OCTOBER 29/DOW PLUMMETS 242 POINTS WITH THE NASDAQ DOWN 116.92: THE DOW FROM ITS HIGHS: DOWN 900 POINTS/GOLD DOWN $7.75 TO $1225.80/SILVER DOWN 27 CENTS TO $14.42/TRUMP STATES THAT IF THE MEETING WITH XI FAILS THEN THE USA WILL TARIFF ALL CHINESE GOODS: THE CHINESE YUAN FINISHES THE DAY ALMOST AT 6.97 TO THE DOLLAR/MERKEL HANDED A BIG DEFEAT IN HESSE: SHE WILL DROP BEING HEAD OF THE CDU BUT STILL BE THE CHANCELLOR/AS PROMISED TO YOU THE USA TRUE DEFICIT IS 1.3 TRILLION (NOT INCLUDING THE FED BOND ROLL OFF)

I WILL TRY TO DELIVER A COMMENTARY TOMORROW BUT I MAY NOT BE ABLE TO.

 

H

 

 

GOLD: $1225.80 DOWN  $7.75 (COMEX TO COMEX CLOSINGS)

Silver:   $14.42 DOWN 27 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1229.10

 

silver: $14.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

OCT

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  OCT CONTRACT: 14 NOTICE(S) FOR 1400 OZ

Total number of notices filed so far for OCT:  1838 for 183800 OZ  (5.7169 TONNES)

 

 

 

 

 

FOR OCTOBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 502 for 2,510,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $6433: down  $60

 

Bitcoin: FINAL EVENING TRADE: $6340  down 154 

 

end

 

XXXX

 

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 CONSIDERABLE 1145 CONTRACTS FROM 204,498 UP TO  205,643 WITH YESTERDAY’S 7 CENT RISE IN SILVER PRICING AT THE COMEX. TODAY WE  MOVED CLOSER TO  AUGUST’S RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY(WELL OVER 30 MILLION OZ AT THE COMEX FOR JULY , 6 MILLION OZ FOR AUGUST AND NOW JUST LESS THAN 31 MILLION OZ STANDING IN SEPTEMBER. AS WELL WE ARE WITNESSING 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 FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

EFP’S FOR NOV.  691 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 691 CONTRACTS. WITH THE TRANSFER OF 691 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 691 EFP CONTRACTS TRANSLATES INTO 3.455 MILLION OZ  ACCOMPANYING:

1.THE 7 CENT RISE 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);  30.370 MILLION OZ  STANDING FOR DELIVERY IN JULY, FOR AUGUST: 6.065 MILLION OZ AND  39.505 MILLION  OZ STANDING  IN SEPT. AND 2,520,000 OZ STANDING IN OCTOBER.

 

 

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

39,672 CONTRACTS (FOR 21 TRADING DAYS TOTAL 39,672 CONTRACTS) OR 198.36 MILLION OZ: (AVERAGE PER DAY: 1889 CONTRACTS OR 9.445 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  198.36 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 28.33% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’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:           2,417.8    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

ACCUMULATION FOR JULY 2018:                                            172.84          MILLION OZ

ACCUMULATION FOR AUGUST 2018:                                      205.23          MILLION OZ.

ACCUMULATION FOR SEPTEMBER 2018:                                 167,05          MILLION OZ

RESULT: WE HAD A CONSIDERABLE INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1145 WITH THE 7 CENT RISE IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A FAIR SIZED EFP ISSUANCE OF 691 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) .

TODAY WE GAINED A GOOD SIZED: 1836 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 691 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 1145  OI COMEX CONTRACTS. AND ALL OF  DEMAND HAPPENED WITH A 7 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.70 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THE BIG JULY DELIVERY MONTH OF SLIGHTLY OVER 30 MILLION OZ, IN AUGUST ANOTHER BIG 6.065 MILLION OZ IN A NON ACTIVE MONTH AND IN SEPTEMBER AN FINAL MONSTROUS 39.505 MILLION OZ OF SILVER STANDING FOR DELIVERY… NOBODY IS PAYING ATTENTION TO THE HUGE NUMBER OF PHYSICAL OUNCES STANDING FOR SILVER THESE PAST SEVERAL MONTHS.

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.025 BILLION OZ TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

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

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX 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.  

AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  AN INITIAL HUGE 39.505 MILLION OZ./AND NOW OCTOBER: 2,520,000 oz
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  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 GOOD SIZED 3274 CONTRACTS UP TO 488,496 WITH THE SMALL GAIN IN THE COMEX GOLD PRICE/FRIDAY’S TRADING (A RISE IN PRICE OF $3.65).THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY STRONG SIZED 9110 CONTRACTS: ALWAYS, ON THE WEEK PRIOR TO FIRST DAY NOTICE IN ANY ACTIVE MONTH WHETHER GOLD OR SILVER THE OI COLLAPSES.  IT IS HERE THAT THE MIGRANTS RECEIVE THEIR FIAT BONUS FOR ENGAGING IN THIS EXERCISE. WE HAD THE FOLLOWING EFP ISSUANCE FOR TODAY:

 

NOVEMBER HAD EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 9110 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 488,496. 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 HUMONGOUS OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 12,384 CONTRACTS:  3275 OI CONTRACTS INCREASED AT THE COMEX AND 9110 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 12,384 CONTRACTS OR 1,238,400 OZ =38.52 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A SMALL RISE IN THE PRICE OF GOLD/ FRIDAY TO THE TUNE OF $3.65??.

 

 

 

 

YESTERDAY, WE HAD 5874 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 161,007 CONTRACTS OR 16,100,700 OZ OR 500.799 TONNES (21 TRADING DAYS AND THUS AVERAGING: 7622 EFP CONTRACTS PER TRADING DAY OR 762,200 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 21 TRADING DAYS IN  TONNES: 500.799 TONNES

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

THUS EFP TRANSFERS REPRESENTS 500.799/2550 x 100% TONNES =  19.63% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,168.38*  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)

ACCUMULATION OF GOLD EFP FOR JULY 2018                       605.5 TONNES     (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR AUG. 2018                      488.54  TONNES  (23 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR SEPT 2018                       470.64 TONNES   (19 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 GOOD SIZED INCREASE IN OI AT THE COMEX OF 3274 DESPITE THE SMALL GAIN IN PRICING ($3.65) THAT GOLD UNDERTOOK FRIDAY) //. WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9110 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 9110 EFP CONTRACTS ISSUED, WE HAD AN HUGE GAIN OF 14,699 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

9110 CONTRACTS MOVE TO LONDON AND 3274 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 38.52 TONNES). ..AND ALL OF THIS HUGE DEMAND OCCURRED WITH A SMALL GAIN OF $3.65 IN YESTERDAY’S TRADING AT THE COMEX.??

 

 

we had: 14 notice(s) filed upon for 1400 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $7.75 TODAY:

NO CHANGES IN GOLD INVENTORY TODAY

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   749.64 TONNES

Inventory rests tonight: 749.64 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 27  CENTS TODAY

 

A HUGE CHANGE IN SILVER INVENTORY AT THE SLV

A WITHDRAWAL OF 1.879 MILLION OZ FROM THE SILVER INVENTORY

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 328.496 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 1145 CONTRACTS from 204,498 UP TO 205,643  AND MOVING A LITTLE CLOSER TO THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..

 

.

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

i) 0 EFP’s for November… and

 

691 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1631 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 1145 CONTRACTS TO THE 691 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GOOD  NET GAIN OF 1836 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE  GAIN ON THE TWO EXCHANGES: 9.18 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER…AND NOW OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.

 

 

RESULT: A HUGE INCREASE IN SILVER OI AT THE COMEX DESPITE THE 7 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A SMALL SIZED 691 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 56.74 POINTS OR 2.18% //Hang Sang CLOSED UP 94.11 POINTS OR 0.38% //The Nikkei closed DOWN 34.80 OR 0.16%/ Australia’s all ordinaires CLOSED UP 0.94%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9567 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 67.33 dollars per barrel for WTI and 77.27 for Brent. Stocks in Europe OPENED GREEN //.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9567 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9576: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /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

 

 

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

b) REPORT ON JAPAN

3 C/  CHINA

Late in the day, stocks and the Chinese yuan tumble on a report that the USA will announce a tariff on all Chinese imports if the Trump Xi meeting fails

( zerohedge)

 

 

4/EUROPEAN AFFAIRS

i)UK/ROYAL BANK OF SCOTLAND

RBS sets aside 100 million pounds to cover uncertainty over Brexit.  It is the first bank to set aside moneys due to Brexit. It also missed on its earnings as the stock fell 4% on Friday.

( Reuters)

ii)Germany

Merkel;s CDU suffers a crushing loss in Hess district: also the worst result for his coalition partner SPD

( zerohedge)

iii)The junior SPD party gives Merkel an ultimatum after a devastating loss in Hess.  She reiterates that the “state of the Government is unacceptable”

( zero hedge)

iv)Merkel steps down as CDU leader but she is still Chancellor

( zero hedge)

v)Germany and France just did an about face and turned towards Russia and thus breaking the USA boycott of Syria

Germany needs Russia’s gas and so does France

 

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)SAUDI ARABIA/USA/TURKEY
Saudi Arabia refuses Turkey’s request to hand over the suspected 15 Khashoggi killers
(courtesy zerohedge)
ii)IRAN
The poor Iranian that hoarded Iranian gold coins will no doubt receive a death sentence for ‘rigging”
( zerohedge)

6. GLOBAL ISSUES

 

 

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

ARGENTINA

We wonder how long will this last:  IMF ups its bailout loan to Argentina for $56.3 billion

read the summary below for implications.  The citizens are very unhappy that he went to the IMF

( zerohedge)

 

 

9. PHYSICAL MARKETS

i)China and Japan sign a 3 yr currency fx deal of 30 billion dollars and this by-passes the USA dollar

( Reuters)

ii)traders acquitted in the libor rigging despite the fact that the banks themselves admitted to the crime

( Bloomberg)
iii)One Bundesbank economist has a radical plan to halve Italy’s debt:  a huge “wealth tax” hitting the big families.  No wonder Italian’s are leaving Italy’s shores in banking for Switzerland
(courtesy Bloomberg/GATA)

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

 

 

MARKET TRADING

ii)Market data

Hard data:  personal income, personal spending growth tumble with this latest September read.  Savings rate continues to slump.

( zerohedge)

ii)I promised you that the true USA deficit was 1.2 trillion ending Sept 30/2018.  It seems that the USA will need to borrow over 1.3 trillion dollars this coming year. And this does not include the 600 billion dollars in roll off Fed money that treasury must pay back the Fed.
total amount needed to borrow: 1.9 trillion (you will recall my figures were 1.8 trillion so i am off a bit.  The reason is student loans plus other off the books deficits.
(courtesy zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)The left now blame Trump for the horrific anti-Semitic Pittsburgh Pennsylvania synagogue massacre.
( zerohedge)
B)A good one from Michael Snyder: 10 huge numbers that prove the middle class is disintegrating and that the USA is rapidly becoming a nation of Government dependents.
( Michael Snyder)

iv)SWAMP STORIES

 

 

E)SWAMP STORIES/THE KING REPORT

Let us head over to the comex:

 

The total gold comex open interest ROSE BY A GOOD SIZED 3274 CONTRACTS UP to an OI level 488,496 DESPITE THE SMALL RISE IN THE PRICE OF GOLD ($3.65 IN YESTERDAY’S COMEX TRADING). FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF OCT..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 9110 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  9110 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  9110 CONTRACTS.

THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A 12,384 TOTAL CONTRACTS IN THAT 9110 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A GOOD 3274 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  12,384 contracts OR 1,238,400 OZ OR 38.52 TONNES.

Result: A GOOD SIZED INCREASE IN COMEX OPEN INTEREST DESPITE  THE SMALL RISE IN PRICE/ YESTERDAY (ENDING UP WITH THE RISE IN PRICE OF ($3.65). THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  12,384 OI CONTRACTS..

We are now in the active contract month of OCTOBER. For the October contract month, we LOST 10 contracts to 14 contracts.  We had 10 notices yesterday, so we GAINED 0 contracts or NIL oz will  stand for delivery at the comex and these guys refused to march over to London as they shunned receiving London based forwards on top of a fiat bonus.

 

The next delivery month is the non active NOVEMBER contract month and here the OI FELL by 60 contracts DOWN to 194.  The next delivery month after November is the very big December contract month and here the OI ROSE by 1300 contracts UP to 373,789 contracts.

 

 

 

 

WE HAD 14 NOTICES FILED AT THE COMEX FOR 1400 OZ.

 

FOR COMPARISON BETWEEN LAST YR AND TODAY:

 

FOR THE OCTOBER CONTRACT MONTH: OCTOBER IS THE WEAKEST OF ALL DELIVERY MONTHS IN GOLD.

FOR THE COMEX OCT 2017 GOLD CONTRACT MONTH: WE INITIALLY HAD 300,600 OZ STAND FOR DELIVERY OR 9.349 TONNES. (VS 13.695 TONNES OCT 2018)

AT THE CONCLUSION OF THE OCTOBER/2017 TRADING MONTH: 333,300 OZ OR 10.367 TONNES FINALLY STOOD FOR DELIVERY

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI ROSE BY 1145 CONTRACTS FROM 204,498 UP TO 205,643 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S GOOD  OI COMEX GAIN OCCURRED WITH A 7 CENT GAIN IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF OCTOBER AND, WE WERE  INFORMED THAT WE HAD A FAIR SIZED 691 EFP CONTRACTS:  FOR NOVEMBER:  0 CONTRACTS AND FOR …

 

FOR DECEMBER: 691 CONTRACTS 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: 691.  ON A NET BASIS WE GAINED 1836 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED  1145 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 691 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   1836 CONTRACTS...AND ALL OF THIS HUGE DEMAND OCCURRED WITH A 7 CENT RISE IN PRICING// YESTERDAY.

