interest rates, libor as well as gold and silver
(courtesy Reuters)
Former Barclays trader found guilty of rigging interest rate
Submitted by cpowell on Thu, 2018-07-12 16:10. Section: Daily Dispatches
By Kirstin Ridley
Reuters
Thursday, July 12, 2018
LONDON — A French former trader with Barclays, tried in his absence by a London court in an 11-week trial, has been convicted of helping to mastermind a five-year plot to rig global interest rates.
Philippe Moryoussef, a 50-year-old former senior derivatives trader, was found guilty of conspiracy to defraud by dishonestly manipulating Euribor — or Euro interbank offered rate — between January 2005 and December 2009
The jury at Southwark Crown Court acquitted German Achim Kraemer, a Deutsche Bank manager still employed by the bank.
Reporting restrictions were lifted today after the jury failed to reach a verdict on three former Barclays co-defendants Carlo Palombo, an Italian-born former junior trader, Sisse Bohart, a Danish former junior trader and rate submitter, and her British former boss, Colin Bermingham.
A sixth defendant, 46-year-old former Deutsche Bank star trader Christian Bittar, a Frenchman who investigators said was once one of the world’s best-paid traders, pleaded guilty before the trial began. He is already in custody. …
… For the remainder of the report:
https://www.reuters.com/article/us-britain-euribor-verdict/former-barcla…
* * *
end
Nicholas Biezanek to me via email:
This Capped (Pegged) Volcano May Blow at any Time
Nicholas Biezanek
I have been searching for any informed commentary concerning Jim Rickard’s claim that the Chinese have pegged the gold price at SDR 900 for some time now. After sighting nothing of note in this regard, I checked on the paper price of gold this morning-it was $1,244 per troy ounce but I note that is has declined just now to below $1,240.. The ‘peg’ at SDR 900 should have resulted in a gold price of about $1,264 but Chinese (currency) pegs are often defined in ranges, so perhaps this calculation validates the tenor of Rickard’s claims.
How is this peg maintained? The physical market for gold is irrelevant in setting the headline gold price since the paper Comex market controls all the pricing that is ever sighted and the pricing of any physical transaction is never disseminated-never ever. The LBMA was recently instructed to discontinue its project to address this vacuum of information in respect of physical price dissemination at the transactional level (or groupings of transactions)
Let us examine again that which we do know. For several months now the loco London vault precious metal holdings have been metronomically constant at about 765 million ounces for silver (excluding SLV gold held in trust by JP Morgan) and at about 1,700 tonnes in the case of gold (excluding BOE holdings and GLD gold held in trust by the various custodians). It is clearly an insult to anybody’s intelligence to refer to ‘exchange for physical’ transactions and thereby imply that these entries imply any execution via physical delivery of precious metals from the LBMA market. Now let us examine the data in the table below:
In respect of gold, this farcical position on the Comex is even more self-evident as only 7 tonnes of registered gold is available to support an open interest of 1,578 tonnes-a fractional reserving ratio of more than 225. Shouldn’t all these unexplained EFPs be added back to the reported open interest to compute the true total? This would result in a totally untenable figure, although would anybody notice or even care these days-insanity is now ingrained in the world order of things. Presumably the central planners felt they have nowhere else to go but to resort to this manipulative (fraudulent) reporting as one last throw of the dice to maintain the paper suppression of the physical gold/silver price.
Perhaps these EFP line items are merely the daily removal from the promulgated open interest numbers of all those aggregated positions associated with the maintenance of this Chinese peg. Perhaps China is engineering these pegs in order that the unconscionable algos do not put a single digit handle on the silver price and a triple digit handle in respect of paper gold prices. The term EFP would then have a meaning something like ‘Eliminations For Pegs’. Rob Kirby spoke about his anger in his latest KWN interview. Why must we continue to speculate and postulate in the dark about the true nature of these EPF line items given the enormous physical volumes accumulated under these headings in YTD 2018 alone, never mind any legacy volumes relating to prior years?
Where did these EFP volumes go ‘to die? Maybe these invisible transactions have merely gone into hibernation awaiting resurrection as ammunition at a time of China’s choosing. If China’s allied intention is to accumulate as much physical gold as possible by reference to these corrupt and suppressed precious metal prices, then clearly this plan has a limited remaining shelf life given the reported gossamer amounts of physical metal available for delivery; remember also that the maturity of the inaugural petroyuan contract draws nigh. (Harvey: Sept)
end
It is obviously time to go back to basics. I say this based on the emails we’ve received this week which ranged from tears to tirades regarding gold and silver price action. While speaking with a friend a few months back (during a period of price weakness), I said tongue in cheek that I should write an article titled “We are not your psychoanalysts”! The amount of fear was and is astonishing to me. We have tried to demonstrate with math, logic and history what the ending is. The problem for most is, even if the ending is understood they “want it and they want it now”!
So, in an effort to help the panicked or despondent, let’s go back to the very basics. Below is an image of John Exter’s pyramid;
You will notice the pyramid is inverted. 100 years ago, this pyramid was inverted but obviously much smaller altogether. What has happened over the last 100+ years is that more and more “derivatives” of all sorts have been created. Also, “promises” of all sorts have been made. When I say promises, we are talking about pension plans, health aid, welfare etc. that promise current and future benefits. Basically, via the use of credit (and derivatives since the 1970’s), asset values have been continually inflated and re inflated. Without credit and without derivatives, valuations of most ALL assets would be only tiny fractions of what they are today.
The size and scope of the pyramid has gotten larger and larger in relation to the base (gold and silver). Notice that as you go higher and higher up the pyramid, the assets carry more and more risk. It is the high risk assets that now make up a larger and larger majority of all assets. Thus, “systemic” risk has continually grown over the years as the highest risk assets are now the vast majority of what society considers “assets”. As a side note, everything above gold on the pyramid is “derived” from money (gold), the further away from money …the lesser connection to (think money) value.
Looking at the pyramid, the vast majority of assets are “promises” to pay or perform something in the future. Gold and silver are different, they don’t promise anything at all in the future. Rather, theirs is simply a past promise. Gold and silver only promise that capital, labor and equipment WAS USED in the past to create it. This in a nutshell is what gold is all about. It already is pure money and the capital was already expended to create it. It does not need to promise anything in the future (ie. pay interest) to have value today. For example, what value would any debt security have if it promised to never pay any interest? (Yes I know, we almost live in that world now with some debt trading at negative yields but that only proves the point of insanity in our society today!).
Look around you, everyone and everything is in debt or has value created by debt. Sovereign treasuries all over the world now have debt to GDP levels that 30 years ago were signposts to being banana republics (and they are the ones who issue what the public considers money?). Pensions are woefully underfunded even with asset values at all time (and unsustainable) highs. Credit is now regularly offered with little to no proof of ability to pay back. Loans have had maturities extended so borrowers could “fit” into the amounts borrowed. …And on the other side, we have seen lenders/investors accept ridiculously low rates from deadbeats because “they needed yield”. Don’t ever forget, the vast majority of what the world now considers “assets”, require the performance of a promise(s) to perform. When the dust settles, this statement will be wholly obvious to all!
Folks, we live in a world of promises that cannot be kept. Where exactly do you believe the capital will flow to when promises cascade into broken promises? It will be THE largest transfer of wealth in all of history …INTO gold and silver because they don’t promise anything at all. Gold and silver are already “kept promises” that labor, capital and equipment were expended to create them. They are “proof” of kept promises!
These are trying times for those logically holding gold and silver. A financial collapse should have occurred sometime over the last three years but has not. Because it has not happened yet is not in any way proof that it will not. In fact, “math” is never refuted, only delayed. I will leave you with an example; is there any possible way London has the ability to deliver 3-4 years worth of global gold and silver production to their EFP’s? It’s OK, you know the answer … yet still worry over current price?
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Your early FRIDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED UP TO 6.6982/HUGE DEVALUATION FOR THE PAST TWO WEEKS RESUMES AT FULL BLAST/ /shanghai bourse CLOSED DOWN 6.47 POINTS OR 0,23% /HANG SANG CLOSED UP 44,61 POINTS OR 0.16%
2. Nikkei closed UP 409,39 POINTS OR 1.85% / /USA: YEN RISES TO 112.58/
3. Europe stocks OPENED GREEN EXCEPT SPAIN / /USA dollar index RISES TO 95.13/Euro FALLS TO 1.1627
3b Japan 10 year bond yield: RISES TO . +.04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.58/ 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:: 70.25 and Brent: 74.06
3f Gold DOWN/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.33%/Italian 10 yr bond yield DOWN to 2.58% /SPAIN 10 YR BOND YIELD DOWN TO 1.26%
3j Greek 10 year bond yield FALLS TO : 3.85
3k Gold at $1240.20 silver at:15.79 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble DOWN 6/100 in roubles/dollar) 62.30
3m oil into the 70 dollar handle for WTI and 74 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 112.58 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 1.0054 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1691 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 +0.37%
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)
Futures Fade Gains As Yuan Tumbles On Latest
Chinese Data
Traders were unfazed by Friday the 13th, and instead Asian and European stock markets burst higher out of the gate, riding on the Thursday US market gains which came as the U.S. and China signaled they were open to restarting talks over trade after days of exchanging threats, although Treasury Secretary Mnuchin said Beijing must commit to deeper economic reforms.
However, US S&P futures promptly faded all gains and were traded unchanged, just below 2800, following the latest economic data from China, which showed posted a modest slowdown as reported earlier, but most importantly, showed that China’s trade surplus with America hit a new all time high…
…serving as a stark reminder that trade tensions aren’t going away, even as investors’ focus shifted to second-quarter earnings. The result was a roundtrip in the E-mini which was hugging the unchanged line.
