JAN 3/2019/BLOODBATH IN NEW YORK STOCKS: DOW DOWN 662 POINTS/NASDAQ DOWN 202 POINTS/FOR A CHANGE INVESTORS TURNED TO THE ONLY SAFE HAVEN GOLD AND SILVER: GOLD UP $10.65 TO $1292.80/SILVER UP 22 CENTS TO $15.74/APPLE STOCK POUNDED ON POOR OUTLOOK/ALSO DELTA PULLED ALL AIRLINES STOCKS DOWN/ISM CONFIRMS MARKIT MFG INDEX THAT THE USA IS IN A TAILSPIN/MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

GOLD: $1292.80 UP $10.65 (COMEX TO COMEX CLOSINGS)

Silver:   $15.74 UP 22 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1294.10

 

silver: $15.74

 

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 1 NOTICE(S) FOR 100 OZ (0.0031 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  65 NOTICES FOR 6500 OZ  (.2021 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

40 NOTICE(S) FILED TODAY FOR  200,000  OZ/

 

total number of notices filed so far this month: 156 for 780,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $3800:  down 58

 

Bitcoin: FINAL EVENING TRADE: $3768  down 92 

 

end

 

XXXX

JPMorgan or Goldman Sachs are taking a huge issuance (stopping) of gold at the comex.

today  1/1

EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,281.000000000 USD
INTENT DATE: 01/02/2019 DELIVERY DATE: 01/04/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
661 C JP MORGAN 1
737 C ADVANTAGE 1
____________________________________________________________________________________________

TOTAL: 1 1
MONTH TO DATE: 65

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST ROSE BY AN STRONG SIZED  5,094 CONTRACTS FROM 176,159 UP TO 181,253 WITH YESTERDAY’S GOOD 10 CENT GAIN IN SILVER PRICING AT THE COMEXTODAY WE ARRIVED FURTHER FROM  AUGUST’S  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WE NOW HAVE JUST LESS THAN 22 MILLION OZ STANDING IN DECEMBER. 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 STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

2242 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 2242 CONTRACTS. WITH THE TRANSFER OF 2242 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 2242 EFP CONTRACTS TRANSLATES INTO 11.21 MILLION OZ  ACCOMPANYING:

1.THE 10 CENT GAIN IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST SIX MONTHS:

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING FOR NOVEMBER AND

 21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

AND NOW: INITIALLY 4.945 MILLION OZ STAND IN JANUARY.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY: 5469 CONTRACTS (FOR 2 TRADING DAYS TOTAL 5469 CONTRACTS) OR 27.35 MILLION OZ: (AVERAGE PER DAY: 2734 CONTRACTS OR 13.67 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF DEC:  27.45 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 3.92% 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 2019 TO DATE SILVER EFP’S:           27.34    MILLION OZ.

 

 

 

RESULT: WE HAD A GOOD SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 5094 WITH THE 10 CENT GAIN IN SILVER PRICING AT THE COMEX //MONDAY..THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 2242 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 STRONG SIZED: 7336 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 2242 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 5094 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 10 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.52 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST UNDER 1 BILLION oz i.e. .881 BILLION OZ TO BE EXACT or 126% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED AT THE COMEX: 40 NOTICE(S) FOR 200,000 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:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ  AND NOW JANUARY AT  4.945 MILLION 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 1216 CONTRACTS UP TO 452,576 WITH THE GAIN IN THE COMEX GOLD PRICE/(A RISE IN PRICE OF $3.35//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A huge  SIZED 10,297 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 10,297 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 452,576. 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 SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 11,513 CONTRACTS: 1216 OI CONTRACTS INCREASED AT THE COMEX AND 10,297 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 11,513 CONTRACTS OR 1,151,300 OZ = 35.81 TONNES. AND ALL OF THIS VERY GOOD DEMAND OCCURRED WITH A GAIN IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF  $3.35

 

 

 

 

YESTERDAY, WE HAD 2499 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 12,796 CONTRACTS OR 1,279,600 OZ  OR 39.80 TONNES (2 TRADING DAYS AND THUS AVERAGING: 6398 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 2 TRADING DAYS IN  TONNES: 39.80 TONNES

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

THUS EFP TRANSFERS REPRESENTS 39.80/2550 x 100% TONNES = 1.56% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     39.80  TONNES   *SURPASSED ANNUAL PROD’N

 

 

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 1216 WITH THE GAIN IN PRICING ($3.35) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A VERY HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,297 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 10,297 EFP CONTRACTS ISSUED, WE HAD A HUMONGOUS GAIN OF 11,513 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

10,297 CONTRACTS MOVE TO LONDON AND 1216 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 35.81 TONNES). ..AND ALL OF THIS GOOD  DEMAND OCCURRED WITH THE GAIN OF $3.35 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had: notice(s) filed upon for 100 oz of gold at the comex.