 

 

 

 

We are now in the non active delivery month of October and here we had a LOSS of 0 contracts to stand at 2 contracts.  We had 0 notices filed  YESTERDAY so we gained 0 contracts or AN ADDITIONAL NIL oz will stand for delivery at the comex as these guys refused to accept a London based forward plus as well as a fiat bonus . Somebody was after badly needed physical silver.

 

After October, is the non active delivery month of November and here we gained 6 contracts up to 1270 contracts.  After November, we have a December contract and here we lost 952 contracts up to 159,741

 

 

 

 

 

 

 

 

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

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 213,637 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  327,618  contracts..

 

 

 

 

 

 

AND NOW COMPARISON FOR OCTOBER:

 

FOR THE OCTOBER 2017 CONTRACT MONTH WE HAD 4.205,000 OZ OF SILVER INITIALLY STAND FOR DELIVERY.

BY MONTH’S END WE HAD 5,475,000 OZ FINALLY STAND AS QUEUE JUMPING IN SILVER WAS ALREADY IN THE NORM.

OCTOBER IS A NON ACTIVE DELIVERY MONTH FOR SILVER BUT AS YOU CAN SEE OCT 2017 DELIVERIES WERE PRETTY

GOOD.

 

 

 

 

 

INITIAL standings for  OCT/GOLD

OCT 29-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 100  oz
Brinks
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

oz

 

 

 

 

 

 

 

 

No of oz served (contracts) today
14 notice(s)
 1400 OZ
No of oz to be served (notices)
0 contracts
(nil oz)
Total monthly oz gold served (contracts) so far this month
1838 notices
183,800 OZ
5.7169TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entry:

 

total gold entering dealer:  0 oz

total gold withdrawing from the dealer;  0 oz

 

we had 0 kilobar transaction/
we had 0 withdrawal out of the customer account:
total customer withdrawals:  0 oz
we had 0 customer deposit
total customer deposits: NIL oz
we had 0  adjustment..

FOR THE OCTOBER 2018 CONTRACT MONTH)

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 14 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.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the OCT/2018. contract month, we take the total number of notices filed so far for the month (1838) x 100 oz or 100 oz, to which we add the difference between the open interest for the front month of OCT. (14 contracts) minus the number of notices served upon today (14 x 100 oz per contract) equals 183,800 OZ OR 5.7186 TONNES) the number of ounces standing in this non active month of OCT

 

Thus the INITIAL standings for gold for the OCT/2018 contract month:

No of notices served (1838 x 100 oz)  + {14)OI for the front month minus the number of notices served upon today (14x 100 oz )which equals 183,800 oz standing OR 5.7186 TONNES in this active delivery month of OCTOBER.

 

We gained 0  contracts or NIL oz of gold will stand as these guys refused to morph into London based forwards as well as shunning a fiat bonus

 

 

 

THERE ARE ONLY 4.2819 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 5.7169 TONNES STANDING FOR OCTOBER  

 

 

 

total registered or dealer gold:  137,664.218 oz or   4.2819 tonnes
total registered and eligible (customer) gold;   8,086,768.222 oz 251.53 tonnes
 I BELIEVE THAT THIS IS THE LOWEST REGISTERED GOLD READING IN THE COMEX HISTORY..AS WELL AS THE LONGEST WE HAVE SEEN THE REGISTERED COLUMN AT 5 TONNES OR LESS.

IN THE LAST 25 MONTHS 104 NET TONNES HAS LEFT THE COMEX.

LADIES AND GENTLEMEN: THERE IS NO GOLD AT THE COMEX..AS THE CROOKS SEEMS TO BE FORCING LONGS TO TAKE DELIVERY OF LONDON FORWARDS AND NOT TAKE POSSESSION OF ANY GOLD AT THE COMEX/

end

And now for silver

AND NOW THE OCTOBER DELIVERY MONTH

OCTOBER INITIAL standings/SILVER

OCT 29 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 2.470,191.030 oz
CNT

 

 

Deposits to the Dealer Inventory
604.135.800
oz
BRINKS
Deposits to the Customer Inventory
607,324.600
 oz
JPMORGAN
&
524,340.210 oz
Scotia
total 1,130,877.410 oz
No of oz served today (contracts)
0
CONTRACT(S)
NIL OZ)
No of oz to be served (notices)
2 contracts
(10,000 oz)
Total monthly oz silver served (contracts) 502 contracts

(2,510,000 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 1 inventory movement at the dealer side of things

i) Into Brinks: 604,135.800 oz

total dealer deposits: 604,135.800 oz

total dealer withdrawals: 0 oz

we had 2 deposit into the customer account

i) Into JPMorgan: 606.53.200 oz

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

JPMorgan now has 149.1 million oz of  total silver inventory or 51.5% of all official comex silver. (149.1 million/289.613 million)

ii)Into Scotia:  524,340.210 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  1,130,877.410  oz

we had 1 withdrawals from the customer account;

 

i) Out of CNT:  2.470.191.030 oz

 

 

 

total withdrawals: 2,470,191.030 oz

it seems that somebody is pulling (taking delivery) of a massive amount of silver somewhere.

this is a huge amount of activity

 

we had 0 adjustments

 

 

 

 

 

 

 

 

 

total dealer silver:  80.210 million

total dealer + customer silver:  289.613  million oz

The total number of notices filed today for the OCTOBER 2018. contract month is represented by 0 contract(s) FOR NIL oz. To calculate the number of silver ounces that will stand for delivery in OCT., we take the total number of notices filed for the month so far at 502 x 5,000 oz = 2,510,000 oz to which we add the difference between the open interest for the front month of OCT. (2) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the OCT/2018 contract month: 502(notices served so far)x 5000 oz + OI for front month of OCT( 2) -number of notices served upon today (0)x 5000 oz equals 2,520,000 oz of silver standing for the OCT contract month.  This is a huge number of oz standing for an off delivery month.

We gained 0 contract or an additional NIL oz will be standing at the Comex as these guys refused to morph into London based forwards on top of not receiving a fiat bonus .

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 88.258 CONTRACTS  …

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 88,337 CONTRACTS..

 

 

YESTERDAY’S CONFIRMED VOLUME OF 75,305 CONTRACTS EQUATES TO 441 million OZ  OR 63.0% 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 -4.93% (OCT 29/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.64% to NAV (OCT 29/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -4.93%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):

NAV 12.39/TRADING 11.80/DISCOUNT 4.80

END

And now the Gold inventory at the GLD/

OCTOBER 29/WITH GOLD DOWN $7.75 TODAY/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCTOBER 26/WITH GOLD UP $3.65 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCT 25/WITH GOLD UP $1.15: A DEPOSIT OF 1.76 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS AT 749.64 TONNES. FROM ITS LOW POINT AT THE BEGINNING OF OCTOBER THE GLD HAS ADDED.19.47 TONNES OF GOLD

OCT 23/WITH GOLD UP $11.85 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 747.88 TONNES

Oct 22/WITH GOLD DOWN $3.90 TODAY: A WITHDRAWAL OF 2.97 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 745.82

AND THEN: A DEPOSIT OF 2.06 TONNES SUCH THAT THE FINAL RESTING INVENTORY IS 747.88 TONNES

OCT 19/WITH GOLD DOWN $1.70 : NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 748.76 TONNES

OCT 18/WITH GOLD UP $2.80/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RSTS AT 748.76 TONNES

OCT 16/WITH GOLD UP BY ONLY $1.00/WE HAD ANOTHER 4.12 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 748.76 TONNES

OCT 15/WITH GOLD UP $8.45/ANOTHER 5.65 TONNES OF GOLD WAS ADDED TO THE GLD INVENTORY/INVENTORY RESTS AT 744.64 TONNES

OCT 12/WITH GOLD DOWN $4.35/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 738.99 TONNES

OCT 11/WITH GOLD UP $35.20 TODAY: A HUGE PAPER GOLD INVENTORY GAIN OF 8.82 TONNES/INVENTORY RESTS AT 738.99 TONNES

OCT 10/WITH GOLD UP $2.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17 TONNES

OCT 9/WITH GOLD UP $2.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17

OCT 8/WITH GOLD DOWN $18.60 NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17TONNES

OCT 5/WITH GOLD UP $3.75, WE HAD A BIG WITHDRAWAL OF 1.47 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 730.17 TONNES

OCT 4/WITH GOLD DOWN $1.90/WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/731.64 TONNES

OCT 3/WITH GOLD DOWN $4.05, ANOTHER HUGE REMOVAL OF 6.18 TONNES

OCT 2 WITH GOLD UP $15.80 TODAY A HUGE WITHDRAWAL OF 8.35 TONNES

OCT 1…GOLD ADDS 3.94 TONNES TO THE GLD INVENTORY RESTS AT 746.17 TONNES

SEPT 28/WITH GOLD UP $8.90/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 27/WITH GOLD DOWN $10.90: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

OCT 29.2018/ Inventory rests tonight at 749.64 tonnes

*IN LAST 485 TRADING DAYS: 183.57 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 385 TRADING DAYS: A NET 27.04 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

OCTOBER 29/WITH SILVER DOWN 27 CENTS NO  A HUGE CHANGE IN SILVER INVENTORY AT THE SLV” A WITHDRAWAL OF 1.879 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 328.496 MILLION OZ.

OCTOBER 26/WITH SILVER UP 7 CENTS NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 330.375 MILLION OZ

OCT 25/WITH SILVER DOWN 7 CENTS: ANOTHER HUGE WITHDRAWAL OF 1.315 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 330.375 MILLION OZ/

OCT 23/WITH SILVER UP 22 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.819 MILLION OZ /INVENTORY RESTS AT 331.690 MILLION OZ.

OCT 22/WITH SILVER DOWN 8 CENTS: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 470,000/INVENTORY RESTS AT 334.509 MILLION OZ/

OCT 19/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INV. RESTS AT 334.039 MILLION OZ

OCT 18/WITH SILVER DOWN 6 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.127  MILLION /RESTS AT 334.039 MILLION OZ/

OCT 16/WITH SILVER DOWN 2 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 15/WITH SILVER UP 10 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 12/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 11/WITH SILVER UP 25 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 10/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 9/WITH SILVER UP 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY: SLV INVENTORY RESTS AT 332.912 MILLION OZ

OCT 8/WITH SILVER DOWN 33 CENTS, A GOOD SIZE WITHDRAWAL OF 563,000 OZ/INVENTORY RESTS AT 332.912 MILLION OZ.

OCT 5/WITH SILVER UP 5 CENTS, NO CHANGE IN SILVER INVENTORY AT THE SLV

OCT 4/WITH SILVER DOWN 9 CENTS/A WITHDRAWAL OF 1.316 MILLION OZ

OCT 3 WITH SILVER FLAT, A GOOD INCREASE OF 1.879 MILLION OZ INTO INVENTORY

OCT 2 A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/INVENTOR RESTS AT 332.912

OCT 1.NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.046 MILLION  OZ.

SEPT 28/WITH SILVER UP 41 CENTS, STRANGELY WE HAD A WITHDRAWAL OF .517 MILLION OZ AT THE SLV.INVENTORY RESTS AT 333.046 MILLION OZ/

SEPT 27/WITH SILVER DOWN 10 CENTS: A HUGE WITHDRAWAL OF 1.457 MILLION OZ AT THE SLV/INVENTORY RESTS AT 333.563 MILLION OZ/

 

 

OCT 29/2018:

 

Inventory 328.496 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR RATES TODAY.

YOUR DATA…..

6Month MM GOFO 2.38/ and libor 6 month duration 2.78

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

G0FO+ .40

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.63%

LIBOR FOR 12 MONTH DURATION: 3.06

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.43

end

 

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG

OFF TODAY

 

 
ii) GATA stories
China and Japan sign a 3 yr currency fx deal of 30 billion dollars and this by-passes the USA dollar
(courtesy Reuters)

China and Japan sign three-year FX swap deal amid U.S. trade tension

 Section: 

By Tetsushi Kajimoto
Reuters
Friday, October 26, 2108

TOKYO — Japan and China on Friday signed a currency swap arrangement of up to $30 billion — the largest such bilateral deal concluded by Tokyo — to strengthen financial stability and spur business activity in both countries, the Bank of Japan said. …

The agreements were signed during Japanese Prime Minister Shinzo Abe’s visit to Beijing for the first formal Sino-Japanese summit in seven years, as Asia’s two biggest economies looked to further build relations and trust against a backdrop of trade friction with the United States. …

… For the remainder of the report:

https://www.reuters.com/article/us-china-japan-agreements-swap/china-jap..

 END
traders acquitted in the libor rigging despite the fact that the banks themselves admitted to the crime
(courtesy Bloomberg)

Traders acquitted of FX rigging that banks admitted

 Section: 

British ‘Cartel’ Traders Acquitted of Rigging Currency Market

By Bob Van Voris, Lananh Nguyen, and Chris Dolmetsch
Bloomberg News
Friday, October 26, 2018

Three British traders were acquitted of using an online chatroom to fix prices in the $5.1 trillion-a-day foreign exchange market, a blow to global efforts to police the industry.

A federal jury in New York rejected the U.S. claim that Richard Usher, Rohan Ramchandani and Christopher Ashton, a group known as “The Cartel,” rigged the market from 2007 to 2013 by coordinating trades and manipulating prices on the spot exchange rate for euros and U.S. dollars. They wept in relief as the verdict was handed down Friday in Manhattan federal court, after the jury deliberated for about half a day.

“This is a signal to all foreign exchange traders that they can go back to business as usual,” Mayra Rodriguez Valladares, a former foreign-exchange analyst for the New York Fed, said of the acquittal. “Not holding traders who manipulate rates accountable devalues the integrity of the foreign exchange market.”

Valladares, who also conducts training for bankers and regulators through her consulting firm MRV Associates Inc., predicted the verdict will be bad news for asset managers on the buy side — such as pension funds and insurance companies — who stand to lose money on products tied to the FX market because they lack the minute-to-minute information banks have. And it may lead to increased pressure on regulators.

“The FX code is not going to be seen as having any teeth,” she said, referring to the FX Global Code, a set of guidelines aimed at raising standards.

The men faced as long as 10 years in prison had they been convicted.