Earlier, the Stoxx Europe 600 Index edged higher, amid subdued volume as commodity producers underperformed on Chinese fears. Meanwhile, stocks in Asia were set for a first weekly advance in five as benchmarks in Japan, Hong Kong and South Korea gained.
The latest Chinese credit creation data did not help sentiment, with Total Social Financing once again badly missing consensus amid a broad crackdown on shadow lending, which in turn pushed China’s M2 to a new all time low.
A report that China’s $941 billion sovereign wealth fund may move money home weighed on the gauges.
While Chinese stocks trod water…
The Chinese news catalyzed a sharp reversal in the offshore Yuan, which slumped from 6.67 back to 6.72 and back below the 6.7000 levels that prompted intervention not so long ago, both verbal and physical, but no official or unofficial ‘action’ seen so far to leave conspiracy theorists thinking about devaluation in the US-China trade dispute rather than counter import tariff measures.
As a result of the Yuan weakness, the Bloomberg Dollar Spot Index rises 0.3%, extending its advance this week to 1% even as volumes in major currencies are relatively muted ahead of the start of earnings season.
In other FX news, the pound slipped as much as 0.8% to 1.3103, set for its biggest weekly drop since May, weakening after Trump said Theresa May’s soft Brexit plans may kill off a trade deal with the U.S.
Meanwhile, the yen is headed for its worst week since September as a rally in equities supported risk-taking even amid U.S.-China trade tensions.
In rates, the US 10Y yield is unchanged, while European bonds edge higher across the curve with core markets leading gains.
Investors will feel some relief as earnings season gets underway in earnest, allowing attention to pivot away from trade relations. The latter seemed to ease somewhat, with officials in Beijing appearing to moderate their responses to Trump’s tariff threats amid a slowing economy, falling stock market and weakening currency. Still, China’s monthly trade surplus with the U.S. rose to a record in June and exports to the nation also soared, underlining the cause of the escalating trade war.
For those who missed the big overnight news, late on Thursday President Trump warned UK PM May that a soft Brexit would probably kill a potential future trade deal between UK and US as they would be dealing with the EU instead of the UK. This also comes amid reports that UK PM May could suffer the defeat of a crucial Brexit bill as early as Monday after Eurosceptics reacted angrily to the white paper she published yesterday.
Oil is currently trading in the red, with Brent -1.0% and WTI -0.3% as we approach the weeks end, and is set for its second consecutive weekly fall. Both measures are finding support at moving average levels, however, with WTI still supported by its 50DMA (USD 69.43/BBL), and Brent finding support at its 100DMA (USD 73.07/BBL) level. Russian Energy Minister Novak said he is not ruling out an output adjustment depending on other countries or a quick move on >1mln BPD from OPEC+ if needed. He also said he sees Russia’s output boost by the end of July at 200k BPD.
Gold prices are sliding as the DXY is extending its rally past the 95.000 level. Shanghai steel has hit a 10 month high on the back of low inventories and source reports suggesting the closure of steel mills in China’s largest steel making city, Tangshan, for 5 days amid pollution concerns. Copper is down 0.5% and set for the 5th consecutive weekly fall as US-China trade concerns are weighing on the construction material.
Today’s data include University of Michigan Consumer Sentiment Index. Citigroup and JPMorgan are among companies reporting earnings.
Market Snapshot
- S&P 500 futures little changed at 2,800.75
- STOXX Europe 600 up 0.4% to 385.76
- MXAP up 0.5% to 165.20
- MXAPJ up 0.3% to 539.05
- Nikkei up 1.9% to 22,597.35
- Topix up 1.2% to 1,730.07
- Hang Seng Index up 0.2% to 28,525.44
- Shanghai Composite down 0.2% to 2,831.18
- Sensex up 0.2% to 36,607.85
- Australia S&P/ASX 200 unchanged at 6,268.39
- Kospi up 1.1% to 2,310.90
- German 10Y yield fell 1.9 bps to 0.338%
- Euro down 0.5% to $1.1620
- Italian 10Y yield fell 6.5 bps to 2.358%
- Spanish 10Y yield fell 1.4 bps to 1.272%
- Brent futures down 1% to $73.73/bbl
- Gold spot down 0.5% to $1,240.89/oz
- U.S. Dollar Index up 0.4% to 95.20
Top Overnight News
- President Donald Trump dealt a double blow to U.K. Prime Minister Theresa May, saying her plans for a soft Brexit would likely end hopes of a trade deal with the U.S. and that Boris Johnson, who quit her cabinet this week, would be a “great” leader
- China’s monthly trade surplus with the U.S. rose to a record in June and exports to the nation also soared, underlining the cause of an escalating trade war between the world’s two largest economies
- European Union is set to throw embattled British Prime Minister May a lifeline in Brexit talks because of concern the biggest risk to getting a deal done is now whether she can cling to power
- Britain’s financial industry slammed Prime Minister May’s latest proposal for Brexit, with some calling it the worst outcome possible
- U.S. and China signaled they were open to restarting talks over trade after days of exchanging threats, though Treasury Secretary Mnuchin said Beijing must commit to deeper economic reforms
- China’s monthly trade surplus with the U.S. rose to a record in June and exports to the nation also jumped, underlining the cause of an escalating trade war between the world’s two largest economies.
- Bonds in Indonesia, India and Australia are witnessing a flattening of yield curves that’s showcasing the challenges these formerly-favored markets face as dollar liquidity tightens
- North Korea has breached the cap on fuel imports imposed by the United Nations Security Council, likely using illicit transfers between tankers at sea, according to the U.S. government.
- With the Fed still raising rates and President Trump still increasing tariff threats, the selloff in markets may only get worse, market players say
- BNP Paribas SA, Credit Agricole SA and four other French lenders won a European Union court fight against the European Central Bank’s refusal to change the way it calculates the leverage ratio
Asian equity markets were mostly higher as the region took impetus from the upside in Wall St where all majors extended on gains after China’s lack of retaliation and in which tech outperformance pushed the Nasdaq to a fresh record high. This led to a positive open for ASX 200 (-0.1%) and Nikkei 225 (+1.9%) although the Australia index then floundered amid weakness in its top-weighted financials sector, while the Japanese benchmark sustained its outperformance as exporters cheered a weaker currency and with a surge in Fast Retailing on strong earnings. Elsewhere, Hang Seng (+0.2%) conformed to the predominantly positive risk tone in the region, while Shanghai Comp. (-0.2%) was negative after the PBoC refrained from reverse repo operations and with some jitters ahead of Chinese Trade Data, although the mainland index has since moved off its lows after the PBoC later announced an MLF operation and after data printed mixed with a larger than expected surplus, which eased some of the data-related fears. Finally, 10yr JGBs were flat with demand sapped amid outperformance of riskier assets in Japan, although downside was also stemmed by the BoJ’s presence for JPY 670bln of JGBs in the belly to super-long end. PBoC refrained from reverse repos, but later announced to lend CNY 188.5bln via 1yr Medium-term Lending Facility. PBoC set CNY mid-point at 6.6727
Top Asian News
- Hedge Funds Favor Tiny Stocks Instead of China’s Tech Giants
- Ex- PM Sharif Heads to Pakistan to Face Jail Before Elections
- Viva Closes Lower After Biggest Australian IPO in 4 Years
European equities are largely in the green, with the Euro Stoxx 50 (+0.2%) breaking through its 50DMA in late European trade yesterday and finding support at this level (3,452) this morning. Tech stocks are leading the gains (Infineon +1.7%, Micro Focus +4.3%) and all sectors positive as the positive sentiment from the US continues into European trade. The IBEX (-0.3%) is once again the only index in the red, and fallen through its 50DMA, with bank stocks extending the losses seen in yesterday’s trade (BBVA -1.2%, Santander -1.1%). The FTSE 100 is outperforming as the GBP is softer. ThyssenKrupp (-0.6%) have named Guido Kerkhoff as their new CEO
Top European News
- Danske Bank Has Criminal Complaint Brought Against It by Browder
- French Banks Win EU Court Fight Over ECB Leverage Ratio
- Gilts Bid Forces Stops in Bund as Trump Comment Weighs on Cable
- EU Backs Bulgaria’s Bid to Join Euro Waiting Room in a Year
In FX, the DXY index is back above 95.000 and seemingly heading for strong close to the week, with momentum to challenge the current ytd high (95.531 from June 28) given blanket gains vs G10 peers. GBP/NZD – An unfortunate, if not unlucky Friday 13th for the Pound and Kiwi thus far, with Cable hit by more negative White Paper headlines amidst reports that US President Trump has delivered a damning verdict via a warning to UK PM May about the ‘soft’ proposal killing prospects of a trade deal between the 2 nations. Market contacts noted stops on a break of 1.3175 after the loss of 1.3200 and there is little in the way of support before the next psychological level at 1.3100 vs a circa 1.3105 low, and ahead of a speech from BoE’s Cunliffe due at 12.30BST. Meanwhile, Nzd/Usd has retreated through 0.6750 following a disappointing NZ manufacturing PMI overnight. EUR – The single currency also a victim of overall Dollar strength, or vice-versa, and looking vulnerable for a deeper pull-back from recent peaks having breached some key chart supports (like the 20 DMA at 1.1654 and a 50% Fib at 1.649 from the 1.1508-1.1790 rally from 2018 low to nearly July peak), with 1.1600 next in sight. CNH – The off-shore Yuan is back below 6.7000 vs the Usd and levels that prompted intervention not so long ago, both verbal and physical, but no official or unofficial ‘action’ seen so far to leave conspiracy theorists thinking about devaluation in the US-China trade dispute rather than counter import tariff measures.