 

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

GLD...

 

WITH GOLD UP $10.65 TODAY 

 

NO CHANGE IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   795.31 TONNES

Inventory rests tonight: 795.31 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 UP 22  CENTS  TODAY:

 

 

A SMALL CHANGES IN SILVER INVENTORY: A WITHDRAWAL OF 118,000 OZ AND THIS NO DOUBT IS TO PAY FOR FEES

 

 

/INVENTORY RESTS AT 317.108 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER ROSE BY A STRONG SIZED 5094 CONTRACTS from 176,159 UP TO 181,253  AND MOVING 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:

 

2242 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 3227 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 5094 CONTRACTS TO THE 2242 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN  OF 7336  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 36.68 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… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ  STANDING IN DECEMBER AND 4.945 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 10 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER STRONG SIZE 2242 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)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 0.93 PTS OR 0.04% //Hang Sang CLOSED DOWN 65.99 POINTS OR 0.26% /The Nikkei closed HOLIDAY / Australia’s all ordinaires CLOSED UP 1.23%

/Chinese yuan (ONSHORE) closed DOWN  at 6.8745AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 46.46 dollars per barrel for WTI and 55.47 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED DOWN AT 6.8745 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8870: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF 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

i)CHINA/TAIWAN

Taiwan will never accept reunification with Beijing..this message uttered by its President

( zerohedge)

4/EUROPEAN AFFAIRS

 

 

i)EU

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

i)Syria/USA

Trump backtracks a little on leaving Syria as he does not want to expose the Kurds to an invading Turkey. He states that they will leave “over a period of time”

(courtesy zerohedge)

ii)Iran/USA
USA warns Iran on its space launches.  Iran feels it has the right to launch space vehicles.  This is getting a little scary!
(courtesy zerohedge)

6. GLOBAL ISSUES

 

 

 

7. OIL ISSUES

We have been outlining to you the big discovery of gas surrounding Israel and Cyprus.  Egypt has also discovered gas in their region.  Major companies are now looking for more natural gas and if found, this could be a major support for Europe.  Right now it is too expensive(7 billion dollars) to carry out the construction of the EastMed Pipeline which would run under the Mediterranean and end up in Italy.  The weakest partner in this endeavour is Cyprus.  On top of costs, they also have to worry about Turkey who may attack Cyprus to bet its gas.

( Katona/OilPrice.com)

 

 

8 EMERGING MARKET ISSUES

i)Venezuela

 

 

 

9. PHYSICAL MARKETS

i)This Bloomberg writer believes that we are heading for a rate cut.  He is wrong.  Powell will continue to raise rates until the economy implodes
( Hunter/Bloomberg/GATA)

ii)Craig is correct: the economic and political conditions now resemble 2010.(courtesy Craig Hemke/Sprott/GATA)

iii)Quite a commentary.  Ambrose Evans Pritchard describes in detail how the euro has failed and how its threatens democracy in the region.  He believes that the Euro should be abolished and each country should go back to its former currency

( Ambrose Evans Pritchard/GATA)

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

 

 

MARKET TRADING

ii)Market data/

a)Two important points here:

i)initial jobless claims jump by 10,000 from 221,000 up to 231,000

ii) Challenger report on layoffs..the highest since 2015 at 43,884 for December with construction layoffs at 8800

without a doubt the economy is faltering..

(courtesy zerohedge)

b)For months, soft data ISM has always reported higher numbers than Markit.  This is a national manufacturing survey of this very important sector of the uSA economy. Today, ISM agreed with Markit that the uSA manufacturing growth sector has been stopped in its tracks.  At 10:30 the Dow is down 500 points.
( zerohedge>)

c)First Apple and now Ford.  Apple stopped reporting monthly sales and this has been followed by Ford.  They just reported a huge plunge in monthly sales of 9%(courtesy zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)EARLY LAST NIGHT:

Initially last night, apple plunges 8% after cutting Q! revenue.  They blame China.

This causes massive flash crashes.  The Swiss franc is probably in danger due to the huge amount of stock in Apple owned by the Swiss Government

( zerohedge)

a i)Early this morning

Apple Now down 9%

( zerohedge)

b)Trump correctly states that billions of dollars have been collected due to the tariffs.  The actual number is 5 billion dollars and that is just enough to pay for the wall.  The problem with tariffs is that it is very inflationary and the added costs must be paid by the consumer

( zerohedge)

c)The Dallas Fed probably has the strongest sector in the USA economy.  Its Fed President Kaplan has just set a new message to Powell:  “Wait a couple of quarters before hiking.  I do not think that Powell will listen.