Jurors weren’t convinced that the traders’ conduct amounted to a crime.

“It was a microscope that was placed on something that probably was happening all the time,” the jury foreman, Lucien Samaha, 60, an artist in New York City, said after the verdict. “At the end, we found there was not enough evidence.”

Four banks, JPMorgan Chase & Co., Citigroup Inc., Royal Bank of Scotland Group, and Barclays, previously pleaded guilty to manipulating currency markets in 2015 and agreed to pay $2.5 billion in fines. UBS Group AG received immunity from antitrust charges for being the first institution to report misconduct in the FX market, although it pleaded guilty to a related fraud and paid a $203 million penalty. More than a dozen financial institutions have paid about $11.8 billion in fines and penalties globally, with another $2.3 billion spent to compensate customers and investors. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-10-26/jury-rejects-charge-t…

 END
One Bundesbank economist has a radical plan to halve Italy’s debt:  a huge “wealth tax” hitting the big families.  No wonder Italian’s are leaving Italy’s shores in banking for Switzerland
(courtesy Bloomberg/GATA)

A Bundesbank economist has a radical plan to halve Italy’s debt

 Section: 

By Alessandro Speciale
Bloomberg News
Saturday, October 27, 2018

Italy’s populist government doesn’t need to ask for money from European partners to halve its debt — it could tap the large private wealth of its citizens, Bundesbank economist Karsten Wendorff suggested.

The radical proposal echoes the debate in Italian media over a potential “wealth tax.” Unlike a tax, however, it wouldn’t directly eat into the patrimony of the country’s families, according to its proponent, who heads the German central bank’s public finance department

Instead of a European fund that buys Italian government bonds and that is ultimately backed by European taxpayers, a national fund should be created,” Wendorff wrote in the Frankfurter Allgemeine Zeitung on Saturday. “This fund would buy Italian government bonds.”

Such a fund would be financed by “national solidarity bonds” that Italian households would be obliged to purchase — for example, to the tune of 20 percent of their net wealth. At such a rate “almost half of Italian government debt could be converted into solidarity bonds.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-10-27/a-bundesbank-economis…


iii) Other Physical stories:

 

_________________________________________________________________________________________________

 

 

 

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.9567/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER CANCELLED //OFFSHORE YUAN:  6.9576   /shanghai bourse CLOSED DOWN 56.74 POINTS OR 2.18%

. HANG SANG CLOSED UP 94.11 POINTS OR 0.38%

 

 

2. Nikkei closed DOWN 34.80 POINTS OR 0.16%

 

3. Europe stocks OPENED ALL GREEN 

 

 

 

/USA dollar index RISES TO 96.40/Euro RISES TO 1.1409

3b Japan 10 year bond yield: FALLS TO. +.11/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.98/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI:: 67.33 and Brent: 77.27

3f Gold DOWN/JAPANESE Yen DOWN/ CHINESE YUAN:   ON SHORE DOWN/OFF- SHORE:  DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.39%/Italian 10 yr bond yield DOWN to 3.29% /SPAIN 10 YR BOND YIELD DOWN TO 1.53%

3j Greek 10 year bond yield RISES TO : 4.30

3k Gold at $1229.60 silver at:14.67   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 9/100 in roubles/dollar) 65.51

3m oil into the 67 dollar handle for WTI and 77 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.24DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9988 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1395 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 +0.39%

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 3.10% early this morning. Thirty year rate at 3.33%

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

6.  TURKISH LIRA:  UP  TO 5.5168

US Futures, European Markets Jump Despite

Another Chinese Rout

After trading modestly in the red for much of Monday’s early session, US equity futures rebounded to session highs even with IBM 5% lower after its offer to buy Red Hat at a ridiculous 63% premium…

… and European stocks jumped as investors rediscovered some confidence as corporate buybacks were set to return with a bang. The euro first dropped then jumped after reports German Chancellor Angela Merkel would step down as leader of Germany’s ruling CDU party, although she would stay on as Chancellor.

Meanwhile, concern over China’s slowing economy sent the Shanghai Composite lower for another day, sliding 2.2% on Monday and keeping Asian stocks under pressure.  Chinese data underscored worries of a cooling economy as profit growth at its industrial firms slowed for the fifth consecutive month in September due to ebbing sales of raw materials and manufactured goods.

Shares in Tokyo also ended lower after rising more than 1% at one stage. South Korea also slumped, but markets in Hong Kong, Australia and India all gained.

Contracts for the S&P 500, Dow Jones and Nasdaq indexes all climbed as the European morning wore on, tracking a bank-led rally for the Stoxx Europe 600 Index after HSBC Holdings Plc earnings beat expectations. Earlier in Asia the mood had been more cautious, and shares in Tokyo ended down after rising more than 1 percent at one stage. Gauges in China and South Korea slumped, but those in Hong Kong, Australia and India all gained.

European shares climbed led by banks thanks to encouraging earnings reports and relief that S&P did not downgrade Italy on Friday and after HSBC Holdings earnings beat expectations, while the Stoxx 600 Automobiles & Parts index surged 3.8%, the biggest intraday rally since July 5, as China’s top economic planning body is proposing cutting the tax levied on car purchases by half.

The euro first fell to a session low, then rebounded sharply, after a senior party source said German Chancellor Angela Merkel would not seek re-election as party chairwoman after bruising losses for her Christian Democrats in a regional election in Hesse. Germany’s DAX was up 0.7% while the leading index of euro zone stocks rose 0.5 percent, boosted by a weaker euro. Italy’s FTSE MIB led the market with a 1.5% gain after Italian bond yields fell sharply to a one-week low following Standard & Poor’s decision to leave Italy’s sovereign rating unchanged at BBB, sparking relief there was no ratings downgrade, even though it lowered the outlook to negative from stable.

With risk gradually returning to markets, core European bonds turned lower alongside Treasuries. The dollar jumped while gold dropped. Oil fell toward $67 a barrel as traders assessed mixed supply signals.

Today’s risk-on session caps a torrid month in which global stocks have lost almost $8 trillion of value, and are set for the biggest wipeout since the height of the financial crisis a decade ago on concerns ranging from peak earnings growth and the U.S.-China trade war to the end of easy money and rising rates.

As discussed last Friday, traders have slashed bet for more Federal Reserve hikes for next year, with markets now expecting less than two quarter-point increases in 2019, compared with three projected by policy makers, and a rate cut in 2020.

Emerging markets stocks were a bright spot, gaining 0.1% in their first rise in five sessions after far-right candidate Jair Bolsonaro won the second-round runoff in Brazil’s presidential election. Brazil-exposed stocks in Europe climbed as investors cheered the win. Blackrock’s Latin American Investment Trust London-listed shares gained 7.4% while a Germany-listed iShares MSCI Brazil ETF climbed 6.6%.

“Our initial assessment for the Bolsonaro administration is that it will have a pro-business stance, focused on enhancing the country’s competitiveness,” said UBS analysts.

Despite gains on Monday, investors remain wary of betting the farm on a turnaround in risk: “The only way I can summarize the core sentiment among the European investors I met is something like ‘pretty grim’,” wrote Erik Nielsen, group chief economist at UniCredit, in a note to clients.

Still, the MSCI world equity index managed a 0.1% gain. The index is down 9.3% so far this month and has shed $6.7 trillion in market capitalization since its January peak: “There’s room for a bit of a downside to go, because I do see this as being largely a structural shift in markets,” Kyle Rodda, a market analyst at IG Group in Melbourne, said on Bloomberg Television. “Sentiment is still to the downside, is still quite bearish and there will be a little while for this correction to play out.”

Today is the presentation of the UK budget and it may have an impact on several sectors, with pensions and bookmakers most likely to face some pressure. Banks, retailers and homebuilders will also be closely watched.

In FX, the dollar index rose 0.2 percent to 96.553 after gaining 0.7 percent last week. The euro fell 0.2 percent to near a two-month low at $1.1381. Sterling fell 0.2 percent, holding near a two-month trough of $1.2775 ahead of Britain’s annual budget due later on Monday.  Finance minister Philip Hammond will likely urge his divided Conservative Party to get behind the government’s push for a Brexit deal, or put at risk a long-awaited easing of austerity. Mexico’s peso slumped more than 1% after a vote to scrap a $13 billion airport.

In commodities, oil also reversed early gains to dip on growing worries about Chinese growth. U.S. crude fell 58 cents to $67.01 per barrel and Brent crude slid 71 cents to $76.89.

Market Snapshot

  • S&P 500 futures up 0.3% to 2,676.50
  • STOXX Europe 600 up 0.4% to 353.69
  • MXAP down 0.2% to 146.38
  • MXAPJ up 0.2% to 463.14
  • Nikkei down 0.2% to 21,149.80
  • Topix down 0.4% to 1,589.56
  • Hang Seng Index up 0.4% to 24,812.04
  • Shanghai Composite down 2.2% to 2,542.10
  • Sensex up 1.5% to 33,838.77
  • Australia S&P/ASX 200 up 1.1% to 5,728.16
  • Kospi down 1.5% to 1,996.05
  • German 10Y yield rose 0.3 bps to 0.355%
  • Euro down 0.04% to $1.1389
  • Italian 10Y yield fell 4.6 bps to 3.074%
  • Spanish 10Y yield fell 2.6 bps to 1.541%
  • Brent futures down 0.6% to $77.18/bbl
  • Gold spot down 0.3% to $1,230.45
  • U.S. Dollar Index up 0.2% to 96.50

Top Overnight News from Bloomberg

  • Brazilian markets were set for an advance after the nation’s next president Jair Bolsonaro pledged to trim the deficit, pay down debt and reduce the size of government after results showed him cruising to victory over Fernando Haddad of the left-wing Workers’ Party
  • German Chancellor Angela Merkel will quit as head of her Christian Democratic party after nearly two decades, a person familiar with the matter said, a dramatic sign of her waning authority that will raise questions about her staying power as chancellor
  • Instability plaguing German Chancellor Angela Merkel’s fourth term was laid bare in the latest state election drubbing, with her coalition partner’s flagging support posing a growing threat to her government
  • Some leading lawmakers backing Brexit are examining plans to keep the U.K. in the European Economic Area until the government reaches as a trade agreement with the bloc, the Sunday Telegraph reported
  • Traders are paring bets on 2019 rate hikes by the Federal Reserve as disappointing corporate earnings fuel losses in U.S. stocks. Markets are now factoring in fewer than two quarter-point hikes for next year, compared with the three increases that policy makers project
  • U.S. Treasury Secretary Steven Mnuchin is set to snatch from Timothy Geithner the mantle of selling a record amount of notes and bonds as he seeks to finance America’s growing budget deficit
  • China’s economic growth continued to slow in October, a period in which the trade conflict with the U.S. has intensified and policy makers have stepped up support for businesses. That’s the signal from a Bloomberg Economics gauge aggregating the earliest- available indicators on business conditions and market sentiment
  • Bank of Japan will maintain its policy settings this week, according to economists surveyed by Bloomberg, amid a growing view that the BOJ will eventually use greater flexibility in yield movements as a tightening measure

European equities are kicking off the week on the front-foot, despite the downbeat tone in Asia. As such, Eurostoxx 50 (+0.8%) is supported mostly by the financial sector following optimistic earnings from HSBC (+4.6%), which saw the likes of Intesa Sanpaolo (+3.2%), Deutsche Bank (+1.7%) and RBS (+4.1%) higher in tandem. Elsewhere, Europe’s auto stocks index (+3.9%) rose sharply following reports that Chinese regulators are said to propose a 50% cut to car purchase tax. Subsequently, DAX 30 outperforms as the index is buoyed by shares in Daimler (+5.4%), BMW (+5.2%) and Volkswagen (+5.1%). Finally, Euronext is experiencing problems in which the CAC and AEX remain halted until the technical glitches are resolved.

Top European News

  • U.K.’s Hammond to Set Out a Budget That Brexit Talks Could Break
  • Helicopter Maker Leonardo Slips After Fatal Leicester Crash
  • Italy Stocks Outperform Led by Banks as S&P Rating Cut Avoided
  • Browder Laundering Complaint Shows $97 Million Nokia Payment

Asian equity markets began the week mixed as the region’s attempts to pick itself up following last week’s stock rout, waned heading into this week’s key earnings releases and month-end. ASX 200 (+1.1%) and Nikkei 225 (-0.3%) were both initially positive in which the healthcare sector led the broad upside in Australia, while the Japanese benchmark was less decisive as earnings dominated news flow. Elsewhere, Hang Seng (-0.2%) and Shanghai Comp. (-2.1%) were subdued with the mainland worst hit following softer Industrial Profit growth and a net liquidity drain by the PBoC, while this week’s key earnings including China’s big 4 banks further added to the tentativeness. Finally, 10yr JGBs were choppy as prices reflected the indecisiveness across stocks and eventually edged higher as the risk tone in Japan deteriorated.

Top Asian News

  • Early Indicators Show China’s Slowdown Worsened Again in October
  • Hong Kong’s New-Home Sales Tumble in First Data Since Rate Rise
  • Angst Over Chinese Spending Shaves $10 Billion Off Liquor Stock

In FX, NZD/AUD/CAD – All performing well vs their US counterpart to varying degrees, with the Kiwi outpacing and  bouncing firmly from overnight lows to 0.6555 vs circa 0.6500 amidst a broad upturn in risk sentiment, while Aud/Usd struggles around 0.7100 and the Loonie pivots 1.3100. GBP/EUR – Both choppy, but the Pound relatively rangebound ahead of the UK budget and following mixed data, as Cable hovers above 1.2800 within a tight 1.2805-40 range. However, the single currency has been whippy between 1.1360-1.1415 trading parameters amidst reports that German Chancellor Merkel will not stand for re-election as CDU head after serving out the current term, but would like to remain as Chancellor in wake of another chastening regional result for the coalition. However, Eur/Usd has bounced firmly ahead of hefty option expiry interest at the 1.1350 strike (1.5 bn) and a sharp rally in EU auto stocks on China’s cut in purchase tax to 5% from 10%. CHF/JPY – Victims of the improvement in risk appetite, with the Franc just off parity-plus lows and Jpy retreating from circa 111.80 to 112.25 amidst similar reversals in cross pairings. EM- Broad gains in regional currencies vs the Usd, but with the Mxn a notable underperformer on disappointment that Mexico will not pursue plans to build a new airport. Looking ahead, it will be interesting to see how the Brl reacts to Bolsonaro’s resounding 2nd round win vs a flattish close on Friday.