In commodities, oil is currently in the red, with Brent -1.0% and WTI -0.3% as we approach the weeks end, and is set for its second consecutive weekly fall. Both measures are finding support at moving average levels, however, with WTI still supported by its 50DMA (USD 69.43/BBL), and Brent finding support at its 100DMA (USD 73.07/BBL) level. Russian Energy Minister Novak said he is not ruling out an output adjustment depending on other countries or a quick move on >1mln BPD from OPEC+ if needed. He also said he sees Russia’s output boost by the end of July at 200k BPD Gold prices are sliding as the DXY is extending its rally past the 95.000 level. Shanghai steel has hit a 10 month high on the back of low inventories and source reports suggesting the closure of steel mills in China’s largest steel making city, Tangshan, for 5 days amid pollution concerns. Copper is down 0.5% and set for the 5th consecutive weekly fall as US-China trade concerns are weighing on the construction material.
US Event Calendar
- 8:30am: Import Price Index MoM, est. 0.1%, prior 0.6%; Import Price Index YoY, est. 4.6%, prior 4.3%
- Export Price Index MoM, est. 0.2%, prior 0.6%; Export Price Index YoY, prior 4.9%
- 10am: U. of Mich. Sentiment, est. 98, prior 98.2; Current Conditions, prior 116.5; Expectations, prior 86.3
- 11am: Fed Releases Monetary Policy Report to Congress
- 12:30pm: Fed’s Bostic Holds Town Hall Chat in Northern Virginia
3. ASIAN AFFAIRS
i)FRIDAY MORNING/THURSDAY NIGHT: Shanghai closed DOWN 6.47 POINTS OR 0.23% /Hang Sang CLOSED UP 44.61 POINTS OR 0.16%/ / The Nikkei closed UP 409.39 POINTS OR 1.85% /Australia’s all ordinaires CLOSED UP 0.03% /Chinese yuan (ONSHORE) closed DOWN at 6.6982 AS POBC RESUMES ITS HUGE DEVALUATION /Oil DOWN to 70,25 dollars per barrel for WTI and 74.06 for Brent. Stocks in Europe OPENED GREEN EXCEP SPAIN //. ONSHORE YUAN CLOSED DOWN AT 6.6982 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.6761:HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES AT FULL BLAST: 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 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/Russia
The USA blasts China and Russia as they both provided sneaky oil sales to North Korea
(courtesy zerohedge)
3 b JAPAN AFFAIRS
c) REPORT ON CHINA/HONG KONG
Defaults across China rises which will force Chinese banks to raise tier one accounts. At 11 pm est
usa dollar vs on shore yuan: 6.6737 and off shore: 6.6911/ at 7 am 6.6984 for onshore/6.7170 offshore
(courtesy zerohedge)
Yuan ‘Death Crosses’ As Default Wave Forces Chinese Banks To Raise Capital
According to survey data by Bank of America Merrill Lynch, stretching back to 2009, investors have never been so bearish of Asian bonds in history.
Investors see China’s liquidity tightening…
As the PBOC cracks down on the leverage in the shadow banking system…
And domestic bond defaults surging, sparking major fund outflows that are weighing on the offshore yuan.
China corporate-bond defaults is about 22.2 billion yuan so far this year, data compiled by Bloomberg show. These includes five private and 15 public offerings.
And as ‘Investing In Chinese Stocks’ blog details, the China Banking Industry Association put out a report highlighting capital adequacy risk in urban commercial and listed banks. There is no problem at the moment, but the trends in regulations, NPLs, deposits, financial disintermediation and Internet competition are all moving in the wrong direction.
21st Century: “破净”、资产回表、股权管理压力齐下 银行业资本补充时间窗口不佳困境待解
Although the capital adequacy ratio of commercial banks reached a stage high of 13.65% at the end of 2017, the overall capital adequacy level of the industry was higher. However, since 2018, more and more new regulatory regulations have linked the upper limit of business scale to net capital/net assets, which actually increased the capital requirements of banking institutions at a certain scale. In addition, the new regulations for asset management have officially landed, with stocks. Non-standard entry will also bring additional capital consumption.
There are serious shortages of banks “other Tier 1 capital”
The “Report” pointed out that state-owned large banks are more advanced in capital adequacy. The capital adequacy level of rural commercial banks is middle, while the capital adequacy level of city commercial banks and listed banks is relatively low.
“The capital management of listed banks generally has problems such as the continuous decline of the core tier 1 capital adequacy ratio, the unreasonable capital structure, and the single capital replenishment model.” The “Report” pointed out that many banks issue or plan to issue exogenous capital replenishment tools. Preferred stocks and tier 2 capital bonds have the highest frequency, followed by convertible bonds, and are still dominated by traditional tools. In 2017, 41 listed banks of A-shares and H-shares issued a total of about 169.921 billion yuan of preferred stock, 232 billion yuan of secondary capital bonds, a total of 40 billion yuan of convertible bonds, and 18.1 billion yuan of non-public offerings.
As of the end of May 2018, eight A-share banks have announced the issuance of convertible bonds.
But who wants to buy a secondary offering when they can buy the bank assets at a 60 percent discount in the market?
Zeng Gang, deputy director of the National Finance and Development Laboratory, pointed out that banks are facing a capital supplement dilemma.
- First, due to the strengthening of supervision, the business returns to the table. It is a challenge to the bank’s capital to withstand the off-balance sheet business.
- Second, at the beginning of the year, we began to strengthen equity management. Some over-equity shares that do not meet regulatory requirements need to be phased out. It is also difficult to find suitable counterparty counterparties.
- Third, the valuation of the banking industry is basically at a historically low level, which is extremely unfavorable for bank capital replenishment. “The listed company’s P/B ratio has fallen to 0.6. If you do financial investment in the secondary market, it is cheaper to buy bank stocks than to increase.”
As of the end of 2017, the core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of China’s commercial banks were 10.75%, 11.35% and 13.65%, respectively, which was 2-3 percentage points higher than the regulatory standards. Although the overall capital adequacy level of commercial banks is higher than the regulatory indicators, there is a structural imbalance. The core tier 1 capital adequacy ratio and the tier 1 capital adequacy ratio of some small and medium-sized banks are consistent or almost identical, indicating that their “other tier 1 capital” is seriously insufficient. The Report also suggests that it is necessary for regulators to further introduce more innovative capital instruments that complement “other Tier 1 capital”. In addition, support banks to enter the broader domestic and foreign capital markets, such as supporting Chinese banks to explore international capitals such as London, Singapore, Dubai and other countries to issue RMB-denominated overseas preferred stocks, Islamic bonds and other capital replenishment tools. Commercial banks should also pay attention to capital management.
NPLs remain very low (officially).
As of the end of 2017, the balance of non-performing loans of commercial banks was 1.71 trillion yuan, and the non-performing ratio was 1.74%. It was stable at this level for five consecutive quarters, but it still needs to focus on the risk exposure of some regions and industries. The report believes that the banks in 2018 Industry credit risk management still faces many challenges, but the quality of commercial banks’ assets is expected to continue to maintain a stable and good trend.
In terms of its ability to withstand risks, the balance of loan losses for commercial banks at the end of 2017 was 3,094.4 billion yuan, and the provision coverage ratio was 181.42%, an increase of 5.02 percentage points from the end of 2016. The overall risk-rewarding capacity was enhanced.
“For some time to come, the risk challenge is still very serious for the banking industry. We estimate that the NPL ratio will continue to rise slightly in 2018.” Zeng Gang pointed out. The current supervision and intensified assessment, the tightening of the financing environment has led to an increase in liquidity risk, and this year’s physical financing difficulties are more severe. In addition, the promotion of structural reforms on the supply side, the rise in environmental protection costs, and even the current trade frictions will have a significant impact on the impact of the enterprise.
Deposits are growing, but remain a concern. Savers are shifting their money into demand deposits:
In 2017, the total debt growth rate of commercial banks was only 8.4%, which was nearly half of the growth rate of 16% in the same period of 2016.
Affected by the strengthening of supervision, the bank’s non-deposit liability business has adjusted significantly. At the end of 2017, 26 listed banks and other financial institutions deposited a total of 1,366.57 billion yuan, a year-on-year decrease of 11.68%, a sharp drop. The deposit business is under increasing pressure. As of the end of December 2017, the balance of RMB deposits of financial institutions was 167.1 trillion yuan, an increase of 8.65% over the beginning of the year. Among them, household deposits accounted for 39%, non-financial companies accounted for 34.2%, government deposits 18.3%, and non-bank financial institutions 8.5%.
The trend of “demand” deposits is also obvious.
Lian Ping, chief economist of Bank of Communications, pointed out in the report that the pressure on deposit business still exists in 2018. The active fiscal policy superimposed and regulated fiscal deposits. The residents added leverage for two consecutive years, which will give banks financial deposits, social deposits, and residents. Savings deposits put a lot of pressure on them. In addition, the slowdown in bank asset expansion will also constrain the ability to create deposit, deepening financial disintermediation, and permeating Internet finance are all increasing pressure. Commercial banks should actively increase the diversification of funding sources.
And nowhere is this crisis more evident than in Asia’s dollar bond market, which, as Bloomberg reports, has been in turmoil since the beginning of the year as oversupply caused indigestion amid rising yields, and Chinese deleveraging efforts curbed note investments. Dollar corporate bonds in the region lost 2.4 percent in the first half, the worst start to the year since 2013.Chinese junk bonds, the biggest component of Asian high yield, surpassed 10.5 percent on Friday for the first time since 2015.
Few expect a rebound anytime soon. With summer, Bloomberg notes that market moves are being amplified by lower liquidity. Bank traders are also less willing to bid for securities because of concerns that they will be left with losses shortly after buying the notes.