( zerohedge)

d)We knew that this was coming:  The uSA issues a China travel advisory warning of an

“arbitrary enforcement of local laws”
(courtesy zerohedge)
e)An excellent commentary from Jeffrey Snider.  He makes fun of the Fed’s talk of bonds being “mispriced”

He notes that the euro dollar curve outward is now inverted.  Eurodollar bets in the future are nothing but a bet on interest rates in the future.  In essence it is a future bet on libor.  The total notional bet on the eurodollar curve is 11 trillion dollars.  In total, these bets mean something, and much more than what Powell believes

a must read…

(courtesy Jeffrey Snider)

f)Yesterday, we brought to you one reason why the Republicans must settle the partial government shutdown by Feb 1:  the  food/stamp program is run by the agricultural dept and they run out of funds on the 29th of January.  Here is the second reason why it must be settled:

the IRS will not issue refunds during the shutdown
(zerohedge)

iv)SWAMP STORIES

a)We now know that the famous dinner with Putin, vindicates Michael Flynn of treasonous behaviour.  He was nothing but a patriot.

(courtesy zerohedge)

b)McConnell slams Pelosi’s funding pkg:  stating that he will reject any proposal that Trump will not sign
(courtesy zerohedge)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  ROSE BY A FAIR SIZED 1216 CONTRACTS UP to an OI level 452,576 WITH THE GAIN IN THE PRICE OF GOLD ($3.35) 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  NON ACTIVE DELIVERY MONTH OF JANUARY..  THE CME REPORTS THAT THE BANKERS ISSUED A HUMONGOUS SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 10,247 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  10,247 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  10,247 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:  11,513 TOTAL CONTRACTS IN THAT 10,297 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A FAIR SIZED 1216 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 11,513 contracts OR 1,151,300  OZ OR 35.81 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 360 contracts as we gained 1 contract. We had 7 notices filed on yesterday so we gained 8 contracts or 800 oz will  stand for delivery as these guys refused to morph into London based forwards as well as negate a fiat bonus

 

 

The next active delivery month is February and here the OI FELL by 2441 contracts DOWN to 319,331 contracts.  After February, March received its another 44 contracts to stand at 53.  After March, the next big delivery month is April and here the OI rose by 2941 contracts up to 65,899 contracts.

 

 

 

FOR COMPARISON TO THE  January 2018 contract month

 

 

ON JANUARY 1/2018: 1.297 TONNES STOOD FOR DELIVERY  (Jan 1 2019 initial standing 1.306 tonnes)

EVENTUALLY ON JAN 31.2018: 2.17 TONNES STOOD FOR DELIVERY AS QUEUE JUMPING STARTED IN EARNEST AT THE GOLD COMEX

 

 

WE HAD 1 NOTICES FILED AT THE COMEX FOR 100 OZ. (0.0031 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI rose BY A STRONG 5094 CONTRACTS FROM 176,159 UP TO 181,253 (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 OI COMEX GAIN  OCCURRED WITH A 10 CENT GAIN IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JANUARY AND THE  AMOUNT OF OPEN INTEREST READY TO STAND IS 873 CONTRACTS HAVING LOST ONLY 12 CONTRACTS FROM YESTERDAY.  WE HAD 14 NOTICES FILED ON YESTERDAY, SO WE GAINED 2 CONTRACTS OR  10,000 OZ OF SILVER WILL STAND FOR SILVER AS THESE GUYS REFUSED TO MORPH INTO LONDON BASED FORWARDS AS WELL AS NEGATING A FIAT BONUS

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH IS FEBRUARY AND HERE THE OI FELL BY 17 CONTRACTS DOWN TO 481. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI ROSE BY 5185 CONTRACTS UP TO 147,723 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 7336 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  5094 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 2242 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  7336 CONTRACTS...AND ALL OF THIS DEMAND OCCURRED WITH A 10 CENT GAIN IN PRICING// YESTERDAY

 

 

 

 

 

FOR COMPARISON TO THE COMEX 2017 CONTRACT MONTH AND JANUARY 2018 CONTRACT MONTH

 

 

 

ON FIRST DAY NOTICE JAN 1/2018 CONTRACT MONTH WE HAD A GOOD 2.695 MILLION OZ STAND FOR DELIVERY’

AT THE CONCLUSION OF JAN/2018 WE HAD 3.650 MILLION OZ STAND AS QUEUE JUMPING WAS THE NORM FOR SILVER

.