In commodities, WTI and Brent are both down by around 0.3% amid concerns that global growth is slowing, particularly in China, and that ongoing market uncertainties are leading to a downward pressure on prices. Of note with the Iranian sanctions, it is imminent is that India, China and Turkey, three of Iran’s top five customers, are resisting pressure to completely end purchases; citing a lack of worldwide supply for this. Over in the metals market, gold is down by 0.2% as the yellow metal moves inversely to the USD, although still in a relatively tight USD 5/oz range as market concerns still remain over upcoming US earnings, trade tensions and a slowdown in global economic growth. Elsewhere, the head of the Japanese steel industry group stated that he is worried about the weakening Chinese economy. Copper’s gains have been cut after a slowdown in industrial profits indicate that China’s economy is losing steam, affecting demand for the metal.

US Event Calendar

  • 8:30am: Personal Income, est. 0.4%, prior 0.3%
  • 8:30am: Personal Spending, est. 0.4%, prior 0.3%; Real Personal Spending, est. 0.3%, prior 0.2%
  • 8:30am: PCE Deflator MoM, est. 0.1%, prior 0.1%
  • 8:30am: PCE Deflator YoY, est. 2.0%, prior 2.2%; PCE Core YoY, est. 1.98%, prior 2.0%
  • 10:30am: Dallas Fed Manf. Activity, est. 28.1, prior 28.1

DB’s Jim Reid concludes the overnight wrap

I suspect if markets ended up this week being as boring as watching paint dry it would be a welcome relief for many investors. So that brings us to what to make of last week’s sell-off? As you’ll see later it doesn’t feel right to blame it on the current earnings season as this looks fine. However there does seem to be increasing fears that the profit outlook is going to be more challenging  than was perhaps anticipated a few weeks back. In terms of other catalysts, the sector breakdown in the sell-off doesn’t really suggest it’s about fears of higher yields but it does suggest that it might reflect fears of a weaker global economy going forward  as defensives have outperformed cyclicals (see comment below and graphs in today’s pdf). So this is probably a good buying opportunity if you think the global economy is fine for now and that earnings will hold up. It also a good time to buy if you think that October is just a freakish month that like with Halloween attracts and magnifies scare stories if there are any about. The record after mid-terms is also positive historically. However we should all know by now that US equities are valued at one of the most expensive levels in all of history assuming you mean revert all the valuation components. Anyone wanting confirmation of this should look at our long-term study from last month (see p38 from the link here )that showed that if you mean revert everything, real returns in the S&P500 will be a very weak -5.0% p.a. over the next decade vs the century plus average of +6.7% p.a.

However markets don’t often turn because mean reversion say they should. A personal view that has driven our 2018 strategy is that with the stage we’re at of the Fed tightening cycle, with global QT now in full force and the US yield curve flattening, it is the perfect breeding ground for more volatile and difficult markets even if the cycle holds. So we continue to think volatility should remain structurally higher than the 2013-2107 calm even if the global economy likely has at least another 12 months of decent  growth ahead. The area we have got wrong this year is core European yields. We still think they are completely mis-priced but wonder whether we can be right on this going into next year if our view on regular bouts of vol continues to prove correct. Bunds seem to be a lightning conductor for any risk off. A view to resolve before our 2019 outlook is published.

This morning in Asia, markets are off to a mixed start with Nikkei (+0.41%) up while, Hang Seng (-0.07%), Shanghai Comp (-1.47%) and Kospi (-0.20%) are all down. Overnight, Japanese news daily Asahi reported, without citing anyone, that the BoJ is set to discuss measures to make trading of JGBs more active at its policy meeting to be held this week as the BoJ’s current policy is causing activity to shrink. The report also added that the BoJ will consider delaying purchases of long-term JGBs until two business days after the Ministry of Finance’s auctions and will discuss reducing the frequency of mid- and long-term bond purchases.

The reaction in 10y JGB yields has been muted with yields up +0.4bps to 0.103%. Yesterday we saw the Hesse regional election in Germany where the CDU won 27.2% – down from 38.3% five years ago. The SPD won 19.8% and the Greens 19.6%, with the SPD down from 30.7% five years ago and the Greens up from 11.1%. The far-right AfD achieved 13.2% per cent (from 4.1%) – taking it into the Hesse regional assembly for the first time as expected. This is less about the AfD for now though and more about Mrs Merkel’s future and that of her national level coalition. SPD head Andrea Nahles said as the projections came in yesterday that “the condition of the government is not acceptable,” while adding the government needs a short-term policy road map and its implementation will determine whether the coalition still is “the right place for us.” According to our German political experts’ (Boettcher & Braeuninger) piece last week, this type of result seems to put us into the scenario where Merkel might come under pressure to refrain from running again as the CDU leader at the party convention on Dec. 6-8. Among the SPD, these losses might fuel even more reservations about the Groko. Thus, Merkel’s government could become even more fragile. So at a time when Europe needs a strong Germany there is much domestic political uncertainty. Chancellor Merkel is set to address the election results today while, CDU general secretary Annegret Kramp-Karrenbauer has stated that Merkel will run again for the party leadership at the CDU national convention.

After markets closed on Friday, S&P downgraded Italy’s ratings outlook to negative, but maintained their BBB status. This was a positive surprise, as the agency could have followed Moody’s in downgrading Italy to the last notch of investment grade. We mentioned on Friday that S&P could indeed keep the rating unchanged as they didn’t previously have Italy on negative outlook and they’d only upgraded a year ago so a complete about turn was less likely. However a cut was still slightly more likely. Ahead of this BTPs traded in a somewhat wide range of 34bps on the week but ultimately out-performed notably given their risk profile in a risk off week to close -3.7bps lower as the EU and national authorities continue to negotiate on Italy’s 2019 budget plan.

Staying with Italy, Il Messaggero reported that the Italian Premier Giuseppe Conte is seeking to mediate between the Italian government coalition partners and the EU over the budget standoff and has indicated that among proposals for compromise Italy will place €17bn earmarked in the budget for the citizens income program and for reform of the pension system in a separate fund as a “standby,” and then the funds would be attributed to the relevant programs “only if the situation permits it.” In the meantime, the paper also reported that the Italian government is also working on a proposal for a possible “re-modulation” of the citizen’s income program which could bring Italy’s budget deficit down to 2.3% from 2.4%. So, lots bubbling up in the background.

Yesterday, in Brazil, far right candidate Jair Bolsonaro won the Presidential run-off election securing 55% of votes defeating the Worker’s party candidate Fernando Haddad who got 45% of votes. Brazilian assets should rally today as Jair Bolsonaro is viewed favourably by the markets. He is set to assume the office from January 1st.

Recapping last week now, and global equities ended the week on a down note, at or near their weekly lows. The S&P 500 was down -3.95% (-1.74% on Friday) and dipped back into negative YTD territory again by the end of the week. The index also dipped into ‘correction’ territory on Friday, briefly trading below -10% down from its all-time peak on September 20. This came despite a strong GDP print that showed the economy grew at an annualized pace of 3.5% qoq in the third quarter, beating expectations for 3.3%. All S&P 500 industry groups traded lower with losses led by energy (-7.06% on the week and -0.78% Friday) and financials (-5.24% on the week and -1.35% Friday). In the pdf today we show charts of the full sectoral performance in the US and Europe last week and over the course of the recent selloff since early October. In short defensives have notable outperformed cyclicals suggesting that the sell-off may be as much a fear about the global economy than anything else. Indeed a sell-off which might have started with higher yields, is not seeing a sector performance suggestive that this is now the main concern. Anyway see the link at the top of this piece for what are interesting charts.

All other major indices also traded lower, with the NASDAQ down -3.59% on the week to close in correction territory (-11.01% from its peak, and -2.34% Friday). The FANG index traded in a wide 6.53% range on the week, but actually closed only -0.11% on the week (-1.68% Friday). The DOW shed -2.97% (-1.19% Friday). In Europe, the STOXX 600 dropped -2.46% (-0.77% Friday) to its lowest level since 2016 and banks were down -4.10% (-3.40% Friday). Bourses across the continent traded lower as well, as flash PMIs printed softer-than-expected, with DAX underperforming down -3.06% (-0.94% Friday).

Sovereign bonds rallied across the globe, with 5-year Treasuries and 10-year JGBs rallying -13.4bps (-4.7bps on Friday) and -3.6bps (-0.4bps Friday) respectively on safe-haven flows, their best weeks since April 2017. Ten-year Treasuries rallied -11.3bps (-3.7bps Friday), while Gilts outperformed closing down -19.3bps (-5.8bps Friday) – their best week since immediately post-Brexit – after the FT reported that tax receipts will surprise to the upside ahead of today’s budget announcement, potentially resulting in a reduced government borrowing requirement. The dollar gained +0.62% on the week (-0.38% Friday), the euro shed -0.90% (+0.31% Friday), though the safe-haven yen was the best-performer among major currencies, up +0.65% (+0.54% Friday). Emerging markets were mixed, with the Brazilian real up +1.80% (+1.53% Friday) ahead of yesterday’s Presidential runoff election and the Turkish lira up +0.91% (+0.81% Friday) after the central bank held rates steady but signaled a willingness to act in the near future.

Earnings season is well underway now and was a huge focal point last week with some big swings on beats and especially misses. We’ve now seen 48% and 39% of S&P 500 and STOXX 600 companies report. US companies are actually outperforming in-spite of some big headline misses, with 82% of companies beating on earnings numbers and 58% beating on sales (versus recent historical averages of 73% and 57% respectively). Aggregate profits and revenues are up 23.7% and 8.8% yoy respectively, eclipsing expectations by 6.2pp and 0.8pp (the historical average is to beat expectations by around 3.4pp for profit and 0.3pp for revenues). The main issue for this US season is that some have started to bring their 2019 numbers down – albeit from still elevated growth rates. However this has certainly be blamed for part of the recent sell-off. In Europe, only 47.8% of companies have beaten expectations on earnings and 55% on sales, compared to historical averages of 50% and 54%.

It’s a busy Monday. In the UK, we get September net consumer credit, mortgage approvals, M4 money supply and October CBI retailing reported sales along with Italy’s September PPI. There is no other data release in Europe. In the US, we get September’s PCE deflator and core PCE along with September personal income and real personal spending data releases, and October Dallas Fed manufacturing activity index. Late night, we get Japan’s September jobless rate. Away from data, the Fed’s Evans will be speaking at an event and the UK’s Chancellor of the Exchequer Philip Hammond will present his budget. The WTO’s dispute settlement body is also set to consider a US request to investigate possible violations related to China’s intellectual property  policies. In addition, Mondelez and HSBC will report their earnings.

 

 

 

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 56.74 POINTS OR 2.18% //Hang Sang CLOSED UP 94.11 POINTS OR 0.38% //The Nikkei closed DOWN 34.80 OR 0.16%/ Australia’s all ordinaires CLOSED UP 0.94%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9567 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 67.33 dollars per barrel for WTI and 77.27 for Brent. Stocks in Europe OPENED GREEN //.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9567 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9576: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /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/China

3 b JAPAN AFFAIRS

 
END

3C CHINA

Late in the day, stocks and the Chinese yuan tumble on a report that the USA will announce a tariff on all Chinese imports if the Trump Xi meeting fails

(courtesy zerohedge)

Stocks, Yuan Tumble On Report US To Announce

Tariffs On All China Imports If Trump-Xi Meeting

Fails

It has been a while since the market was reminded of how quickly and violently it can be rocked as a result of Trump’s mood swings, and moments ago it got a quick refresher when Bloomberg reported that the U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if next month’s talks between presidents Donald Trump and Xi Jinping fail to ease the trade war.

As Trump had threatened previously, the latest tariff list would would apply to all imports from China that aren’t already covered by previous rounds of tariffs which would add up to $257 billion using last year’s import figures.

The latest trial balloon may also serve to remind Beijing that the Trump administration remains willing to play hard ball and is prepared to escalate the trade war with China even as companies complain about the rising costs of tariffs and financial markets continue to be nervous about the global economic fallout.

U.S. officials are preparing for such a scenario in case a planned Trump-Xi meeting yields no progress on the sidelines of a Group of 20 summit in Buenos Aires in November, according to two of the people, who declined to be identified to discuss internal deliberations. They cautioned that final decisions had not been made.

According to Bloomberg, the early-December announcement of a new product list would mean the effective date following the mandatory 60-day public comment period, would coincide with China’s Lunar New Year holiday in early February.

In previous months, the U.S. already imposed tariffs on $250 billion in trade with China. After 10% percent tariffs on $200 billion in imports that took effect in September, and are set to increase to 25% on Jan. 1, Trump also threatened to impose tariffs on the remaining goods imports from China, which last year were worth $505 billion.

“We are in the middle of a pretty nasty dispute. We’re in a trade dispute — I want to use that word because it’s a nice, soft word — but we’re going to win,” Trump said on Saturday at an event in Indiana. “You know why? ’Cause we always win.”

As Bloomberg also reports, another option considered by the White House is to exclude trade from the meeting agenda but it is unlikely to cancel it altogether.  White House Press Secretary Sarah Huckabee Sanders on Thursday said a meeting between Trump and Xi at the Nov. 30-Dec. 1 summit was still in the planning stages.

Following the Bloomberg report, stocks promptly slumped to session lows amid fears of even more trade war escalation…

… while the Yuan dropped, and is approaching the lowest level since December 2016.

 

 

-END-

4.EUROPEAN AFFAIRS

Germany/USA/Russia

 

end

UK/ROYAL BANK OF SCOTLAND

RBS sets aside 100 million pounds to cover uncertainty over Brexit.  It is the first bank to set aside moneys due to Brexit. It also missed on its earnings as the stock fell 4% on Friday.