“In this kind of year where we have a credit bear market, it’s typical for investors to position defensively,” said Antonio Cailao, director of Asian credit trading at ING Bank NV.
That means investors will gravitate toward debt with low volatility and low duration, while avoiding and reducing exposure to high yield, he said.
And the bad news continues for China’s yuan as it tumbled the most since January 2016 and in the process triggering a bearish technical pattern known as a “death cross.”
The currency’s 50-day moving average has now broken through its 200-day counterpart for the first time since its shocking currency devaluation three years ago. (to clarify for those struggling with the two-sided nature of FX pairs – what is a golden cross for the USD relative to the Yuan is a death cross for the yuan relative to the USD)
China can allow the yuan to weaken a bit further, but at some point it will step in with support, as too much weakness would be counterproductive, according to David Lebovitz, global strategist at JPMorgan Asset Management in New York.
end
Trump will not be happy with this but it seems that China is slowly down immensely. Although its exports rose marginally it was its imports that declined hugely which may have been the tariffs implimented
(courtesy zero hedge)
China’s Trade Surplus With US Hits All Time High At Worst Possible Time
Overnight China reported its June trade data, which showed that export growth moderated modestly from 12.3% Y/Y in May to 11.3% in June, above the 9.5% consensus, however imports decelerated meaningfully, sliding from 26.0% Y/Y in May to just 14.1% in June, well below the 21.3% estimate, which may be related to the imports tariff cuts on automobiles and selected consumer goods effective on July 1.
In sequential terms, exports increased 0.4% M/M, at the same pace as in May, while imports declined -3.2% M/M slowing from +2.8% in April. As a result of the decline in imports, the trade surplus widened to US$41.6bn from US$24.2bn in May. Tariff changes from the US and China in July can potentially distort June trade data.
“Both imports and exports have seen robust growth in the first half as companies front-load orders ahead of the trade war, resulting in nice-looking year-to-date trade data, but the momentum is hardly sustainable in the future,” said Ding Shuang at Standard Chartered Bank. He said China still has solid domestic demand despite the decline in import growth.
Echoing the concern about the economy, Goldman said that “momentum of exports has slowed notably in recent months in 3m/3m terms. This has been against the backdrop of slowing global growth momentum so far this year, with the trend probably continuing in the near future, while appreciation of CNY over the past several months (at least before April) should have also contributed.”
Broken down by commodity type, imports declined notably across the board in volume terms, with iron ore imports declining 12.1% yoy, vs. +2.9% yoy in May; crude oil imports contracted 4.9% yoy, vs. +5.0% yoy in May; steel products imports decreased by 8.0% yoy, vs. +1.8% yoy in May. In value terms, iron ore imports continued to contract, at -5.1% yoy, vs. -6.8% yoy in May; crude oil imports grew by 42.2% yoy, vs. +41.3% yoy in May; steel products imports increased by 2.1% yoy, vs. +17.4% yoy in May.
In terms of exports to major destinations, the trade surplus with the European Union rose to the highest level since 2011, while the deficit with Japan shrank, as exports growth to Japan slowed while going up modestly to other major trade partners. Specifically, for major DMs, exports to US and EU inched up to +12.6% yoy and +10.4% yoy from 11.6% yoy and 8.5% yoy in May, while that to Japan slowed to 6.9% yoy from 10.2% yoy in May. For major EMs, exports to ASEAN grew by 19.3% yoy, up from +17.6% yoy in May.
* * *
But the most notable part of the trade report is that despite the modest slowdown in trade – and the latest development which may potentially add more fuel to the US-China trade war fire – China’s monthly trade surplus with the U.S. rose to a record in June at the worst possible time, as the number is sure to further infuriate Trump (and certainly Peter Navarro) and underlines the imbalance at the heart of an escalating trade war between the world’s two largest economies.
Specifically, China’s customs reported that the trade surplus with the U.S. stood at $28.97 billion, the highest on record going back to 1999. Curiously, imports from the US rose at the same time as exports also climbed to $42.62 billion, also a new high.
Commenting on the data, Wang Jian, economist at Shenwan Hongyuan Group, said that “the record bilateral surplus shows exactly that the U.S. economy is robust while that of China is weakening. China’s domestic investment is softening due to funding strains, while consumption is not particularly strong either.”
And as Bloomberg adds, while multiple factors will have influenced the data, including a rush by some manufacturers to sell goods before tariffs imposed this month hit, there’s little sign that the U.S. deficit with China will improve any time soon. As tax cuts fuel the U.S. expansion and a slowing Chinese economy may cool domestic demand, the almost-$340 billion annual gap will continue to provide the backdrop to the standoff.
The commentary from UBS’ chief economist Paul Donovan was also notable:
Data showed that China’s imports from the US rose. However, data also showed that China’s trade surplus with the US hit a record. A lot of what China exports, it first imports; so rising imports and exports are not unusual. There may also have been a desire to stockpile goods in the US and China before new taxes are imposed.
The burst in US exports may have also been prompted by the yuan, whose decline in June was the worst in any month since 1994, dropping more than 3% against the dollar. And while that ought to help exporters in the longer run, the yuan’s fall now is a sign of growing concern as the trade war arrives at a time when the economy is already slowing. In other words, President Xi Jinping may ultimately have to choose between softening his multi-year campaign to control debt levels, or letting growth dip below the target of 6.5 percent.
The trade data comes ahead of the gross domestic product report for the second quarter, which should give a more complete picture of how the world’s second biggest economy did in the first half of this year. That is scheduled for release on Monday, with economists forecasting a slight slowing of the quarterly growth pace to 6.7 percent from 6.8 percent.
In a separate report, China’s broadest measure of new credit expanded far below expectations in June, with further evidence of a contraction in shadow banking emerging. Aggregate financing stood at 1.18 trillion yuan in June, the PBOC reported, badly missing estimates of a 1.4 trillion increase, while China’s M2 growth slowed from 8.3% to 8.0%, missing estimates of 8.4%, and a new all time low.
The data confirms what we already know: China’s economy is rapidly slowing down and the trade war with the US comes at the worst possible time for Beijing. Investment, factory output and retail sales growth all slowed in May. The tighter credit tap will also subtract from infrastructure and property investment for the rest of the year, as local governments cut borrowing and property developers have less access to shadow financing channels, according to Bloomberg.
“Import growth declined due to fewer purchases of oil and iron ore last month, indicating industrial production is easing moderately, especially in upper-stream sectors such as smelting and chemicals,” said Gai Xinzhe, analyst at Bank of China Institute of International Finance in Beijing. That’s a “worrisome sign” for the second half of this year as domestic demand was already showing signs of a slowdown in previous months.”
Said otherwise, those looking for the catalyst of what happens next to the global economy and world markets, it will be all up to China – if it is unsuccessful in dragging itself out of its current economic slump, the next global recession may come much faster than most expect. Which is also why Goldman concludes that “with less strong support from external demand clouded by the trade tension, and still ongoing financial regulations which could continue to weigh on credit supply, we expect the government to ease policy to avoid a meaningful slowdown, through both further RRR cuts and lower interbank rates as we have forecasted, and more direct measures such as support from policy banks.”
In other words, the fate of the global economy is once again in China’s hands.
end
China’s trillion dollar sovereign Wealth Fund wants permission to do a Japan: purchase domestic stocks and corporate bonds. This will not end well.
(courtesy zerohedge)
China’s Trillion-Dollar Sovereign Wealth Fund Wants Permission To BTFD In Chinese Stocks, Bonds
One glance at Chinese bond and stock markets makes it clear that ‘The National Team’ needs help…
As China cracks down on the leverage in the shadow banking system (last night’s data shows a massive ongoing collapse in that credit source)…
And faces trade wars with US (occurring as China’s trade surplus hits a record high with US),
Chinese stock markets have tumbled…
And bond markets have collapsed as defaults surge…
And Yuan has plunged…
So what is to be done to rescue the perception that all is well in the land of Xi?
Simple – follow the same path as Japan and unleash the nation’s trillion-dollar sovereign wealth fund to buy domestic assets and save the world.
As Bloomberg reports, China’s $941 billion sovereign wealth fund (China Investment Corp – CIC) wants permission to invest in domestic stocks and bonds for the first time, people with knowledge of the matter said, as it tries to end restrictions on its mandate following government moves to open up financial markets.
Letting CIC invest at home would add a deep-pocketed buyer at a time when China’s equity and bond markets are under pressure from a trade war, a slowing economy and rising defaults.
At a public forum last month, CIC’s head of asset allocation Fan Hua said she saw “very good opportunities” in A shares and yuan-denominated bonds should the fund be allowed to invest.
The valuations of domestic shares are “very attractive” after recent declines as compared to other markets globally, Fan told a forum in Beijing on June 29.
CIC has been primarily restricted to investing overseas since it was set up in 2007 with money from China’s swelling foreign-exchange reserves. The fund is turning its eye on domestic securities as Chinese stocks have gained inclusion in MSCI Inc.’s indexes for the first time, widening their appeal to overseas investors.
How does this all end? Simple – not well.
Just this week, Japan’s giant GPIF reached its limit on how much domestic equity exposure it can take (so will need an allocation mandate change to keep the dream alive for Abe).
Japan’s Government Pension Investment Fund’s portfolio has exceeded its 25% allocation target for domestic stocks for the first time, a milestone that will force the world’s largest pension fund to retool its strategy for stable returns.
The fund that manages 156 trillion yen ($1.41 trillion) in assets typically balances its holdings among Japanese bonds, Japanese stocks, overseas bonds and overseas stocks.