 

 

 

 

 

 

 

 

We had 40 notice(s) filed for 200,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  254,553  contracts

volumes at the comex for both gold and silver are much less than usual.

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 3-/2019.

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

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
1 notice(s)
 100 OZ
No of oz to be served (notices)
359 contracts
(35900 oz)
Total monthly oz gold served (contracts) so far this month
65 notices
6500 OZ
0.2021 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

We had 0 kilobar entries

 

we had 0 deposits into the customer account

 

total gold customer deposits;  NIL oz

 

we had 0 gold withdrawals from the customer account:

 

 

total gold withdrawing from the customer;  nil oz

 

we had 0  adjustments….

FOR THE DEC 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 1 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JANUARY/2018. contract month, we take the total number of notices filed so far for the month (65) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (360 contract) minus the number of notices served upon today (1 x 100 oz per contract) equals 42,400 OZ OR 1.3188 TONNES) the number of ounces standing in this NON  active month of JANUARY

 

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

No of notices served (65 x 100 oz)  + {360)OI for the front month minus the number of notices served upon today (1 x 100 oz )which equals 42,400 oz standing OR 1.3188 TONNES in this NON  active delivery month of JANUARY.

We gained 8 contracts or an additional 800 oz will stand in this non active month of January.

 

 

 

 

 

THERE ARE ONLY 23.372 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.3188 TONNES STANDING FOR JANUARY

 

 

total registered or dealer gold:  751,413/930 oz or   23.372 tonnes*
total registered and eligible (customer) gold;   8,434,261.646 oz 262.34 tonnes
In December  we had 23.374 tonnes of gold  SERVED UPON against dealer inventory of 23.373 tonnes and  no evidence of settlements.  We generally get a settlement when we see an adjustment from the dealer side to the customer side.. We have now gone through the entire month of December with only one tiny adjustment from a dealer to a customer account.  THERE WERE NO OTHER TRANSFERS TO INDICATE A SETTLEMENT.
Thus by the end of December we had:  23.374 tonnes of gold standing for metal against only 23.186 tonnes of dealer gold and .182 tonnes has been settled…(Dec 17)
We now add 1.306 tonnes of gold served upon against this same 23.301 tonnes available for delivery.
If you want to keep score:
December: 23.374 tonnes
January 1.3188 tonnes
total: 24.685 tonnes against inventory of 23.372 tonnes (registered)

IN THE LAST 27 MONTHS 92 NET TONNES HAS LEFT THE COMEX.

 

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

JAN INITIAL standings/SILVER

JAN 3, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
701,143.857oz
brinks
CNT

 

 

Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory
1,199,265.290
oz
CNT
Scotia
No of oz served today (contracts)
40
CONTRACT(S)
200,000 OZ)
No of oz to be served (notices)
833 contracts
4,165,000 oz)
Total monthly oz silver served (contracts) 156 contracts

(780,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

we had 0 inventory movement at the dealer side of things

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

we had 2 deposits into the customer account

 

i) Into JPMorgan: nil oz

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

JPMorgan now has 150.55 million oz of  total silver inventory or 51.03% of all official comex silver. (152.0 million/292 million)

 

ii) Into  CNT:  1,199,265.290 oz

iii) into Scotia: 599,316.260 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1,199,265.290   oz

we had 2 withdrawals out of the customer account:
i) Out of CNT:  701,067.657 oz
ii) Out of Brinks:  2076.200 oz

 

 

 

 

 

total withdrawals: 703,143.857   oz

 

we had 0 adjustments

 

total dealer silver:  81.854 million

total dealer + customer silver:  293.746 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 40 contract(s) FOR 70,000  oz

To calculate the number of silver ounces that will stand for delivery in JAN., we take the total number of notices filed for the month so far at 156 x 5,000 oz = 780,000 oz to which we add the difference between the open interest for the front month of JAN. (873) and the number of notices served upon today (40x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 156(notices served so far)x 5000 oz + OI for front month of JAN( 873) -number of notices served upon today (40)x 5000 oz equals 4,945,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 2 contracts or an additional 10,000 oz will not stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 92,507 CONTRACTS… 

volumes at the comex very light considering the break out in silver.