(courtesy Reuters)

RBS sets £100 million aside to cover Brexit uncertainty

LONDON (Reuters) – Royal Bank of Scotland (RBS.L) has set an extra 100 million pounds aside to account for possible bad loans as a result of Brexit uncertainty, in the first concrete sign this is clouding the outlook of a big British bank.

The provision means RBS is concerned that its customers might become less able to pay their debts when Britain leaves the European Union in five months’ time.

While HSBC (HSBA.L) put aside $245 million (191.2 million pounds) at its half-year results to account for greater economic uncertainty, RBS is the first big UK bank to link the move to Brexit.

CEO Ross McEwan said RBS was taking into account the possibility of more negative outcomes from the Brexit negotiations, under new accounting standards that require banks to be better prepared for possible future losses.

“There’s a lot more uncertainty in the marketplace until we get agreement, and that’s what this is reflecting,” McEwan told reporters on a call, referring to the provision.

McEwan said the move did not hint at any special problem with the RBS loan books, but reflected its low impairment levels following a decade-long clean-up after its 2008 state bailout.

RBS shares fell by 4 percent on Friday, the second worst performer in the STOXX European banks index .SX7P after Ireland’s AIB Group (AIBG.I).

The fortunes of major lenders like RBS are closely intertwined with the health of UK consumers and businesses.

The bank has been less upbeat about the consequences of Brexit than some of its peers, with McEwan warning recently that Britain could slip into recession if it crashes out of the EU with no deal.

Bank of England Deputy Governor Sam Woods said on Thursday banks in Britain must hold enough cash to withstand any disorderly Brexit hitting financial markets.

RBS’s rival Lloyds (LLOY.L) said on Thursday it was confident that negotiations between London and Brussels could still deliver a withdrawal agreement, which remains elusive even after years of tense talks.

Both banks said that they had seen no sign borrowers’ ability to service their loans had deteriorated so far.

 

PROFIT MISS

McEwan said he had a phone call with Prime Minister Theresa May and executives last week and received an optimistic signal that a Brexit deal could be reached.

But with the March 2019 deadline fast approaching, businesses remain in the dark about how they will interact with EU markets and the impact Brexit will have on the UK economy.

The provision, announced with RBS’s third quarter results, took the bank’s impairments for the period to 240 million pounds, up from 143 million pounds in 2017.

The bank reported a profit of 448 million pounds for the quarter, below analysts’ expectations of 507 million pounds.

RBS reported a common equity tier one capital ratio of 16.7 percent, well above its target of 13 percent, even after it paid its first dividend in a decade and a hefty fine to U.S. authorities earlier this year.

The bank took another 200 million pound provision for mis-sold payment protection insurance – Britain’s costliest such scandal that has seen RBS alone pay out over 5 billion pounds.

It gave no clue as to its future dividend policy – information shareholders are hungry for after being starved of payouts for 10 years.

Reporting by Emma Rumney and Lawrence White; editing by Silvia Aloisi, David Evans and Alexander Smith

end

Merkel;s CDU suffers a crushing loss in Hess district: also the worst result for his coalition partner SPD

(courtesy zerohedge)

 

Merkel’s CDU Suffers Crushing Losses In Hesse

Election; Worst Result For SPD In 130 Years

Two weeks after the Christian Social Union, Merkel’s Bavarian sister party, suffered a crushing blow in the Bavaria regional election following the worst result for the ruling party since 1950, on Sunday Germany’s ruling Christian Democrats were hit with another heavy loss in elections in Sunday’s region election in Hesse, in a result that could further destabilize Angela Merkel’s grand coalition in Berlin.

Prime Minister Volker Bouffier’s CDU remained the strongest party on Sunday, but according to forecasts by German TV, the party achieved its worst result in the state in more than 50 years. The election was also a major hit for the Social Democrat party, which received its worst ever result in Hesse and saw its share of the vote fall by one-third compared to the last election in 2013.

Meanwhile, like two weeks ago, the clear winners were the left-of-centre Greens, which saw their share of the vote nearly double, while the anti-immigrant AfD continues to ride the wave of populist dissatisfaction with Germany’s political establishment. The Free Democrats (FDP) and Die Linke (Left Party) also remain in the federal state parliament in Hesse’s capital of Wiesbaden. That means that Hessen has a six-party parliament for the first time.

Here are the exit polls from Infratest dimap:

  • CDU-EPP: 28% (-10.5)
  • GRÜNE-G/EFA (Greens): 19.5% (+8.5)
  • SPD-S&D: 20% (-11.5)
  • AfD-EFDD: 12% (+8)
  • FDP-ALDE: 7.5% (+2.5)
  • LINKE-LEFT: 6.5% (+1.5)

According to projections on German TV, the CDU won 28%, down from 38.5% five years ago. The SPD won 20%, down a third or 11.5% from 2013, while the Green surged to 19.5%, up 8.5% from the last election with most young and university educated voters, or some 25% of those aged 18-29 and 29% of voters with a University degree voting for the Greens.  Based on exit polls, it was too close to call if the SPD would end up third in the regional election, with the Greens potentially set to take second spot.

The far-right Alternative for Germany (AfD) won 12% of the vote, taking it into the Hesse regional assembly for the first time, and after today’s election, the AfD will now be represented in all 16 of Germany’s regional parliaments

Europe Elects@EuropeElects

Germany (Hesse regional election), FGW exit poll:

+/-

AfD-EFDD: +8.9
GRÜNE-G/EFA: +8.9
FDP-ALDE: +2
LINKE-LEFT: +1.3
SPD-S&D: -10.7
CDU-EPP: -11.3

In the latest blow for Germany’s establishment parties, this was the worst election result for the Centre-left SPD since 1887, according to Europe Elects, disregarding Nazi time 1933-45.

The CDU currently governs the state in coalition with the Greens. Today’s result suggests this could continue, but doing so could further increase tensions between the CDU and the SPD in the German chancellor’s ruling coalition in Berlin. Both parties have seen their support slip nationally in recent months.

The election outcome is a big defeat for Volker Bouffier, Hesse’s CDU prime minister, who is a close confidante of Chancellor Merkel and has ruled Hesse for the past eight years. He had complained that the election campaign was completely overshadowed by the long-running quarrels between the coalition partners.

According to the FT, the result will be seized on by those in the SPD who believe the only way the centre-left party, one of the two parties that has dominated Germany’s post-war politics, can avoid further losses is by quitting Ms Merkel’s grand coalition.

The Hesse elections were the latest indirect regional referendum on Berlin’s policies, with campaigning in Hesse dominated by voter dissatisfaction with the government in Berlin, which has been racked by internal conflict.

The CDU has governed Hesse, Germany’s fourth most prosperous region that includes Germany’s finance capital Frankfurt, for the past 19 years, the last five of them in an unusual coalition with the Greens. But as today’s results suggest, the two parties cannot now rule alone, and will likely now try to form a three-way alliance with the pro-business Free Democrats to stay in power. The FDP has already indicated it would be prepared to form such a “Jamaica” coalition, so called because the colours of the three parties match those of the Jamaican flag.

That said, and given the roughly 10% losses each for CDU/SPD, it is hard to imagine a scenario where results don’t shake up Berlin coalition.

Parties like the unconventional AfD and the Greens have grown in national support following Germany’s 2017 general election, as support for the major centre parties has waned. And with the CDU’s party conference scheduled for December, Merkel could lose her leadership re-election bid. Merkel has said previously she could not continue as chancellor were she to lose that role.

The recent losses have provided more ammunition for critics in Merkel’s party who want to get rid of Merkel, but as BBC’s Jenny Hill notes, “she may face a more immediate problem” – her Social Democrat coalition partners are in electoral freefall, haemorrhaging support at federal level. The SPD’s poor performance tonight in Hesse follows a drubbing in Bavaria two weeks ago. And since many in the party blame the controversial coalition with Merkel’s conservatives, the SPD’s leaders may decide to pull out of the alliance and bring down her fragile government.

Germans are calling this a ‘schicksalswahl’, or vote of destiny. It may yet seal the fate of this country’s government – and perhaps even its leader.

end

The junior SPD party gives Merkel an ultimatum after a devastating loss in Hess.  She reiterates that the “state of the Government is unacceptable”

(courtesy zero hedge)

“The State Of The Government Is Unacceptable”:

German SPD Leader Gives Merkel An Ultimatum

After Devastating Loss

Angela Merkel’s junior coalition partners gave her conservatives until next year to deliver more policy results, threatening to end their alliance if there is no improvement after both parties suffered another round of crushing losses in today’s regional election in Hesse.

As reported earlier, Merkel’s conservative Christian Democrats (CDU) came home first in the election in the western state of Hesse, but took just 27.2% of the vote, a huge drop from the 38.3% the CDU won at the last Hesse election, in 2013 according to projections by German broadcaster ZDF. Meanwhile, Merkel’s center-left coalition partner Social Democrats (SPD) fared even worse, winning just 19.6% of the vote, down from 30.7% and its worst result in the western state in history. The party was on a par with the Greens, also on 19.6%.

After the disastrous results, SPD leader Andrea Nahles said she would use a “roadmap” with which to measure the progress of the ruling coalition, which has been plagued by infighting, at a mid-term review next year according to Reuters.

“We could then gauge the implementation of this roadmap at the agreed mid-term review, when we would be able to clearly see if this government is the right place for us,” Nahles told reporters. “The state of the government is unacceptable.”

Her ultimatum to the embattled Chancellor was clear: the SPD needs to show tangible results to its supporters next year or else the party’s leaders will pull out of the coalition with Merkel, resulting in a government crisis in Europe’s largest economy.

German Social Democratic Party (SPD) leader Andrea NahlesMerkel’s ruling coalition “has lost the confidence of the electorate”, said Josef Joffe, publisher-editor of weekly Die Zeit. He also slammed the SPD, saying “a party on the way down cannot suddenly rise from the ashes by going into the opposition. So the party grandees will clench their teeth, stay in the coalition and wait for a better day.”

Meanwhile, the incumbent CDU state premier in Hesse, Volker Bouffier and a Merkel ally, said his party had achieved its goal of being able to lead the next government in Hesse, but added: “We are in pain because of the losses”.

“The message to the parties ruling in Berlin is: People want fewer disputes and more focus on the important issues,” he said.

Shockingly, unlike various US politicians, he did not blame the Russians for the dramatic losses.

Today’s latest loss will have international implications well: the CDU’s poor result in Hesse, after its sister party in the state of Bavaria, the CSU, suffered its worst result there since 1950 two weeks ago, will “turbo-charge a debate about who succeeds Merkel and when.”  Merkel’s weakness at home may limit her capacity to lead in the European Union at a time when the bloc is dealing with Brexit, a budget crisis in Italy and the prospect of populist parties making gains at European parliament elections next May.

While the CDU and the SPD suffered, the Greens and the AfD were delighted with another impressive result: the Greens strong performance in Hesse means Bouffier will likely be able to remain state premier at the helm of a CDU/Greens government. The other big winner was the far-right Alternative for Germany (AfD), which entered the Hesse regional assembly for the first time with 12.8% of the vote. As we reported earlier, the result also means the anti-immigration party, which entered the federal parliament for the first time last year, will now be represented in all 16 German regional assemblies.

* * *

While Merkel’s fourth – and surely final – government has already come close to collapsing twice, Nahles’ comments show the SPD will put more pressure on the conservatives to deliver policy results for the center-left party. Recall that Merkel’s CDU only formed a bitter national partnership with the SPD in March after the collapse of talks on a three-way coalition of the conservatives, Greens and pro-business FDP. The alternative would have been a government crisis.

Merkel’s historic collapse is the result of popular outcry to her disastrous “open door” policies: according to the ARD exit poll, only 13% of CDU voters believed Merkel had helped the party in Hesse, down from 70% at the last state election, which according to Reuters reflects “voter anger at her decision in 2015 to welcome almost one million, mainly Muslim asylum seekers.”

Next on Germany’s political agenda is the CDU’s annual congress in December, when Merkel will seek re-election as party chairwoman. While she is still expected to be reappointed, a weak show of support for her would undermine her authority and accelerate the succession debate. Merkel has said previously she could not continue as chancellor were she to lose that role.

end

Merkel steps down as CDU leader but she is still Chancellor

(courtesy zero hedge)

Merkel To Step Down As CDU Leader In Dramatic

Move

Angela Merkel will not seek re-election as chair of Germany’s ruling CDU party, effectively standing down as leader of the Christian Democratic Union, a post she has held for 18 years, after a disastrous performance by her party in regional elections in the German state of Hesse on Sunday badly dented her authority, and followed an ultimatum by her junior coalition partner, the SPD which also suffered a devastating loss in latest elections.

According to Spiegel and Bild, Merkel, who has chaired the Christian Democratic Union (CDU) since 2000, was expected to compete again at the party congress in Hamburg in early December. however in what many are calling “the end of an era” during which her command of Germany put its stamp on Europe and beyond for more than a decade, on Monday morning she told senior party executives that she would not stand again.

Merkel is scheduled to speak to the media at 1 p.m. local time on Berlin.

The Chancellor will reportedly retire after the end of her current term in 2021, which will give the CDU time to groom a successor. Though she remains one of Germany’s most popular politicians, her fellow Christian Democrats have long been demanding that she clear a path for her successor. After leaving German politics, Merkel has reportedly said she won’t consider any EU-wide posts.

As we reported on Sunday, the CDU won the election in Hesse, but its share of the vote fell by more than 11 points, while the junior partner in her governing grand coalition, the Social Democrats, also slumped. The party’s poor showing reignited calls for the SPD to quit the government.

While Merkel can assume she’ll have the support to remain chancellor, “she’s broken the game for her succession wide open” according to Bloomberg, although doing it in a dramatic fashion, a surprise, as she has here, may help throw her competitors off balance. That would help her hand-picked successor, CDU General Secretary Annegret Kramp-Karrenbauer. But others are waiting in the wings. Bild reports that Friedrich Merz, her main antagonist in the first years after she took over the CDU in 2000, has thrown his hat in the ring.