According to a filing on Friday, Japanese equities accounted for 25.14% of the GPIF’s portfolio at the end of March. That equates to over 40 trillion yen worth of shares covering roughly 2,300 issues. The fund is believed to be a major shareholder in many companies listed in the Tokyo Stock Exchange’s first section.
The GPIF has earned the moniker as a “whale” in the equity market due to its outsize holdings of domestic stocks. Previously, a greater weight was given to less risky domestic bonds, which commanded a 62% share at the end of fiscal 2012.
And at the same time, The Bank of Japan now owns 80% of its ETF-purchase scheme’s eligible securities…
jeroen blokland
✔@jsblokland
Monetary Madness! This charts shows the Bank of Japan now owns 80% of the eligible index ETFs! #BoJ #QE via @GoldTelegraph_
“Free market” reform anyone?
end
First it was Jim Rickards and now Brandon Smith is pounding the table that China is accumulating not only gold but SDR’s. Obviously China is preparing for a global reset
(courtesy Brandon Smith/Alt Market.com)
China Has Been Preparing For A Trade War For Over A Decade
Authored by Brandon Smith via Alt-Market.com,
The crash of 2008 brought with it a host of strange economic paradigms rarely if ever seen in history; paradigms which have turned normal fiscal analysis on its head. While some core fundamentals remain the same no matter what occurs, the reporting of this data has been deliberately skewed to hide the truth.
But what is the truth? Well, at bottom, the truth is that most economies around the world are far weaker than the picture governments and central banks have painted. This is especially true for the United States.
That said, one country has been pursuing an opposite strategy for many years now — meaning, it has been hiding its economic preparedness more than its weaknesses. I am of course speaking of China.
When we mention China in the world of alternative analysis, several issues always arise: China’s expanding debt burden, government spending on seemingly useless infrastructure programs like “ghost cities,” China’s central bank and its corporate subset misreporting financial figures regularly, etc. All of these things fuel the notion that when a global fiscal disaster inevitably takes place, it will emanate first from China. They also give the American public the false impression that a trade war against China will be easily won and that China will immediately falter under the weight of its own veiled instabilities.
However, if one actually studies China’s behavior and activities the past decade, they would see a method to the apparent madness.
In fact, some of China’s actions seem to suggest that the nation has been preparing for years for the exact geopolitical conditions we see today. It’s as if someone warned them ahead of time…
In terms of prepping for a trade war with the U.S., China has implemented several important steps. For example, for at least the past 10 years the country has been shifting away from a pure export economy and reducing its reliance on sales of goods to the U.S. In 2018, Chinese consumer purchases of goods are expected to surpass that of American consumers. For the past five years, domestic consumption in China accounted for between 55% to 65% of economic growth, and private consumption was the primary driver of the Chinese economy — NOT exports.
The argument that China is somehow dependent on U.S. markets and consumers in order to keep its economy alive is simply a lie. China is now just as enticing a retail market as the U.S., and its domestic market can pick up some of the slack in the event that U.S. markets are suddenly closed to Chinese exports.
The problem of swiftly growing Chinese debt is presented often as the key argument against the nation surviving a global economic reset or trade war, with its “shadow banking” system threatening to unleash a long hidden credit crisis and stock market plunge. But this is not the complete story.
The exact amount of fiat printing that China’s central bank undertook after the 2008 crash is not known.Some estimates calculate China’s debt to now sit at around 250% of its gross domestic product. By normal standards this would suggest a credit crisis is imminent. But was China’s sudden interest in debt expansion a reactionary matter, or was it part of a bigger plan?
Just after 2008, a common argument against China’s resilience was the notion that China was dependent on holding U.S. dollar reserves in order to keep its own currency weak. Meaning, Chinese companies had to sell goods to the U.S. in exchange for dollars, which they then exchanged to the central bank for Yuan. China’s central bank then held those trillions of dollars in reserve as a means to keep the dollar artificially stronger on the global market, and the Yuan weaker, thus supporting and perpetuating the old export model.
Obviously this argument is no longer applicable, or outright absurd.
China’s own debt expansion and Treasury bond issuance actually started way back in 2005 under the “Panda Bond” program. At the time it was treated like a novelty or a joke by the mainstream economic community. Today, it is a powerhouse as Yuan denominated assets are spreading around the world.
China no longer needs to hold dollars or dollar denominated assets in order to keep its currency weaker for export markets. It can simply inflate and monetize its own debt, just like the U.S. does. But why would China bother to do this at all? Why jump into the same debt game that has caused so much trouble for western nations?
Perhaps because they know something we don’t. During the initial phase of the derivatives crisis, the possibility of China joining the International Monetary Fund’s Special Drawing Rights basket leaped to the forefront. With the Yuan as an SDR basket member, its potential to become a financial center for global trade rather than just an export and import hub would be assured. But the IMF set certain requirements before China could join. One of these requirements was far greater currency liquidity and a more “freely usable” Yuan market. In other words, for China to join the SDR basket they would first need to go into considerable debt.
This is exactly what they did; not to prop up their banking system (though this made for a valid excuse) or to necessarily prop up their stock markets. Rather, China wanted a seat at the table of the “new world order,” and they bought that seat through massive debt expansion. China was officially included in the SDR basket in 2016.
China has been a very vocal proponent of the SDR basket system, and it becomes clear why if you understand what the globalists intend for the future of the world’s monetary framework. This plan was first outlined in the globalist controlled Economist magazine in 1988 in an article calling for the beginnings of a global currency in 2018. The article states that the U.S. economy and the role of the dollar as world reserve would have to be diminished, and that the IMF’s Special Drawing Rights basket could be used as a bridge to set up a single currency for all the world’s economies.
This currency would of course be administered and controlled by the banking elites at the IMF.
Since 2009, China’s central bank has called for the SDR to become a “super-sovereign reserve currency,” in other words, a global currency system. In 2017, the vice governor of China’s central bank stated that central banks should increase their use of the SDR as a unit of account and that greater SDR liquidity should be encouraged. In 2015, China’s central bank suggested that the SDR system should “go digital,” creating a digital version of the reserve so that it could spread quickly.
It should come as no surprise that the IMF is in full agreement with this plan and has even suggested in recent articles on its website that cryptocurrencies and blockchain technology are the future evolution of the monetary system.
Notorious globalist George Soros revealed a few darker details of what the IMF calls the “global economic reset” in an interview in 2009; these details included a diminished American economy, a diminished dollar and for China to become a new economic engine for the world.
Finally, China has clearly been prepping for a considerable crisis in the dollar or in the world’s economic stability as shown in its sudden and aggressive stockpiling of gold reserves the past decade. Only recently surpassed by Russia in purchases, China is one of the most aggressive national buyers of gold. An expanding gold stockpile would be an effective hedge against a collapsing dollar market. If the dollar loses its world reserve status, nations like China and Russia are placed well to mitigate the damages. Considering the fact that the IMF officially holds around 3,000 tons of gold, the globalists are also well placed for a dollar crash.
It would appear that China has been included at many levels in the plan for the global reset. All of the previously mentioned actions suggest foreknowledge of a dramatic shift in the dollar model. The trade war itself provides perfect cover for the economic reset, as I have been warning in my latest articles. China would play an important role in the reset, as they have the ability to dump U.S. Treasuries and the dollar as world reserve, causing a chain reaction through global markets as their trading partners follow along in a domino chain.
They will likely do this quietly (as Russia recently did), in order to pawn off their T-bond holdings before news of a Treasury dump hits the mainstream. The primary beneficiaries of this act will be the globalists, while China has placed itself to survive (not necessarily to thrive) during the chaos. The same cannot necessarily be said for the U.S., which suffers from the Achilles Heel of total dependency on the dollar’s primacy.
end
4. EUROPEAN AFFAIRS
UK
In a bombshell interview, Trump slams Theresa May and her soft Brexit claiming the uSA would still have to negotiate trade with the EU at a time that the uSA wants the EU to lower its tariffs which it refuses to do. This would force the USA not to trade with the UK and that would kill the pound. Also Trump states that BoJo (Boris Johnson) would make a great Prime Minister
(courtesy zerohedge)
6 .GLOBAL ISSUES
The large Permian basin is increasing in production but these guys need key pipelines to carry the oil.
This is causing huge discounts and are hurting the owners of the basin.
(courtesy Paraskova/OilPrice.com_)
The Permian Is Banking On These Key Pipelines
Authored by Tsvetana Paraskova via OilPrice.com,
Booming crude oil and natural gas production in the Permian Basin and not enough pipeline takeaway capacity have widened the discounts at which oil and natural gas pumped in the most prolific U.S. shale basin are trading relative to the U.S. benchmarks.
Midstream operators have planned and continue to announce plans for more oil and natural gas pipeline projects in the area to ship oil and gas from the Permian to the Gulf Coast. But many of those pipelines will not come on stream before late in 2019 and 2020.
Analysts believe that the WTI Midland discount and the Waha natural gas discount to Henry Hub prices will become worse before they become better, at some point in 2020. The Midland discount has been above $10 a barrel to Houston WTI and Cushing WTI for a couple of months and is expected to further widen in the coming months, at least until some of the planned new oil pipelines out of the Permian become operational.
According to Value Digger, the Midland WTI discount to Houston WTI will stay at or above $10 a barrel through the end of 2019.
Oil production in the Permian stood at 3.277 million bpd in June and is expected to rise by 73,000 bpd in July to reach 3.350 million bpd, the EIA estimates.
On the other side of the equation—takeaway capacity—as of Q1 2018, pipeline capacity available for Permian producers to transport oil out of the basin stood at 2.8 million bpd, according to Drillinginfo. The data provider sees the discount of Permian oil to oil at the Gulf Coast “possibly soon headed” for $20 a barrel.