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 92,507 CONTRACTS EQUATES to 462 million OZ  66.1 OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.44-% (JAN 3/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.63% to NAV (JAN 3 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.44%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.20/TRADING 12.69/DISCOUNT 3.80

END

And now the Gold inventory at the GLD/

JAN 3/2019/WITH GOLD UP $10.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 795.31 TONNES

JAN 2.2019/WITH GOLD UP $3.35 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 7.64 TONNES/INVENTORY RESTS AT 795.31 TONNES

DEC 31/WITH GOLD DOWN $2.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 28/WITH GOLD UP $2.20 STRANGELY A WITHDRAWAL OF 2.35 TONNES FROM THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 27/WITH GOLD UP $8.65: A MASSIVE 15.88 TONNES WAS ADDED INTO THE GLD/INVENTORY RESTS AT 790.02 TONNES

DEC 26/WITH GOLD UP $0.15: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 24/WITH GOLD UP $15.15: A HUGE DEPOSIT OF 5.00 TONNES INTO THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 21/WITH GOLD DOWN $10.15 TODAY: A HUGE WITHDRAWAL OF 2.65 TONNES/INVENTORY RESTS AT 769.14 TONNES

DEC 20/WITH GOLD UP $11.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY AT 771.79 TONNES

DEC 19/WITH GOLD UP $3.15 TODAY: A HUGE DEPOSIT OF 8.23 TONNES OF GOLD ENTERED THE GLD/INVENTORY RESTS AT 771.79 TONNES

DEC 18/WITH GOLD UP $1.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC  17 WITH GOLD UP $10.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 14/WITH GOLD DOWN $5.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 13/WITH GOLD DOWN $2.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 12/WITH GOLD UP $3.05 A HUGE DEPOSIT OF 3.24 TONNES OF GOLD INTO THE GLD/SOMETHING IS BURNING…/INVENTORY RESTS AT 763.56 TONNES

DEC 11/WITH GOLD DOWN $4.85 A SMALL DEPOSIT OF .59 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.32 TONNES

DEC 10/WITH GOLD DOWN $3.05 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.73 TONNES

DEC 7/WITH GOLD UP $8.35/A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.51 TONNES/INVENTORY RESTS AT 759.73 TONNES

DEC 6/WITH GOLD UP $1.60: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 758.21 TONNES

DEC 5/WITH GOLD DOWN $4.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 758.21 TONNES

DEC 4/WITH GOLD UP $7.25: A HUGE WITHDRAWAL OF 3.53 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 758.21 TONNES

DEC 3/WITH GOLD UP $13.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 30/WITH GOLD DOWN $4.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 29/WITH GOLD UP $1.30: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 28/WITH GOLD UP $9.45 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 761.74 TONNES

NOV 27/WITH GOLD DOWN $8.60 A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 761.74 TONNES

 

 

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JAN 3.2019/ Inventory rests tonight at 795.31 tonnes

*IN LAST 528 TRADING DAYS: 139.85 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 428 TRADING DAYS: A NET 20.15 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 3/2019/WITH SILVER UP 22 CENTS A SMALL CHANGE TODAY: A WITHDRAWAL OF 118,000 OZ TO PAY FOR FEES:  INVENTORY RESTS AT 317.105 MILLION OZ/

JAN 2/2019/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 31/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 28/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 27/WITH SILVER UP 22 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: AN ADDITION OF 94,000 OZ/INVENTORY RESTS AT 317,233

DEC 26/WITH SILVER UP 27 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ

DEC 21/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ/

DEC 20/WITH SILVER UP 4 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.408 MILLION OZ OF SILVER FROM THE SLV/ INV. RESTS AT 317.139 MILLION OZ/

DEC 19/WITH SILVER UP 10 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 751,000 OZ INTO THE SLV./INVENTORY RESTS AT 318.547 MILLION OZ/

DEC 18/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/

DEC 17/WITH SILVER UP 13 CENTS TODAY/ A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 939,000 OZ FROM THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/.

DEC 14/WITH SILVER DOWN 22 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 13/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 12/WITH SILVER UP 22 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ

DEC 11/WITH SILVER UP ONE CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY ESTS AT 318.735 MILLION OZ/

DEC 10/WITH SILVER DOWN 8 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 7/WITH SILVER UP 16 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 6/WITH SILVER DOWN 5 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.817 MILLION OZ//INVENTORY LOWERS TO 318.735 MILLION OZ/

DEC 5/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 321.552 MILLION OZ.

DEC 4/WITH SILVER UP 10 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV:A WITHDRAWAL OF 134,000 OZ//INVENTORY RESTS AT 321.552 MILLION OZ/

DEC 3/WITH SILVER UP 29 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.686 MILLION OZ/

NOV 30/WITH SILVER DOWN 17 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.22 MILLION OZ FROM THE SLV /INVENTORY RESTS AT 321.686 MILLION OZ/

NOV 29/WITH SILVER DOWN 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 322.906 MILLION OZ.