Other possible contenders include Health Minister Jens Spahn, who has publicly criticized her open-doors refugee policy and is championed by the CDU’s social conservatives and Ralph Brinkhaus, a fiscal hawk who unexpectedly ousted Merkel’s longtime parliamentary caucus leader. Others include two state premiers Armin Laschet and Daniel Guenther, who carry weight after recently leading the CDU to victory in regional elections.

However, as Bloomberg notes, the potential for change in Germany is hemmed in by the country’s constitution and relatively strong political center.

“Even if Merkel were to be replaced and/or if a new government were to take power in Berlin, with or without new elections, it would not make a major difference once the dust has settled,” Holger Schmieding, chief economist at Berenberg, said in a note. “Any conceivable coalition in Berlin would still be dominated by the mainstream parties CDU/CSU, SPD, Greens and the smaller Liberals.”

The repercussions of her decision will resonate far and wide, not least in the U.K., where Brexit is the all-consuming topic. As Bloomberg notes, there might be dismay at the prospect of someone so influential disappearing from the scene.

She has the ability to tip the scales and she has taken a more conciliatory approach than say, France’s Macron. But if Merkel does stay on as chancellor, could this free her up to throw some caution to the wind and steer the ship safely without having to worry about burning political capital?

The news sent the Euro sliding to session lows, down as much as 0.3% to 1.1360 before staging a modest rebound. Meanwhile, Germany’s DAX30 has extended gains to more than 1% since the first media reports of Merkel not seeking to continue as CDU leader, largely on the back of the weaker euro.

end

Germany and France just did an about face and turned towards Russia and thus breaking the USA boycott of Syria

Germany needs Russia’s gas and so does France

 

(courtesy zerohedge)

 

 

Germany And France Just Broke The US Boycott

Of Syria

There weren’t exactly any breakthroughs at the four-way summit involving France, Germany, Russia, and host Turkey in Istanbul on Saturday, but the event itself was a significant victory for one side in terms of optics.

Says Syria expert Joshua Landis: “The real importance of France and Germany going to Turkey to meet Putin and Erdogan is that they are effectively hiving off from the US by joining the Astana process.” Ultimately, according Professor Landis:

They are breaking the boycott of Syria, while preserving the “need for elections” talking point.

Alas, as the photo op of summit participants suggests, the United States has indeed effectively been cut out of the Russia and UN-brokered Astana processto bring Syria’s war to a close— which has both set the terms for the current shaky Idlib ceasefire agreement, and brought Turkey and Russia into an orbit of cooperation to seek long-term peace and stability. Notably Germany’s Merkel and France’s Macron now see the Russia-Turkey deal on Idlib as the only workable track that could stave off another mass refugee and jihadi influx into Europe, already reeling from a years-long migrant crisis.

And President Putin, sitting beside his European counterparts, still affirmed that Russia is in the driver’s seat since its 2015 intervention in the war at the request of Damascus. Putin vowed during the summit: “Should radicals… launch armed provocations from the Idlib zone, Russia reserves the right to give active assistance to the Syrian government in liquidating this source of terrorist threat.

Image via Global Look Press * * *

But after years of calling for and at times directly assisting the West’s regime change efforts in Syria, what is the real importance of France and Germany going to Turkey for talks?

The below is authored by Professor Joshua Landis of Syria Comment

The real importance of France and Germany going to Turkey to meet Putin and Erdogan is that they are effectively hiving off from the US by joining the Astana process. They are breaking the boycott of Syria, while preserving the “need for elections” talking point.

We may safely conclude that Assad will not permit any “political process” or constitutional committee to dislodge him or bring members of the opposition to power in Damascus. He has won the war.

Europe is frightened for its security. It does not want the refugee situation nor the Jihadi situation in Europe to be made worse by an Idlib invasion. This is why Europe is in Istanbul. As Macron said, the Idlib deal must be sustained.

Russia has reiterated that the Idlib deal is temporary. The jihadists must be killed or arrested. But Russia wants the EU to engage and commit to reconstruction aid for Syria, which can help refugees return.

Europe is angry at the U.S. for unilaterally scuttling the Iran deal and possibly crushing the Iranian economy, which could further destabilize the region and lead to an even greater refugee flow toward Europe. The US policy is very bad for Europe.

Turkey, Syria, Iran and Russia want to drive the US out of North Syria and end its alliance with the YPG.

There are many competing agendas among the different sides in Istanbul, but this is an important step forward, breaking with America’s stated goal of boycotting Syria so long as Assad remains in power.

It is a logical step forward after many Gulf countries, such as Bahrain and Kuwait, took measures to recognize the present reality of the Assad victory and work toward the normalization of relations between their countries.

Joshua Landis

@joshua_landis

It is a logical step forward after many Gulf countries, such as Bahrain and Kuwait, took measures to recognize the present reality of the Assad victory and work toward the normalization of relations between their countries.

* * *

Below is a quick summary of agreed upon points issued in a communique by Turkey’s President Recep Tayyip Erdogan, Russia’s Vladimir Putin, France’s Emmanuel Macron and German Chancellor Angela Merkel at the conclusion of this weekend’s Istanbul summit, via RT News:

Only political solution for Syria: The leaders have “expressed their support for an inclusive, Syrian-led and Syrian-owned political process that is facilitated by the United Nations.”

Need to start work on constitution in Geneva: A committee tasked with drafting a new constitution for Syria should begin its work as soon as possible, preferably before the end of this year.

No to division of Syria: Syria must continue to exist within its pre-war borders. Any separatist movements or desires of foreign powers to occupy parts of the country are therefore firmly rejected.

Keep ceasefire & defeat terrorists: The four countries have expressed their support for the Idlib ceasefire deal, brokered earlier by Russia and Turkey. At the same time, they emphasized the importance of fighting terrorism and condemned the use of chemical weapons.

Boost humanitarian aid: The United Nations and other international organizations should bolster aid deliveries to the war-torn country. “Swift, safe and unhindered” flow of humanitarian aid will provide much-needed relief to the sufferings of the Syrian people.

Help return of refugees: The four leaders stressed the importance of “safe and voluntary” return of refugees to Syria. To facilitate the process, appropriate housing and social care facilities must be constructed in the country.

Internationally observed elections: The ultimate goal of the political settlement process is holding transparent, internationally observed elections, the statement reads. All Syrians, including those who had to flee the country, must be able to participate.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

SAUDI ARABIA/USA/TURKEY
Saudi Arabia refuses Turkey’s request to hand over the suspected 15 Khashoggi killers
(courtesy zerohedge)

Saudi Arabia Refuses Turkey’s Request To Hand

Over Suspected Khashoggi Killers

After several weeks of coyly insisting that the Turkish investigation into Jamal Khashoggi’s murder would proceed carefully and fairly – and that Turkish authorities would withhold judgment until all the facts had been gathered, even as they actively undermined the Saudis with a stream of damaging leaks – Turkish President Recep Tayyip Erdogan is finally turning the screws on the Saudis and, specifically, the kingdom’s young de facto ruler, Crown Prince Mohammad bin Salman.

Earlier this week, Erdogan demanded in a speech that the Saudis share the whereabouts of Khashoggi’s remains, a request that was met with more of the bumbling stonewalling that has characterized the Saudi response to the scandal. Later, the Turkish head prosecutor officially requested that Saudi Arabia turn over the 18 Saudi nationals arrested by the Kingdom so that Turkey can charge them with “premeditated killing executed with fiendish sentiments or by causing torment,” according to Turkey’s Anadolu agency. All the while, Erdogan has maintained his facade of neutrality, once again cautioning that “there was no need to be hasty” about Turkey’s unveiling of the facts in the case. Even Mohammad bin Salman has praised Erdogan, insisting during his first public remarks since the killing that the relationship between Turkey and Saudi remained unassailable, despite rumor of a growing rift between the two leaders.

jubeir

Saudi Foreign Minister Adel al-Jubeir

But as the Saudis dig in after changing their story once again to suggest that Khashoggi’s killing may have been premeditated (with the plot presumably organized and executed by the 15-member hit squad and their handlers, without the involvement or knowledge of the Crown Prince), the kingdom’s Foreign Minister Adel al-Jubeir lashed out at “Western hysteria” during a conference in Bahrain and insisted that Saudi would not turn over the suspects, and that they would be prosecuted in Saudi Arabia, according to the BBC.

“On the issue of extradition, the individuals are Saudi nationals. They’re detained in Saudi Arabia, and the investigation is in Saudi Arabia, and they will be prosecuted in Saudi Arabia,” Mr Jubeir told a security conference in Bahrain.

When it comes to the patsies suspects, Saudi Arabia can do whatever it wants. There is no extradition treaty between Turkey and Saudi Arabia, and the bilateral relationship between the two has unraveled in recent years, particularly after Turkey expressed solidarity with Qatar during last year’s GCC crisis, reportedly drawing the ire of the Crown Prince. However, by refusing to turn them over, the kingdom is doing exactly what Erdogan wants: giving him even more ammunition to undermine Saudi credibility and cast aspersions about the Crown Prince and his involvement while maintaining his measured public facade.

This approach has yielded amazing results for Erdogan so far. After initially expressing its categorical support for the Saudis, the US has backed away from that stance and is instead demanding that Saudi Arabia provide a more complete explanation, even leaving open the possibility that senior officials – possibly including the Crown Prince – might need to answer for the killing. Erdogan’s reported conversations with King Salman suggest that he is quietly lobbying for the royal family to do more to rein in the Crown Prince’s power, as MbS’s war in Yemen has created problems for Turkey on multiple fronts. If the Crown Prince can be hamstrung, or even removed, Erdogan would only stand to benefit. Meanwhile, it could disrupt the US relationship with Saudi and possibly force the Trump administration to reluctantly embrace closer ties with Turkey – allowing Erdogan to kill two birds with one stone.

IRAN
The poor Iranian that hoarded Iranian gold coins will no doubt receive a death sentence for ‘rigging”
(courtesy zerohedge)

Iran Unleashes Death Sentence To “Sultan Of

Coins” For Rigging FX Markets

While most market watchers have grown numb to the headlines about various western bankers and traders rigging markets (from Libor to precious metals to FX), who receive wrist-slaps and sternly-worded emails for their misdeeds; things are a little more serious in Iran…

One day after US authorities acquitted a “cartel” of currency riggers, accused of manipulating FX markets against clients in a multi-billion-dollar, multi-year scam; Radio Free Europe reports that Iran’s Supreme Court has upheld death sentences given to two financial traders convicted of illegal currency trading and “disrupting the economy.”

With Washington waging all-out financial warfare against Iran, forcing its currency to collapse…

As RFERL.org reports, Iranian authorities on October 22 identified the two men as Vahid Mazloumin and Mohammad Esmail Ghasemi, whom local media dubbed the “Sultan of Coins” after he was arrested and found hoarding two tons of gold coins that he allegedly used to manipulate the Iranian currency.

Many Iranians have stocked up on gold coins and other safe haven investments as the rial has plummeted this year to record lows against the U.S. dollar.

While most Wall Street analysts attribute the currency’s fall mostly to the pressure from U.S. sanctions, which Washington started reimposing in August, the government has responded to the economic crisis by blaming local currency traders for the rial’s fall and setting up special courts to try them for alleged capital crimes.

The two men sentenced to death first went on trial on September 8 over charges of “disrupting the economy” through the creation of a network trading in illegal currency and gold coins, Iranian media reported.

Judiciary spokesman Gholamhossein Mohseni Ejehi said the swift conclusion of their cases before the Iranian Supreme Court serves as a “warning to opportunists” who aim to “disrupt the economy” during the time of the “enemy’s pressure” on Iran — in an apparent reference to the economic sanctions that the United States is reimposing since withdrawing from Iran’s nuclear agreement in April.

Authorities are clearly making an example of the two currency traders who were sentenced to death were convicted of “spreading corruption on earth,” a term used for crimes punishable by death in the Islamic Republic.

RFERL notes that a third person, Hamid Bagheri-Dermani, was also accused of corruption and sentenced to death in preliminary hearings. His case is still up for appeal before the Supreme Court.

So, the lesson of the day is simple – if you want to manipulate markets for your own good, move to the land of the free (from consequences)… and ‘suck it up buttercup’ if you’re hard-earned fiat currency collapses into worthless paper.

6. GLOBAL ISSUES

 

end

7  OIL ISSUES

 

 

end

8. EMERGING MARKETS

ARGENTINA

We wonder how long will this last:  IMF ups its bailout loan to Argentina for $56.3 billion

read the summary below for implications.  The citizens are very unhappy that he went to the IMF

(courtesy zerohedge)

 

IMF Approves Upsized $56.3BN Bailout Loan For Argentina: Here Are The Implications

On Friday, the IMF Executive Board completed its first review of the Argentine 3-year Stand-By Arrangement (SBA). As a result, the revised SBA was upsized to $56.3 billion (SDR40.71BN), up from $50bn under the original program of which $15bn were disbursed in June. With the approval, the IMF will disburse $5.7bn (SDR 4.1bn) immediately, and likely another $7.7bn before the end of the year.

As reported before, the revised SBA augments and frontloads the access to IMF funding: compared with the original SBA access to IMF funding was increased by $19 billion through the end of 2019, to $36.2bn total (up from $17.5bn in the original June SBA). Specifically, US$13.4bn will be disbursed during the remainder of 2018 (on top of $15bn disbursed in June), and another $22.8bn in 2019 (≈$5.7bn/quarter). Finally, $5.9 billion are planned for 2020-21

Furthermore, Goldman notes that the IMF program would no longer be treated as precautionary and the authorities intend to use IMF funds for budget support.

On fiscal policy the new program envisages a zero primary fiscal balance in 2019 and primary surpluses starting in 2020 (although in a curious concession by the IMF, the press release does not mention the 1% of GDP surplus for 2020 that the authorities announced a month ago).