There are a few major projects planned, and if all of those are successfully funded and accomplished, total transportation capacity is expected to jump to 5.8 million bpd by the end of 2020, balancing the supply/takeaway equation, Drillinginfo reckons.
Major projects include the EPIC Crude Oil Pipeline from Orla, Texas, to the Port of Corpus Christi, which is expected to be in service in the second half of 2019 and to have a capacity up to 590,000 bpd.
TheGray Oak Pipeline by Phillips 66 Partners will provide crude oil transportation from West Texas to destinations in the Corpus Christi and Sweeny/Freeport markets. It is planned to transport up to 700,000 bpd of crude oil, but capacity could be extended to 1 million bpd, depending on interest and commitments. The pipeline is expected to be placed in service by the end of 2019.
Plains All American’s (PAA) Cactus II Pipeline, with an initial capacity of 585,000 bpd extending from the Permian to the Corpus Christi/Ingleside area, is supposed to be operational in the third quarter of 2019. The system is expandable to around 670,000 bpd through the addition of incremental pumping capacity.
PAA and Magellan Midstream Partners’ BridgeTex pipeline expansion of 40,000 bpd is expected to be operational in early 2019. The pipeline was recently expanded from 300,000 bpd to 400,000 bpd capacity to deliver Permian crude oil from Midland and Colorado City, Texas, to the Houston Gulf Coast area.
PAA and ExxonMobil signed last month a letter of intent to pursue the creation of a joint venture for building a pipeline to transport crude oil and condensate from multiple locations in the Permian to the Gulf Coast.
Then there isPermian Express 3 of Energy Transfer Partners, for up to 50,000 bpd. The volume is smaller for this pipeline expansion than the other major projects, but this one is planned to come online as early as this year—in Q4.
Natural gas production in the Permian is also growing, and new pipelines are also planned. But like with the oil pipelines, capacity is not expected to expand significantly before the end of 2019, when most of the projects under consideration and construction will enter into service.
Prices for gas for delivery at the Waha hub in West Texas plunged in April 2018 to $1.40/MMBtu below the Henry Hub benchmark, while the average discount this year has been $0.90/MMbtu, according to Value Digger, who expects the discount to stay at or above $0.90/MMbtu for the rest of this year, and possibly above $1/MMbtu for an extended period of time in 2019.
According to analysts, the expected wide discounts of Permian crude oil and natural gas prices to the U.S. benchmarks will likely continue to weigh on the stocks of Permian-focused producers, especially on those without firm takeaway capacity commitments.
END
Trump may tap up to 30 million barrels of oil from SPR to halt the rising gas price
(courtesy zerohedge)
Trump May Tap Up To 30MM Barrels From Oil Reserve To Halt Rising Gas Price
Having already yelled at OPEC on several prior occasions on Twitter with demands for Saudi Arabia and the rest of the OPEC cartel to boost production in order to push oil – and gasoline – prices lower…
… only to realize that the amount of needed incremental output is next to impossible to achieve when considering the amount of Iran exports that will be curbed on November 4 when the Iran sanctions kick in officially, Trump has been left with two choice: ease off the Iran sanctions and implement them more gradually, or release oil from the US Strategic Petroleum Reserve.
And now, with oil prices continuing to rise and pushing the price of gasoline to levels not seen in 4 years, at a critical time with November mid-term elections fast approaching, Trump appears to have decided on the latter, and is actively considering tapping into the nation’s emergency crude oil reserve, Bloomberg reported citing two people “familiar with the situation.”
While no decision has been made yet to release crude from the 660-million-barrel SPR stockade, options under review range from a 5-million-barrel test sale to a larger release of 30 million barrels. An even larger release could be possible it it were to be coordinated with other nations.
For Trump, the magic number appears to be $3 per gallon on the national level; every time regular gasoline nears that round number, Trump has been quick to voice his displeasure.
“Oil prices are too high, OPEC is at it again. Not good!” he said on Twitter last month. On the Fourth of July, Trump tweeted: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”
The average national price of unleaded gasoline rose to $2.89 Friday, an increase of 63 cents from where it was a year ago, per AAA data. The U.S. gasoline price average is expected to range between $2.85 per gallon and $3.05 per gallon through Labor Day, according to the group.
Even an SPR release may not be sufficient to push prices lower, and analysts remain split on the effect such a release would have and how long it it last. Depending on its size and timing, an oil sale might leave the market unmoved, or have a real, if fleeting, impact on prices.
“I think a SPR release would have a psychological impact on the market, it may not translate into lower gasoline prices, but it would immediately bring down crude prices at least temporarily until the market adjusts,” said Joe McMonigle, senior energy analyst at Hedgeye Risk Management LLC.
A release of crude oil in September or October could cut gasoline prices for consumers ahead of November mid-term elections. Trump could also use it as a tool to persuade buyers of Iranian oil to halt their purchases in the run-up to Nov. 4, when U.S. sanctions against the Islamic Republic are due to snap back.
Having tapped the SPR on several occasions in the past two years, another draw down is looming: Congress has already mandated the sale of 11 million barrels starting as soon as Oct. 1. That would bring the total oil in inventory to just under 650mm barrels.
Others said that an SPR tap would be a logical move, if one that would have limited impact:
“I would be very surprised if they were not thinking about it,” said Kevin Book, managing director of Washington-based consultancy ClearView Energy Partners.
“The DOE must begin planning its scheduled sales months in advance, so I suspect the timing of a scheduled sale as a market-management tool probably has been on their radar screens for weeks,” Book said.
Previously, the SPR oil stockpile which was created in the aftermath of the 1973 Saudi oil embargo, was tapped by President Bill Clinton in the 1990s, as well as to fund unrelated domestic legislation. And while Energy Secretary Rick Perry has said before that he has no interest in utilizing the reserve, telling reporters last month it is “there for emergencies,” ultimately the decision is up to Trump.
Unfortunately for Trump, the impact of such a move would be modest at best, as the kneejerk reaction in the oil price showed: following the news, WTI dipped modestly but has already found a floor.
8. EMERGING MARKET
Pakistan
When will this world learn? Massive blast in Pakistan kills 128 ahead of elections.
(courtesy zerohedge)
Massive Blasts Kill 128 Ahead Of Pakistan Elections; Ousted PM Arrested At Airport
The deadliest terror attack in over a year has rocked Pakistan as bombs went off at two campaign rallies in different cities. The massive death toll climbed by the hour throughout Friday after a suicide bomber struck a convoy headed to an election-related event in Mastung near the southwestern city of Quetta, the capital of Balochistan Province.
Pakistani authorities said 128 were killed and over 150 wounded in a suicide attack reportedly claimed by the Islamic State (ISIS).
Image: China Daily
Some observers have noted that the spot is close to where Pakistani forces had previously claimed to have eliminated an ISIS base in the province.
The attack targeted Siraj Raisani, a Balochistan Awami Party candidate for parliament running in the July 25 general elections, and his supporters. Raisani died as a result of the blast, which came after a motorcycle bomb attack earlier in the day in the northwestern town of Bannu targeted a convoy transporting former Housing and Works Minister Akram Khan Durrani, who escaped unharmed. At least four people died in the Bannu attack with at least 32 wounded.
A local hospital official in Mastung said, “we’ve run out of space in the mortuary” and security officials cited over 271 injured based on incoming casualties. Video footage and photographs showed a grizzly scene with dead and wounded lying nearly on top of each other under a cramped outdoor tent.
Naila Inayat
✔@nailainayat
120 dead, 200+ injured as #Mastung bleeds. Daesh claims responsibility for this attack on election rally in Balochistan. By next election the Pakistani State will be busy mainstreaming Daesh.
Thought the region experienced similar attacks in prior years, Friday’s attack on a campaign rally was unexpected. Al Jazeera reports:
The BAP’s candidate Siraj Raisani was running for election to the provincial assembly in his home district of Mastung, where the attack took place. The area has been the site of several attacks by the Lashkar-e-Jhangvi (LeJ) armed group, although those have mostly targeted Shia Muslim pilgrims bound for Iran.
Ethnic Baloch nationalists, who are fighting for independence from Pakistan, have also claimed several attacks on election candidates in the region in recent days.
One local government official condemned the attack as “a conspiracy to sabotage the electoral process in the province,” according to a statement.
The Express Tribune
✔@etribune
BAP’s #SirajRaisani martyred in #Mastung suicide blast; death toll rises to 111 https://tribune.com.pk/story/1757135/1
Pakistan is currently on edge ahead of July 25th elections, and after a recent spate of election-related bombings and assassinations.
Also significant is that former Prime Minister Nawaz Sharif was arrested Friday as he arrived at Lahore airport from London. Security forces had put the city on lockdown to prevent planned huge demonstrations by his supporters.
Dawn.com
✔@dawn_com
#NawazSharif, #MaryamNawaz taken into custody at #Lahore airport; passports confiscatedhttps://www.dawn.com/news/1419756
Nawaz Sharif, Maryam leave London for Pakistan
The former PM and his daughter are expected to land in Lahore on Friday evening at 6.15pm.
dawn.com
Sharif been given a 10-year prison sentence in absentia last week by a Pakistani court on corruption charges related to several previously undisclosed luxury properties in London, which were funded through offshore companies and holdings in a scandal revealed through the 2016 Panama Papers leak.
Sharif and his daughter Maryam were taken into custody by officials from the National Accountability Bureau (NAB) without incident as they re-entered the country.
His party, the Pakistan Muslim League, has dismissed the proceedings which initially stemmed from Panama Papers revelations as a political witch hunt orchestrated by Pakistan’s army to discredit the former PM and his family. Sharif’s first two terms ended abruptly under intense military pressure and the second by actual coup.