NOV 28/WITH SILVER UP 23 CENTS TODAY: A DEPOSIT OF 188,000 OZ/INVENTORY RESTS AT 322.906 MILLION OZ/

NOV 27/WITH SILVER DOWN 14 CENTS TODAY: A HUGE WITHDRAWAL OF 2.301 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.718 MILLION OZ/

 

 

JAN 3/2019:

 

Inventory 317.105 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

THE RISE IN LIBOR IS CREATING A SCARCITY OF DOLLARS BECAUSE FOREIGN EXCHANGE SWAPS (COSTS) ARE SIMPLY PROHIBITIVE

YOUR DATA…..

6 Month MM GOFO 2.43/ and libor 6 month duration 2.87

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

G0LD LENDING RATE: + .44

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.65%

LIBOR FOR 12 MONTH DURATION: 3.00

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.35

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Hedges Stock Market Falls In 2018 Gaining 2.7% In Euros and 3.8% In Pounds

– Gold acts as hedge in 2018 – up 2.7% and 3.8% in euros and pounds (see tables & charts)
– Stocks fall sharply – S&P500, FTSE & Euro Stoxx 5o fall 6.25%, 12.5% & 15% respectively
– Worst year for most international equity indices since 2008
– Sharp falls in economically sensitive commodities: oil (WTI), gasoline and lumber down 24.2%, 27% & 23.8% respectively
– Volatility surges as seen in VIX rising over 110%
– Volatility continues in 2019 as stocks globally fall with Apple falling 8% overnight
– Gold and silver likely to outperform risk assets again in 2019 (see Outlook 2019 Podcast)

 

Asset performance in 2018 (Finviz.com)

Gold performance in major currencies 2003 to 2018 (Goldprice.org)

 

Gold in USD In 2018 (GoldCore)


Gold in EUR In 2018 (GoldCore)

Gold in GBP In 2018 (GoldCore)

Silver performance in major currencies 2003 to 2018 (Goldprice.org)

 

News and Commentary

Gold futures settle at highest since June (MarketWatch.com)

Gold Opens 2019 With Fanfare as Warning Signs Flash on Growth (Bloomberg.com)

Gold gains on global growth fears, falling Asian stocks (Reuters.com)

Dow futures drop more than 300 points as tech shares get hit after hours on a warning from Apple (CNBC.com)

Brexit ‘bad or awful’ for prospects in 2019, say economists (FT.com)


Source: Bloomberg

2019 is already getting off to a volatile start and we expect to see the political and economic uncertainty of 2018 continue and deepen said GoldCore (MarketWatch.com)

Systematic investment in gold a good option for a likely volatile 2019 (Business-Standard.com)

The euro has failed, threatens democracy, and should be abolished (Telegraph.co.uk)

ECB Takes “Unprecedented” Step Of Putting Italy’s Banca Carige In Administration (ZeroHedge.com)

2019: It Is Going To Be Much Worse Than You Think… (ZeroHedge.com)

2018 was a bad year for investors, for pretty obvious reasons (MoneyWeek.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

02 Jan: USD 1,287.20, GBP 1,014.44 & EUR 1,125.27 per ounce
31 Dec: USD 1,281.65, GBP 1,005.45 & EUR 1,120.03 per ounce
28 Dec: USD 1,277.25, GBP 1,009.16 & EUR 1,114.91 per ounce
27 Dec: USD 1,271.10, GBP 1,006.20 & EUR 1,115.26 per ounce
24 Dec: USD 1,261.25, GBP 996.26 & EUR 1,105.23 per ounce
21 Dec: USD 1,257.60, GBP 993.76 & EUR 1,101.53 per ounce

Silver Prices (LBMA)

02 Jan: USD 15.44, GBP 12.19 & EUR 13.51 per ounce
31 Dec: USD 15.47, GBP 12.11 & EUR 13.51 per ounce
28 Dec: USD 15.30, GBP 12.05 & EUR 13.34 per ounce
27 Dec: USD 15.06, GBP 11.92 & EUR 13.22 per ounce
24 Dec: USD 14.68, GBP 11.60 & EUR 12.88 per ounce
21 Dec: USD 14.69, GBP 11.59 & EUR 12.86 per ounce


Recent Market Updates

– Hope For Best In 2019 But Prepare For Worst by Increased Allocations to Gold and Silver – Outlook 2019 Podcast
– Prepare For Global Debt Bubble Collapse – Outlook 2019
– Happy Christmas From All The Team in GoldCore
– Gold Prices Likely To Go Higher In 2019 After 4% Gain In Q4 2018
– Everything Bubble Started Bursting In 2018 – GoldCore Video
– Global Financial System Is ‘Unstable’ and Risk Of ‘Clearing System Seizure’, BIS Warns
– Gold Flowing From West To East and Now To Goldman Sachs
– Brexit Risk Sees Gold Rise To Test EUR 1,100 Per Ounce
– Yellen Warns Another Financial Crisis Is Brewing
– Gold Krugerrand Coin Worth $1,200 Donated To Charity Again
– EU Recession Imminent – Euro Disunion as Brexit, Italy and End of QE Loom
– Gold and Silver Gained 2% and 3% Last Week While Stocks Dropped Nearly 5%
– Irish Central Bank Refuses To Discuss Gold Reserves In Bank of England Vaults