Under the new program, the main innovations relate to monetary and FX policy: in order to “decisively reduce inflation” and inflation expectations the Central Bank will shift toward a “stronger, simpler, and more verifiable monetary policy regime, temporarily replacing the inflation targeting regime with a monetary base target”. The monetary authority will now target zero nominal growth of the monetary base from now until June 2019 (the targets for December and June will be adjusted for seasonal factors given the usual pick up in money demand in those months).

According to Goldman’s Alberto Ramos, the new program restrains activism in the FX market. The IMF press release states that “in the event of extreme overshooting of the exchange rate, the BCRA may conduct limited intervention in foreign exchange markets to prevent disorderly market conditions. Such intervention would be unsterilized.”

FX policy will now have a clear rules-based framework: as long as the ARS/USD trades within pre-set moving bands there will be no FX market intervention (which the authorities label the no-intervention zone). Starting October 1, the central bank set the ARS/USD lower-limit at 34 and the upper-limit at 44; the limits will be increased daily at a 3% monthly rate until the end of the year. If the currency starts to trade above the upper-limit the central bank would automatically sell up to US$150mn/daily (a non-sterilized intervention which would imply a contraction of the monetary base).

This is in essence is a rules-based mechanism for intervention. If the currency trades below the lower-limit the central bank may (not automatic) buy Dollars into reserves. Key here is that the central bank will not defend the ARS/USD bands. There is no hard commitment to keep the ARS/USD trading within the band. In fact, the new framework is simply a trigger for reserve sales: US$150mn/daily if ARS exceeds the upper-limit of the band. It is possible for the ARS to remain above the upper-limit for a prolonged period of time with the central bank simultaneously selling (non-sterilized) US$150mn for days in a row.

As previously indicated by the central bank, the base money target will be enforced through daily open market operations with 7-day Leliq central bank bills (exclusively with banks) and also through adjustments in reserve requirements. In our assessment this will imply a severe liquidity squeeze and monetary contraction in real terms with clear implications for activity. Finally, the new money-supply based monetary framework has been supplemented by a commitment not to allow “short-term rates to fall below 60 percent until 12-month inflation expectations decisively fall for at least two consecutive months.” As a reminder, the 7-day Leliq rate is currently tracking at around 72%. Since the money supply is now exogenous the Leliq rate will be endogenous and will fluctuate according to variations in money demand.

Bottom-Line: Argentina was compelled by market circumstances to forgo the previous strategy of gradual fiscal adjustment; and in the process lost valuable degrees of autonomy to manage and steer the adjustment. The authorities responded to rising market pressure decisively and in the classical way (higher rates and tighter fiscal policy) and a significant risk premium has been built into most Argentine financial assets.

The availability of US$36.2bn in IMF funds through end-2019 (conditional on successful program implementation and IMF Executive Board program review approvals) plus close to US$7bn (≈US$4.5bn net) in ex-IMF multilateral funding should allow the authorities to meet the Oct-18 through Dec-19 fiscal funding needs even under conservative partial debt-amortization roll-over assumptions.

Meanwhile, the economy is set for a major hit: Since the inception of the new monetary regime, short-term 7-day Leliq rates have been tracking consistently above 70%, and the ARS has traded on the strong side (trending towards the lower-limit of the no-intervention band). Inflation accelerated significantly in September (6.5% in the month with the annual rate surging to 40.5%) and inflation expectations have deteriorated further. Real activity data has been weak but the brunt of the sharp tightening of financial conditions on activity has yet to be felt. In all, Goldman summarizes that “the economy is traveling along a very volatile macro-financial path, with significant economic and social/political risks.”

Ultimately, the most immediate risk is that for the political career of president Mauricio Macri, which may be cut short in 2019 if the public response to the yet another IMF program is adverse (as discussed in Argentina’s Catch 22: Why Doing The Right Thing Will Cost Macri The 2019 Election).

Argentina President Mauricio MacriMacri’s standing in the polls has dropped to all-time lows, with support for him falling to 31% in early September as Argentina fell into its second recession in three years.  Every step that Macri has taken to shore up the economy has made him less popular and has given ammunition to his political opponents. Turning to the IMF for help has been seen as an especially unpopular move because many local believe that the country’s last sovereign default was caused by the IMF. It’s truly a lose/lose situation for Macri that has been reflected in his approval rating.

Overall, the challenge for the authorities is to stay the course and deliver unwaveringly on the fiscal commitments.

 

 

 

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

Euro/USA 1.1409 UP .0011 REACTING TO MERKEL’S FAILED COALITION/ 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

 

 

 

 

 

USA/JAPAN YEN 112.24  UP 0.373  (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL

GBP/USA 1.2846 UP   0.0031  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3086  DOWN .0009 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 MONDAY morning in Europe, the Euro ROSE by 11 basis point, trading now ABOVE the important 1.08 level RISING to 1.1409; / Last night Shanghai composite CLOSED DOWN 56.74 POINTS OR 2.18%

 

//Hang Sang CLOSED UP 94.11 POINTS OR 0.38% 

 

 

/AUSTRALIA CLOSED UP  0.94% / EUROPEAN BOURSES ALL GREEN 

 

 

 

The NIKKEI: this MONDAY morning CLOSED DOWN 34.80 POINTS OR 0.16%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED  GREEN 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 94.11 POINTS OR 0.38% 

 

 

/SHANGHAI CLOSED DOWN 56.74 POINTS OR 2.18%

 

 

 

Australia BOURSE CLOSED UP 0.94%

Nikkei (Japan) CLOSED DOWN 34.80 POINTS OR 0.16%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1230.00

silver:$14.67

Early MONDAY morning USA 10 year bond yield: 3.10% !!! UP 2 IN POINTS from FRIDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.33 UP 2  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 96.40 UP 4  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing MONDAY NUMBERS \4: 00 PM

 

Portuguese 10 year bond yield: 1.87% DOWN 3    in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.11%  DOWN 0  BASIS POINTS from FRIDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…DANGEROUS!!

SPANISH 10 YR BOND YIELD: 1.54% DOWN 3 IN basis point yield from FRIDAY

ITALIAN 10 YR BOND YIELD: 3.30 DOWN 15   POINTS in basis point yield from FRIDAY/

 

 

the Italian 10 yr bond yield is trading 176 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.38%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1389 DOWN .0009 or 9 basis points

 

 

USA/Japan: 112.50 UP .622 OR 62 basis points/

Great Britain/USA 1.2806 DOWN .0009( POUND DOWN 9 BASIS POINTS)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was FELL BY 9 BASIS POINTS  to trade at 1.1389

The Yen FELL to 112.50 for a LOSS of 62 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND LOST 9 basis points, trading at 1.2806/

The Canadian dollar LOST 35 basis points to 1.3130

 

 

The USA/Yuan,CNY closed DOWN AT 6.9622-  ON SHORE  (YUAN down)

THE USA/YUAN OFFSHORE:  6.9660(  YUAN down)

TURKISH LIRA:  5.5794

the 10 yr Japanese bond yield closed at +.11%

 

 

 

Your closing 10 yr USA bond yield UP 2 IN basis points from FRIDAY at 3.10 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.34 UP 3 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, 96.51 UP 51 CENT(S) ON THE DAY/1.00 PM/

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 4:00 PM 

London: CLOSED UP 122.20 POINTS OR 1.76%

German Dax : CLOSED UP 208,87 POINTS  OR 1.79%
Paris Cac CLOSED UP 48,42 POINTS OR 0.97%
Spain IBEX CLOSED  UP 134.20 POINTS OR 1.54%

Italian MIB: CLOSED UP:  463.70 POINTS OR 2.45%/

 

 

WTI Oil price; 67.28 1:00 pm;

Brent Oil: 77.47 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.67  THE CROSS LOWER BY .09 ROUBLES/DOLLAR (ROUBLE LOWER by 9 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.5794 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.38 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:66.45

 

BRENT:76/74

USA 10 YR BOND YIELD: 3.08%..

 

USA 30 YR BOND YIELD: 3.33%/..

 

EURO/USA DOLLAR CROSS: 1.1385 ( DOWN 12 BASIS POINTS)

USA/JAPANESE YEN:112.36 UP ,480 (YEN DOWN 48 BASIS POINTS/ .

 

USA DOLLAR INDEX: 96.59 UP 24 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2802 DOWN 14 POINTS FROM YESTERDAY

the Turkish lira close: 5.5698

the Russian rouble:  65.83 DOWN 0.23 Roubles against the uSA dollar.( DOWN 23 BASIS POINTS)

 

Canadian dollar: 1.3135 DOWN 11 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9622  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9728 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.38%

 

The Dow closed  DOWN  242.81 POINTS OR 0.98%

NASDAQ closed DOWN 116.92  points or 1.63% 4.00 PM EST


VOLATILITY INDEX:  27.33  CLOSED down  0.98

LIBOR 3 MONTH DURATION: 2.521%  .LIBOR  RATES ARE RISING/BIG jump today

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

TRADING IN GRAPH FORM FOR THE DAY

 

Beijing, Brazil, Bitcoin, Bonds, & Bullion Drop As

FANG Bloodbath Batters Stocks

Slow motion trainwreck…

No National Team last night in China…

N..

 

 

European stocks ramped at the open (extending the little bounce at the China close) then drifted lower as EU closed (which then plunged in US markets)…

 

After a ‘strong’ open, everything collapsed after US-China trade headlines (but FANGs were down hard before that reportedly on EU Digital Tax headlines)…BTFD algos steeped in into the close…

 

But US futures show the excitement better as they ramped to Friday’s highs ahead of the open…ran the stops, then collapsed…

 

The Dow and S&P fell back into the red YTD and Nasdaq is now only up 1.4% YTD…

From their highs, all major US equity indices are in correction:

  • Dow -10.1%
  • S&P -10.8%
  • Nasdaq Composite -14.4%
  • Dow Transports -15.5%
  • Russell 2000 -15.5%

All below critical trendlines and 200DMA…

 

Dow futures fell 900 points from their highs!

 

One look at TICK data and it’s clear the 2pm Panic is here…

 

But there was a massive sell program towards the close…

 

VIX spiked above 25 and the VIX term structure is inverted for the 16th day in a row…

 

VIX Futures are above 20 all the way out to June 2019… The following chart shows the evolution of the VIX term structure from the start of the month to the end…

 

FANG stocks were hammered today, puking to six-month lows…down 24% from highs

Led by AMZN and NFLX who crashed over 7% as the UK Digital Tax was blamed (but it seemed a lot more systemic than that)…

All FANGs are now in a bear market:

  • FB -35.5%
  • AMZN -25.9%
  • NFLX -33.3%
  • GOOGL -20.3%

Semis were also hammered – now down 22.5% from their highs to 13-month lows…

 

High Yield credit is starting to crack…

 

Treasury yields ended marginally higher after a big overnight sell-off saw a bid return as stocks got slammed in the afternoon…

 

And Treasury vol spiked to near 8-month highs…

 

The Dollar Index spiked all the way to Friday’s highs then chopped around…

 

The Brazilian Real surged at the open after Bolsonaro’s win and relief that the socialists lost, but that was quickly unwound as the currency collapsed 12 handles from high to low…

 

Offshore Yuan tumbled – despite a stronger Yuan fix – extending losses after US-Chin atrde war headlines – to its lowest close since Dec 2016…

 

Cryptos tumbled on the day, not helped by a double whammy from the UK with a Digital Services Tax and FCA confirming talk of UK banning the retail sale of crypto derivatives…

 

Dollar strength weighed on the broad commodity space with Silver getting hit hardest

 

Silver’s drop was significant breaking below its 50DMA with a sizable drop…

 

One chart fascinated us today, via Bloomberg’s Richard Jones, the S&P earnings yield premium to 10Y Treasuries has been somewhat glued to the Fed Funds rate for the last few months…

 

Finally, it appears hedge funds were anything but ‘hedged’ in October…

END

 

market trading

 

 

market data/

Hard data:  personal income, personal spending growth tumble with this latest September read.  Savings rate continues to slump.

(courtesy zerohedge)

Personal Income, Spending Growth Tumbles In

September As Savings Rate Slumps

Following August’s spending and income growth slowdown, September saw MoM growth in spending and income slow with income missing expectations notably.

  • Personal Income rose just 0.2% MoM (versus 0.4% revised higher for August and expectations of a 0.4% rise)
  • Personal Spending rose 0.4% MoM (versus 0.5% revised higher for August and expectations of a 0.4% rise).

So both shopwed slowing growth MoM…

 

Year over year spending growth is at its slowest since May, and income growth at its slowest since March…

Government workers wages grew slightly faster YoY (+2.4%) as Private worker wage growth slipped lower to +5.0% YoY…

 

This sent the savings rate down to its lowest since Dec 2017…

A slumping savings rate and slumping spending smells like the consumer is at their limit.

end
I promised you that the true USA deficit was 1.2 trillion ending Sept 30/2018.  It seems that the USA will need to borrow over 1.3 trillion dollars this coming year. And this does not include the 600 billion dollars in roll off Fed money that treasury must pay back the Fed.
total amount needed to borrow: 1.9 trillion (you will recall my figures were 1.8 trillion so i am off a bit.  The reason is student loans plus other off the books deficits.
(courtesy zerohedge)

America’s True Deficit: US To Borrow Over $1.3

Trillion In 2018

Confirming recently reduced estimates of US debt borrowing needs – mostly as a result of new funds brought in via Trump’s trade tariffs – the Treasury Department today lowered its estimates of fourth-quarter borrowings to $425 billion from the $440 billion forecast it made in July, while assuming an end-of-December cash balance of $410 billion, up from $390 billion 4 months ago.

The revised Treasury numbers bring the total net borrowing needs for calendar 2018 at $1.338 trillion, while borrowings for fiscal year 2018 (which ended on Sept. 30) amounted to just under $1.2 trillion.

The Treasury also released its first estimate of borrowing needs for the January – March 2019 quarter, which it expects to hit $356 billion, well below the $488 billion borrowed in the same quarter of 2018, while assuming an end-of-March cash balance of $320 billion.