Pakistan is bracing for more potential violence to come as a result of both Sharif’s return and a string of attempted assassinations on political candidates ahead of the late July elections.
* * *
Pakistan’s general election summary, according to the BBC:
- Voters will elect candidates for the 342-seat Pakistan National Assembly
- The main parties are Nawaz Sharif’s PML-N, former cricketer Imran Khan’s PTI and Bilawal Bhutto Zardari’s PPP
- It will mark the second time that one civilian government has handed power to another after serving a full term
- The run-up to the vote has been marred by what observers say is a crackdown on political activists, journalists and critics of the powerful military
- More than 371,000 troops will be deployed to protect the election and ensure it is “free and fair”, the army says
end
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am
Euro/USA 1.1627 DOWN .0037/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES ALL GREEN EXCEPT SPAIN /
USA/JAPAN YEN 112.58 DOWN 0.093 (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 1.3124 DOWN 0.0023 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED
USA/CAN 1.3201 UP .0037 (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 FRIDAY morning in Europe, the Euro FELL by 37 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1670; / Last night Shanghai composite CLOSED DOWN 6.47 POINTS OR 0.23% /Hang Sang CLOSED UP 44,61 POINTS OR 0.16% /AUSTRALIA CLOSED UP 0.03% / EUROPEAN BOURSES ALL GREEN EXCEPT SPAIN /
The NIKKEI: this FRIDAY morning CLOSED UP 409.39 POINTS OR 1.85%
Trading from Europe and Asia
1/EUROPE OPENED ALL IN THE GREEN EXCEPT SPAIN
2/ CHINESE BOURSES / :Hang Sang UP 44,61 POINTS OR 0.16% / SHANGHAI CLOSED DOWN 6,47POINTS OR 0.23%
Australia BOURSE CLOSED UP 0.03%
Nikkei (Japan) CLOSED UP 409.39 POINTS OR 1.85%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1240.80
silver:$15.80
Early FRIDAY morning USA 10 year bond yield: 2.84% !!! UP 0 IN POINTS from THURSDAY 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 UP 0 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/
USA dollar index early FRIDAY morning: 95.13 UP 30 CENT(S) from THURSDAY’s close.
This ends early morning numbers FRIDAY MORNING
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And now your closing FRIDAY NUMBERS \1: 00 PM
Portuguese 10 year bond yield: 1.734% DOWN 1 in basis point(s) yield from THURSDAY/
JAPANESE BOND YIELD: +.04% DOWN 0/10 in basis points yield from THURSDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.263% DOWN 2 IN basis point yield from THURSDAY/
ITALIAN 10 YR BOND YIELD: 2.55 DOWN 9 POINTS in basis point yield from THURSDAY/
the Italian 10 yr bond yield is trading 129 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: FALLS TO +.340% IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR FRIDAY
Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1668 UP .0004(Euro UP 4 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 112.44 DOWN 0.231 Yen UP 23 basis points/
Great Britain/USA 1.3214 UP .0036( POUND UP 36 BASIS POINTS)
USA/Canada 1.3166 DOWN .00401 Canadian dollar UP 1 Basis points AS OIL ROSE TO $70.72
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This afternoon, the Euro was UP 4 to trade at 1.1668
The Yen FELL to 112.44 for a GAIN of 23 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND GAINED 36 basis points, trading at 1.3214/
The Canadian dollar GAINED 1 basis points to 1.3166/ WITH WTI OIL FALLING TO : $70,72
The USA/Yuan closed AT 6.6916
the 10 yr Japanese bond yield closed at +.040% DOWN 0/10 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 2 IN basis points from THURSDAY at 2.834 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.936 DOWN 2 in basis points on the day /
THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS
Your closing USA dollar index, 94.82 DOWN 1 CENT(S) ON THE DAY/1.00 PM/
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM
London: CLOSED UP 10.54 POINTS OR 0.14%
German Dax :CLOSED UP 47.76 OR 0.38%
Paris Cac CLOSED UP 23.30 POINTS OR 0.43%
Spain IBEX CLOSED DOWN 32.60 POINTS OR 0.35%
Italian MIB: CLOSED UP 102.23 POINTS OR 0.47%
The Dow closed UP 224.44 POINTS OR 0.91%
NASDAQ closed UP 107.31 points or 1.39% 4.00 PM EST
WTI Oil price; 70,72 1:00 pm;
Brent Oil: 75.31 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 62.27 UP 3/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 3 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.340% 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:$70.66
BRENT: $74.83
USA 10 YR BOND YIELD: 2.83% the dropping yields signify markets are in turmoil
USA 30 YR BOND YIELD: 2.93%/
EURO/USA DOLLAR CROSS: 1.1683 UP .0020 ( UP 20 BASIS POINTS)
USA/JAPANESE YEN:112.33 DOWN 0.341 (YEN down 117 BASIS POINTS/ .
USA DOLLAR INDEX: 94.71 DOWN 12 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3234 UP 56 (FROM LAST NIGHT UP 56 POINTS)
Canadian dollar: 1.3197 UP 7 BASIS pts
USA/CHINESE YUAN (CNY) : 6.6916 (ONSHORE)
USA/CHINESE YUAN(CNH): 6.7135 (OFFSHORE)
German 10 yr bond yield at 5 pm: ,.340%
VOLATILITY INDEX: 12.22 CLOSED DOWN 0.36
LIBOR 3 MONTH DURATION: 2.339% .
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
“Everyone Wins In A Trade War”? Stocks, Bonds,
Dollar All Soar After Tariff Tantrum
“No one wins a trade war” they said… Well for now, everyone is winning – US, Chinese, and European stocks are up; the dollar is stronger; and the long-bond is up…
Bonds and Stocks are bid post-Trade-War-Tantrum…
For now Russia is winning the trade war (if stock markets matter)
Chinese Stocks love Trade Wars…
European Stocks love Trade Wars (apart from Spain and Italy)…
US Stocks love Trade Wars…
Bloomberg offers a few explanations as to why the market seems unfazed by the trade war:
1. Investors are betting that cooler heads will prevail
2. The direct impact of tariffs is not enough to have drastic economic consequences. We are talking about 10% taxes on $200 billion imports in a $19 trillion economy. There will be winners and losers, but the aggregate impact is small
3. Political uncertainty matters less than you think.
And while uncertainty soars, VIX tumbled…
And then there’s this – ignorance is bliss…
US equities had their best week in over a month as algos BTFTWD!! Small Caps ended the week red though…
S&P managed to get above 2,800…
5 opening short squeezes in a row…
Wells Fargo ended the week lower and Citi unchanged but the “blockbuster” earnings this morning left bank stocks red on the day…
Yet again bank stocks have collapsed relative to the market and reverted back to the slumping yield curve…
An odd week for FANG stocks – lurch open on Monday morning and push to new record high – but Friday 13th spoiled the party…
Despite soaring stocks, the long-end of the bond curve ended unchanged…
And the yield curve collapsed to a new cycle low…
The yield curve collapse is accelerating…
30Y Treasury yield ended with the lowest weekly close since January…
The Dollar Index rallied solidly on the week…
The Yuan slid lower on the week once again (5th week in a row) finding resistance on a rebound twice at the CNY Fix…
Cryptos had another ugly week after a good start last weekend…
Commodities were all lower on the week…
The worst week since February for Bloomberg’s Commodity Index but global stock markets don’t care…
And finally, there’s this…
Market trading (early morning)
S and p rises despite the drop in 10 and 30 yr bonds which makes no sense. Somebody is right and somebody is wrong and I would guess that it is the bond players that are right
(courtesy zerohedge)
S&P Tops 2,800 For First Time Since March As Yield Curve Collapse Continues
BTFTWD!!!
Mission Accomplished…
But while the S&P tops its pre-tariffs levels, it’s the Nasdaq that is soaring…
So what happens next?
end
Market DATA
This is interesting!! Import prices slide considerably in June while export prices surged!! Is Europe sending deflation to the USA??
(courtesy zerohedge)
Import Prices Slide In June As Export Prices Surge Most Since 2011
Don’t blame China…
US Import prices tumbled 0.4% MoM (against expectations of a 0.1% rise) – the biggest drop since Feb 2016’s global growth scare – thanks to a plunge in EU (-0.3%), Mexico (-0.5%), and Canada (-0.3%), but export prices rose 0.3% MoM (more than the expected 0.2%).
Non-manufactured import prices were the biggest drag, dropping 2.1% MoM.
Foods and Beverages import prices fell 2.6% MoM. Capital goods prices fell 0.1% after falling 0.1% in May. Auto prices fell 0.1% after falling 0.1% in May
And on a YoY basis, while import price gains slowed to 4.3% (Import prices ex-food and fuel rose 1.8% YoY in June), export prices surge by 5.3% – the most since Oct 2011…
And it wasn’t China, whose import price index was flat (0.0% MoM)…
end
Seems that the trade war is effecting sentiment; U. of Michigan Sentiment slumps to a 6 month low
(courtesy zerohedge)
UMich Sentiment Slumps To 6-Month Lows As Tariff Fears Soar
After hope fell in June, preliminary University of Michigan sentiment data for July showed a drop in ‘current expectations’which sent the headline lower, from 98.2 to 97.1, well below expectations – its lowest since Jan 2018.
Inflation expectations (short- and medium-term) fell in July.
Annual increases of 3.0% in home prices over the next five years were anticipated in early July, the highest figure recorded since 2007.
As UMich notes, so far, the strength in jobs and incomes has overcome higher inflation and interest rates, but the darkening cloud on the horizon is due to rising concerns about the potential negative impact of tariffs on the domestic economy.
More importantly, these concerns have greatly accelerated in early July.