Mark O’Byrne
 
ii) GATA stories
This Bloomberg writer believes that we are heading for a rate cut.  He is wrong.  Powell will continue to raise rates until the economy implodes
(courtesy Hunter/Bloomberg/GATA)

Key Fed yield gauge points to rate cuts for first time since 2008

 Section: 

By Gregor Stuart Hunter
Bloomberg News
Wednesday, January 2, 2019

A market indicator watched by the Fed as one of the most accurate gauges of economic health is pricing in lower rates for the first time in more than a decade.

The little-known near-term forward spread, which reflects the difference between the forward rate implied by Treasury bills six quarters from now and the current three-month yield, fell to -0.0653 of a basis point today.

It was the first time since March 2008 the gauge — seen as a proxy for traders’ outlook on Federal Reserve policy — fell below zero.

Crossing the threshold indicates the market sees easier policy and recession in “the next several quarters,” economists at the U.S. central bank wrote in a research paper dated July 2018. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-01-02/key-fed-yield-gauge-p…

end

Craig is correct: the economic and political conditions now resemble 2010.

(courtesy Craig Hemke/Sprott/GATA)

Craig Hemke at Sprott Money: Expectations for gold and silver in 2019

 Section: 

5:27p ET Wednesday, January 2, 2018

Dear Friend of GATA and Gold:

Craig Hemke of the TF Metals Report, writing tonight at Sprott Money, argues that economic and political conditions now resemble those of 2010, when gold and silver last enjoyed strong rallies. While bullion banks will keep striving to suppress the monetary metals, Hemke writes, he expects prices to continuing climbing.

Hemke’s analysis is headlined “Expectations for Gold and Silver in 2019” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/expectations-for-gold-and-silver-in-201…

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

END

Quite a commentary.  Ambrose Evans Pritchard describes in detail how the euro has failed and how its threatens democracy in the region.  He believes that the Euro should be abolished and each country should go back to its former curruency

(courtesy Ambrose Evans Pritchard/GATA)

Ambrose Evans-Pritchard: The euro has failed, threatens democracy, and should be abolished

 Section: 

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, January 2, 2019

https://www.telegraph.co.uk/business/2019/01/02/euro-has-failed-threaten…

To be charitable, you could say the euro has proved itself merely by surviving until its 20th birthday this January. That is a low bar.

Monetary union has otherwise failed as an economic and political endeavour. The evidence of Europe’s ‘Lost Decade’ is that it can be made to work only under a regime of technocrat Caesaropapism — that is to say by stripping elected parliaments of their lifeblood control over taxation, spending, and the core economic policies of the nation-state.

“One day the house of cards will collapse,” says Professor Otmar Issing, the founding chief economist of the European Central Bank and the chastened prophet of the euro project.

… 

The London School of Economics has assembled package of papers by illuminati from Europe and North America to mark this week’s anniversary, published by the journal Comparative Political Studies.

Mark Copelovitch, Jeffry Frieden, and Stefanie Walter do not pull their punches in the prologue. The calamitous European Monetary Union saga has led to the “most serious economic crisis in the history of the European Union.” It has done “more lasting damage” to swaths of Europe than the Great Depression of the 1930s and has pitted eurozone states against each other in a bitter struggle for control over the levers of policy.

The political dynamics have become poisonous. Years of rolling crisis “entrenched and amplified the power and influence of creditor countries such as Germany,” working through the European Central Bank and the European Council.

In other words, EU bodies became debt collectors for the creditor bloc, and enforcers of a German-imposed strategy of debt deflation and fiscal contraction. The burden of adjustment fell on the weaker states, leading to a contractionary bias for the whole system. The Nobel fraternity have watched this display of pre-modern and pre-Keynesian illiteracy with a mixture of horror and despair.

Yet nothing is actually changing. There has been no Truth and Reconciliation to probe the disaster that was allowed to unfold. Those in control of the EU machinery still think they were right. The ideology prevails.

The London School of Economics papers said EU leaders have responded at every stage with half measures in a “sequential cycle of piecemeal reform,” just enough to stop the collapse of EMU without resolving the core deformities of an orphan currency with no fiscal union to back it up. “What is clear is that the status quo cannot persist indefinitely if the euro is to survive in the long term,” it said.