Meanwhile, during the July – September 2018 quarter, the last of fiscal 2018, the Treasury borrowed $353 billion in net debt, up from the $329 billion it had estimated in July and ended the quarter with a cash balance of $385 billion, which was also higher than the $350 billion forecast previously. The increase in borrowing resulted from the higher end-of-quarter cash balance partially offset by higher net cash flows.

So why did the US borrow $1.2 trillion in Fiscal 2018 even though the official budget deficit was reported to be $779 billion for the same period? That is mostly due to “off budget” items that Congress thinks shouldn’t be part of the normal budgetary process. It includes things like Social Security and Medicare, which vary from year to year, and can be anywhere from $200 billion to almost $500 billion.

Of course, since the US Treasury ultimately ends up borrowing those dollars as the table above shows, the true deficit that adds to the debt is actually about 50% higher than the number discussed by the media.

Oh, and finally, over 40% of the on-budget deficit went simply to pay $325 billion in interest on previously-issued debt. This number is set to explode higher in the coming years.

 

USA economic/general stories
The left now blame Trump for the horrific anti-Semitic Pittsburgh Pennsylvania synagogue massacre.
(courtesy zerohedge)

Trump Allies Go To Bat As Critics Slam President For Synagogue Shooting

President Trump’s allies are vigorously pushing back against critics attempting to link his rhetoric to a rise of violence in the United States in the aftermath of Saturday’s mass murder at a Pittsburgh synagogue, and a spate of attempted pipe bombings, reports Bloomberg.

“Our president has the largest microphone, he has the largest bullhorn,” said President Obama’s homeland security chief, Jeh Johnson on ABC’s “This Week” on Sunday. “This particular president has a particularly large voice and a large microphone, and Americans should demand that their leaders insist on change, a more civil discourse and a more civil environment generally.”

This Week

@ThisWeekABC

Jeh Johnson says the shooting at the Pittsburgh synagogue and the attempted bombings “should be a wake up call to all Americans to demand change.”

“We live now in a very, very toxic environment that includes an incivility in our political discourse” https://abcn.ws/2D81N1V 

Others were less diplomatic, such as GQ‘s Julia Ioffe and Newsweek‘s Nina Burleigh and others:

Julia Ioffe

@juliaioffe

And a word to my fellow American Jews: This president makes this possible. Here. Where you live. I hope the embassy move over there, where you don’t live was worth it.

Nina Burleigh

@ninaburleigh

Thread. In case you’re forgetting the sequence of dangerous Trump rhetoric, which is easy to do now.

Walter Shaub

@waltshaub

This week Trump smeared “globalists,” code for Jews in the Breitbart and Daily Caller world of nazis and white supremacists. Last year he said “fine people” rioted with nazis in Charlottesville. Murderous bigotry isn’t new, but there’s no disputing Trump’s role in emboldening it.

Allison Winn Scotch

@aswinn

Writers often say that if their work impacts even one person, then it’s worth it. To deny that the GOP/Trump rhetoric hasn’t led to the hate-fueled environment is to deny how messaging works. It needs only to impact 1 person. And it has impacted many more. Cc: @SteveSchmidtSES

We must have missed their condemnation of the more than 600 acts of violence against Trump supporters, while Hillary ClintonEric HolderMaxine Waters and more have openly called for uncivil behavior against conservatives.

Meanwhile, mourners at a vigil for Saturday’s victims in Squirrel Hill were chanting “vote, vote, vote”

liv ✨@oliviakelley32

from the vigil in squirrel hill tonight. please vote on nov 6th.

Eric Lipton

@EricLiptonNYT

WashPost front page points at Trump in both of the weeks terror attacks.

Coming to Trump’s defense

Vice President Mike Pence condemned Trump’s detractors in a NBC News interview which aired Sunday, dismissing suggestions that the president’s rhetoric contributed to recent violence.

“Everyone has their own style and frankly people on both sides of the aisle use strong language about our political differences but I just don’t think you can connect it to threats or acts of violence,” Pence said, adding “The president and I have different styles but the president connected to the American people because he spoke plainly and he spoke the way he speaks about the issues of the day in politics.”

Vaughn Hillyard

@VaughnHillyard

NBC: “Have you ever asked [Trump] to please not use that type of language when referring to other people for the case of civil discourse in this country?”
PENCE: “Look, everyone has their own style, and frankly, people on both sides of the aisle use strong language…”

Secretary of Homeland Security, Kirstjen Nielsen, said that Trump “has made it extraordinarily clear that we will never allow political violence to take root in this country.”

Alex Ryvchin

@AlexRyvchin

To everyone attempting to make the #Pittsburgh synagogue massacre about Trump rhetoric or Israel policies – have you no shame?

The Hill‘s rising conservative voice, Buck Sexton, weighed in as well:

Buck Sexton

@BuckSexton

Over the past month, we’ve been told Trump bears blame for these horrific incidents:
1) anti-Semitic mass shooting
2) anti-Democrat mail bomber
3) Kashoggi Murder

Everything terrible is somehow Trump’s fault now, always.
This is a delusion, and a very destructive one.

Washington Post

@washingtonpost

Perspective: How much responsibility does Trump bear for the synagogue shooting in Pittsburgh? https://wapo.st/2D9Vlrl 

Mollie Hemmingway of The Federalist slammed the Washington Post over blaming Trump:

Mollie

@MZHemingway

Yet another missed opportunity for major media to demonstrate their ability to cover things fairly. And at such an important time.

Eric Lipton

@EricLiptonNYT

WashPost front page points at Trump in both of the weeks terror attacks.

View image on Twitter

Considering that yesterday’s Synagogue attacker hated Trump – who is demonstrably pro-Israel and received the “Tree of Life Award” for his support of Israel, the left’s kneejerk reaction is not only misplaced, but serves no purpose but to stoke tension during what should be a time of coming together.

end
The uSA us deploying 5,000 troops to the southern border and actively moving equipment. This is going to be quite a confrontation
( zerohedge)

5,000 Troops To Be Deployed To Southern Border; Military Actively Moving Equipment

The US military will deploy 5,000 troops to the southern border – up from initial estimates of 800, according to the Wall street Journal, citing US officials. The troops will be sent to Texas, Arizona and California as Central American migrant caravan makes its way north through Mexico.

Defense Secretary Jim Mattis told reporters Sunday that the military has already started to deploy countermeasures to the southern border, following weekend reports that Mexican police had abandoned their own blockades as a massive Central American migrant caravan continues their march north, reports AP.

Pentagon is installing jersey barriers ahead of the troop deployment.

Jersey Barrier

The additional troops will provide logistical and other support to the Border Patrol, and will bolster the efforts of the approximately 2,000 National Guard forces already there. The new forces are expected to provide logistical assistance such as air support and equipment, including vehicles and tents.

National Guard troops routinely perform those same functions, so it is not clear why active duty forces are being used. –AP

Mattis’s comments come amid a vow by Homeland Security Secretary Kirstjen Nielsen that the caravan “is not getting in.”

“My general message to this caravan is: Do not come,” Nielsen said. “You will not be allowed in. … There is a right way to immigrate to the United States,” she continued, “and this is not it.

Cassandra Payne@CassieMAGA2016

RT RealSaavedra: DHS Secretary Kirstjen Nielsen: “My general message to this caravan is do not come. You will not be allowed in.”

On Sunday night, Fox News initially reported that just 800 soldiers would be deployed to the border to provide “logistical support,” which includes providing vehicles and tents for the Border Patrol.

The caravan of roughly 7,200 migrants is around 1,000 miles from the closest US border crossing, and is becoming yet another flashpoint over President Trump’s immigration policy less than two weeks before the key November 6 midterm elections. According to Fox, the group is traveling at around 30 miles per day since leaving Honduras.

Vice President Mike Pence warned this weekend that the caravan was being funded by outside, leftist groups, citing intelligence he says was provided by foreign partners along with a telephone call with the President of Honduras.

“What the president of Honduras told me is that the caravan was organized by leftist organizations, political activists within Honduras, and he said it was being funded by outside groups, and even from Venezuela,” Pence told Fox News in an interview late Friday in Yuma, Arizona. “So the American people, I think, see through this – they understand this is not a spontaneous caravan of vulnerable people.” –Fox News

President Trump, meanwhile, has levied harsh criticism at Honduras, Guatemala and El Salvador for not stopping the caravan, and even threatened to cut off aid last week in retaliation. Trump has also claimed that “criminals and unknown Middle Easterners” are among the migrants, while Homeland Security said last week that “gang members” and those with “significant criminal histories” are also traveling with the caravan.

Cindyseestruth@cs00582scs

🚨BREAKING NEWS

FOX just interviewed a member of the caravan that admitted he was a convicted murderer and is traveling with the mob to come back into the United States!

This is who the radical left wants in your Country. VOTE THEM OUT NOVEMBER 6Th!#VoteRed #NoSocialism #MAGA

Over 100 Mexican officers allowed the caravan to cross a bridge they had barricaded following outrage from Mexico’s National Human Rights Commission, which told police that the rural stretch of highway they were blocking had no shade, toilets or water for the migrants.

Police boarded buses and headed further down the highway, while migrants cheered and vowed to trek all the way to the U.S. border.

Mexican President Enrique Pena Nieto launched a program on Friday dubbed “You are home,” which promises shelter, medical attention, schooling and jobs to Central Americans who agree to stay in the southern Mexico states of Chiapas or Oaxaca.

Police commissioner Benjamin Grajeda said that authorities only blocked the highway Saturday to tell people about the government’s offer. “Here in this truck right now you can get help,” he said. –Fox News

Thousands of migrants rejected Mexico’s offer for asylum Friday night, however some said they were willing to discuss the issue once they reach Mexico City. If those discussions don’t result in the caravan stopping, US forces await at the border.

A good one from Michael Snyder: 10 huge numbers that prove the middle class is disintegrating and that the USA is rapidly becoming a nation of Government dependents.
(courtesy Michael Snyder)

10 Numbers That Prove That We Are Rapidly Becoming A Nation Of Government Dependents

Authored by Michael Snyder via The Economic Collapse blog,

As the middle class disintegrates and poverty grows, more Americans than ever are becoming dependent on the government just to survive.

Today, we live in a country where most workers do not earn enough to support a middle class family, and we are seeing the homelessness crisis spiral out of control in major cities on both coasts During this election cycle, many conservatives have been freaking out that an increasing number of Democrats are openly embracing socialism, but the truth is that we are already most of the way to becoming a socialist country.  In fact, as you will see below, more than half of all Americans currently receive more money from the government than they pay in taxes.  We have become absolutely addicted to government money, and this is one of the major trends that is eating away at our nation like cancer.

The government is not supposed to take care of us from the cradle to the grave.

Rather, our founders understood that the proper role of government is to create and protect an environment of liberty and freedom where we would be empowered to take care of ourselves.

Today, most Americans cannot independently take care of themselves, and that makes them dependents.  And when you are a dependent, you aren’t really free.

One of the reasons why I write so much about the decline of the middle class is because it is an existential threat to our way of life.  If you look around the world, or if you go back through history, you will see that tyrannical regimes tend to thrive when populations are poor and cannot stand up for themselves.  If we want our Republic to survive, we need a strong, independent population that is not economically dependent on the government.  That is what we had throughout most of our history, and that is now what we are rapidly losing.

Just because you are working does not mean that you are independent.  At this point, most jobs do not pay enough to support a middle class family, and the ranks of the “working poor” continue to explode.  In reality, Americans are working harder than ever in 2018, and yet things continue to deteriorate.

The following are a few numbers that prove that we are rapidly becoming a nation of government dependents…

Over half the country now receives more in government transfer payments than they pay in taxes.

-According to one recent survey, the cost of living is higher than the median income in 42 U.S. states.

-Today, 50 percent of all American workers make less than $30,533 a year.

62 percent of Americans say that their financial situations have not improved since the last presidential election.

And here are six more from my friend Alan Yerushalmi

If things are this bad now, how dreadful will the outlook be once we are deep into the next recession?

History has shown that once national governments begin to expand in size, they usually keep expanding until they ultimately collapse.

Sadly, a large portion of the population has become convinced that the government should be in the business of handing out as much “free stuff” as possible.  Housing, healthcare and college education are now being called “human rights”, and tens of millions of our fellow citizens feel that they are entitled to be given these things by the government.  Needless to say, this has chilling implications for the future of our country, and I really like how Ryan McMaken made this point in his most recent article

The political implications of this are considerable. As Ludwig von Mises once noted, once we get to the point that a majority of the voting population receives more in benefits than it pays in taxes, then voters will demand more and more wealth be transferred to them through government programs. It will then become politically necessary to extract larger and larger amounts of wealth from a minority in order to subsidize the majority.

Market economics will become less and less popular because the voters will have realized they can — in the words of James Bovard — “vote for a living” instead of work for a living.

Every additional dollar that the federal government spends is an additional dollar that is being stolen from our children and our grandchildren, and we are already more than 21 trillion dollars in debt.

We have been on the greatest debt binge in human history, and that debt binge delayed our day of reckoning, but it did not cancel it.

In fact, one of my contacts just emailed me with some deeply troubling information.  He has a customer that is a Bank of America board member, and that board member told him that they expect things to really start falling apart by late March “at the latest”.  This is word for word what my contact told me…

“I had a customer this past Saturday who was a very high ranking Bank of America board member, and she said in the meetings, they expect late March, at the latest, that things will really start to disintegrate fairly quickly or very quickly. That was AT THE LATEST she said.”

When I say that “dark days are ahead”, I am not using hyperbole.  We really have reached a turning point, and things will never be the same again.

The relentless march of time is inexorable, and eventually the clock runs out for everyone.  America has been living on borrowed time for quite a while, and a perfect storm is looming on the horizon.

end

 

SWAMP STORIES

SWAMP STORIES COURTESY OF THE KING REPORT

and special thanks to Chris Powell of GATA for sending this down to us:

 

I HOPE TO SEE YOU ON TUESDAY IF ALL GOES WELL

Harvey

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One comment

  1. themagicbusguy · · Reply

    Hope you feel better brother.
    Thank you

    Like

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