Negative concerns about the impact of tariffs have recently accelerated, rising from 15% in May, to 21% in June, and 38% in July. Among those in the top third of the income distribution (who account for half of consumer spending), 52% negatively mentioned the impact of tariffs on the economy in early July. The primary concerns expressed by consumers were a decline in the future pace of economic growth and an uptick in inflation. Among those who expressed negative views of the tariffs, the Expectations Index was 30.5 points below those who made no mention of tariffs, and in addition, the expected inflation rate was six-tenths of a percentage point higher. While consumers may not understand the intricacies of trade theory, they have substantial experience making decisions about the timing of discretionary purchases based on prospective trends in prices.
As a reminder, while soft survey data has been rebounding, hard real data continues to stagnate…
USA ECONOMIC /GENERAL STORIES
If this is not a perfect Bellwether, nothing is!! Wilbur Ross the permabull and USA commerce secretary not only sells everything but he goes massively short.
(courtesy zerohedge)
SWAMP STORIES
Have fun with these 5 video clips of Strzok being lambasted
(courtesy Michael Snyder)
5 Of The Most Controversial Moments From Peter Strzok’s Chaotic Testimony To Congress
Authored by Michael Snyder via The American Dream blog,
On Thursday, Peter Strzok finally received his well-deserved congressional grilling, and it was quite a chaotic affair. Over nearly ten hours, there were shouting matches between Strzok and congressional Republicans, there were shouting matches between Republicans and Democrats, and there were quite a few moments that none of us will ever forget. It was a joint hearing of the House Judiciary and Oversight Committees, and the meeting room was absolutely packed. More than 70 members of the House were in attendance, and many came ready with some very pointed questions.
The following are five of the most controversial moments from Peter Strzok’s ten hour testimony to Congress…
#5 Bob Goodlatte asks Strzok how he can “smell” Trump supporters at a Wal-Mart in southern Virginia…
#4 John Ratcliffe confronts Strzok about using “official FBI phones” on “official FBI time” to talk to Lisa Page about “stopping Trump” and “impeaching Trump”. The following comes from CNN…
“When you said you never crossed that bright, inviolable line, what you meant to say was except for 50,000 times, except for hundreds of times a day where I went back and forth, expressing my personal opinions about ‘f’ing’ Trump and stopping Trump and impeaching Trump on official FBI phones, on official FBI time,” said Rep. John Ratcliffe of Texas.
“Agent Strzok, are you starting to understand why some folks out there don’t believe a word you say?” he added.
#3 Darrell Issa forces Strzok to read back some of the anti-Trump text messages that he sent to Lisa Page…
#2 Trey Gowdy uses his extensive legal skills to absolutely grill Strzok about his contradictory statements…
#1 Congressman Gohmert went where nobody else was willing to go when he asked Strzok “how many times did you look so innocent into your wife’s eye and lie to her about Lisa Page?” The following comes from CNN…
“I’ve talked to FBI agents around the country. You’ve embarrassed them; you’ve embarrassed yourself,” Gohmert said. “And I can’t help but wonder, when I see you looking there with a little smirk, how many times did you look so innocent into your wife’s eye and lie to her about Lisa Page?”
You can see video of this exchange between Strzok and Congressman Gohmert right here…
Scott Whitlock
✔@ScottJW
Wow. Congressman Gohmert went there.
If it was virtually anyone else, I would feel very badly for them.
But if this is the worst that Strzok gets, then he will be getting off very easy.
Strzok definitely qualifies as a member of “the deep state”, and it is very rare for anyone in “the deep state” to be held accountable on this level.
Andrew Surabian@SurabeesPeter Strzok really missed his true calling in life as a bad guy manager for @WWE.
We are in a struggle for the soul of our government, and if we ever hope to turn things around we have got to clean out swamp creatures such as Peter Strzok. I believe that Thursday’s hearing was certainly a step in the right direction, and hopefully Congress will do much more to restore our faith in the integrity of our law enforcement agencies.
END
What an absolute joke: Mueller indicts 12 Russian intelligence officials for hacking into the DNC and Hillary’s campaign. Mueller’s only wish is that none of these Russian officials will come onto USA soil to defend themselves
(courtesy zerohedge)
Mueller Indicts 12 Russian Intel Officials For Hacking DNC, Hillary Campaign
Update II: The Russian ruble reversed its earlier gains following the announcement.
Rosenstein has finally stepped to the podium and is rapidly reading off details about the indictments. Notably, one of the officials named in the indictments is charged not only with hacking of the DNC and the Democratic Congressional Campaign Committee but also with infiltrating state election boards and companies that supply software used to verify voter registration. They targeted officials involved with administering elections and sent “spear-fishing” emails to these officials.
The Russian intelligence officials are also charged with using a third-party (which is not named in the indictment but sounds a lot like Wikileaks) to distribute the information (see reference below).
According to Rosenstein, the Russian agents created fictitious online personas during their operation, including the Guccifer 2.0 persona, which was previously believed to be a Romanian hacker.
Here are the headlines:
- *ROSENSTEIN SAYS ONE RUSSIA GROUP STOLE INFO, OTHER SPREAD IT
- *ROSENSTEIN SAYS NO ALLEGATIONS HACKING AFFECTED ELECTION RESULT
- *ROSENSTEIN SAYS HE BRIEFED TRUMP EARLIER THIS WEEK
Per the indictment, there is no indication that any American was a knowing participant in this activity, and no indication that these efforts altered the vote count in any way.
While the timing of the indictments is certainly curious, Rosenstein insisted when asked by a reporter that the timing is purely a coincidence and not the result of political considerations…
Read the full indictment below:
* * *
Update: Fifteen minutes after the press conference was slated to start, we’re still waiting for Rosie to take the stage. But just as Trump was shaking hands with the Queen, this headline hit, confirming that today’s announcement will focus on indictments of 12 Russian intelligence officials from Russia’s GRU intelligence agency (said to be the base of Russian cyber operations). As we noted below, the announcement comes just days before President Trump’s summit meeting with President Putin in Helsinki.
- 12 RUSSIAN INTELLIGENCE OFFICIALS INDICTED BY U.S. GOVERNMENT
- U.S. SAYS 12 INDICTED RUSSIANS PART OF GRU INTELLIGENCE AGENCY
- GRAND JURY SAYS RUSSIAN INTELLIGENCE OFFICERS HACKED INTO COMPUTER NETWORKS OF HILLARY CLINTON CAMPAIGN, DEMOCRATIC NATIONAL COMMITTEE
- U.S.: RUSSIANS TARGETED CLINTON CAMPAIGN CHAIRMAN, VOLUNTEERS
The officers are supposedly related to the hacking of the DNC, Guccifer 2.0 and DCLeaks.
The first images of the indictment press release have surfaced on twitter:
Laura Jarrett
✔@LauraAJarrett
Can confirm Rosenstein presser starting shortly is special counsel related
Laura Jarrett
✔@LauraAJarrett
Here’s BBG:
With the charges, Mueller’s prosecutors have marked out another Internet pathway they say Russia used to influence the U.S. election. On Feb. 16, his prosecutors charged 13 Russians and three Russian entities they said were part of a broader effort to sow discord among U.S. voters through social media — which they used to impersonate Americans, coordinate with unwitting U.S. activists and even plan rallies.
* * * *
Right on cue, the leaks about today’s announcement have hit with minutes to spare before Rosie takes the stage. CNN is reporting that new indictments in the Mueller probe are expected to be handed down today.
*NEW INDICTMENT(S) ARE SAID TO BE EXPECTED IN MUELLER PROBE: CNN
erica orden
✔@eorden
CNN: Prosecutors from Robert Mueller’s Special Counsel’s Office & the Justice Department’s National Security Division visited the courtroom of a federal magistrate judge in DC at 11:30 a.m. to return a grand jury indictment.
A senior DOJ official has apparently confirmed that the press conference will be “special counsel” related.
Steve Brusk
✔@stevebruskCNN
A Justice Department official confirms Deputy Attorney General Rosenstein’s upcoming press conference is special counsel-related
Rosenstein also timed his press conference to upstage President Trump’s meeting with the Queen.
A Free Black Man.
Rod Rosenstein is purposefully timing his press conference at the same time President Trump is supposed to be meeting The Queen of England. The Deep State is real and it is petty as hell.
If accurate, the timing is certainly well-choreographed, given Trump’s summit with Russian President Vladimir Putin next week.
* * *
It’s Friday the 13th and Deputy AG Rod Rosenstein has cryptically revealed that he will be holding a press conference at 11:45 am ET for a “law enforcement announcement.” Since deputy attorney generals don’t typically call their own press conferences, it’s probable that today’s briefing has something to do with the Mueller probe.
Unsurprisingly, the first question on everybody’s tongue is “who’s going to be indicted today?”
And with good reason: The special counsel and Rosenstein haveissued indictments on a Friday before (though Mueller’s name wasn’t included on the Department of Justice’s list of attendees and it doesn’t appear that he will be joining his boss for the announcement).
But given Peter Strzok’s chaotic Congressional testimony on Wednesday, it’s possible that could also be the subject.
Perhaps the biggest question on observers minds is whether today’s conference has anything to do with former Trump attorney Michael Cohen, who has reportedly been meeting with prosecutors in recent weeks about possibly striking a cooperation deal in exchange for testimony against Trump.
It’s possible the subject of the announcement will leak in the minutes before the press conference begins. Though Mueller has managed to keep recent indictments (including the indictments of Russian entities suspected of interfering in the US election) under wraps (not to presume that the announcement will be an indictment).
For all we know, Rosenstein could be preparing to announce his resignation.
Watch the press conference live below:
WE WILL SEE YOU ON MONDAY NIGHT.
HARVEY
harveyorganblog.com 