I would argue that the spectacle of an EU in such a shambles from 2010 to 2015 led directly to Brexit. It profoundly shook the moral prestige of the EU and demolished claims of economic competence.

While EU leaders quibbled over decimal points and debt repayment in Brussels, youth jobless rates reached 57 percent in Greece, 56 percent in Spain, and much the same across Italy’s Mezzogiorno. These were levels once unthinkable in a modern developed democracy. They have left a wreckage of “labour hysteresis” that will lower economic speed limits for a generation to come.

Several hundred thousand economic refugees came to work in Britain from the EMU depression belt. A further wave from Eastern Europe came to the UK instead of going to the eurozone as they would have done in normal times. The double surge had maximum impact just before the referendum.

More subtly, the euro crisis revealed that the pathologies of monetary union cannot be managed by normal democratic means. The elected prime ministers of Greece and Italy were toppled in 2010 and 2011 and replaced by EU functionaries in soft coups organized by Brussels and the pro-EMU vested interests of each country.

The ECB switched off liquidity support for Greek commercial banks in 2015, knowingly (and illegally?) precipitating a banking collapse that was hard to reconcile with the ECB’s treaty duty to uphold financial stability. When push come to shove, the reflex was authoritarian. It spoke to the character of the EU. That I why I voted for Brexit.

The London School of Economics says the euro crisis was predictable and was in fact widely predicted. It mimicked countless episodes in Latin America, East Asia, and other emerging markets, where debtors borrowed heavily in dollars they could not print.

The pattern is for countries to succumb to credit booms while money is loose and the “carry trade” is in full bloom. They spiral into busts when confidence evaporates and the capital flows dry up. This is the classic “sudden stop” faced by states that do not borrow in their own currency.

Europe’s elites imagined that current account deficits did not matter in the magical euro union, even though the deficit states in southern Europe and Ireland had lost their sovereign policy instruments and no longer had a lender of last resort behind them. They were therefore no different from Argentina or Thailand.

The elites also failed to grasp that fixed exchange rate systems (without full fiscal union) switch currency risk into default risk. The rating agencies also missed this elephant in the room and so did the International Monetary Fund, as it confessed later in its devastating mea culpa. Ideological capture drained everybody of their senses.

The illusion that monetary union was risk-free led to epic bubbles, made worse by a one-size-fits-all interest rate set for German needs when Germany was in trouble.

When the storm hit, the Berlin-Frankfurt-Brussels riposte was to misrepresent what was in essence as a cross-border banking and capital flow crisis as if it were caused by fiscal profligacy in the south. This became the “morality tale” version of EMU. It lives on in the policy structure.

It was and is fundamentally bogus — except for Greece under New Democracy — but it served the interests of Northern creditors. Prof. Issing says the rescue of Greece in 2010 was in fact a bailout for French and German banks. The IMF has admitted that the country was in effect sacrificed to save the euro and the European banking system at a delicate moment.

Yes, the south was naive. Nations feasted on the windfall of lower interest rates. They let unit labour costs ratchet up, even as Germany was ratcheting them down through the Hartz VI wage squeeze in what was objectively — if not intentionally — a beggar-thy-neighbour policy. They forgot that they cannot devalue their way back to exchange-rate equilibrium.

The EU’s cardinal error was to then try to force the high-debt states to claw back 20 or 30 percent lost labour competitiveness against Germany through “internal devaluations,” a euphemism for slashing demand. This was self-defeating even on its own crude terms. It shrank the economic base and drove up debt ratios faster through the denominator effect.

The London School of Economics says the result of so much damage is that the eurozone’s troubles today “appear disturbingly similar” to those of Japan, trapped in deflationary stagnation for 20 years with broken banks. Except that euroland is not Japan. It is not a cohesive society with a monetary and fiscal machinery working in harmony. “Europe’s debt problems look even more serious and threatening,” the LSE said.

Debt-to-GDP ratios in a string of vulnerable countries are far closer to the danger line now they were at the onset of the global financial crisis a decade ago — up from 68 to 125 percent in Portugal, 36 to 98 percent in Spain, 99 to 131 percent in Italy, 65 to 99 percent in France, 54 to 96 percent in Cyprus, and 103 to 176 percent in Greece (despite haircuts).

A weaker euro, interest rates of minus 0.4 percent, quantitative easing (six years too late), and a belated end to fiscal austerity did induce a modest cyclical recovery from 2015 to 2017 but it is not self-sustaining and is already petering out.

The eurozone risks crashing into the next global downturn with no defences. Rates cannot drop any lower. There is no proper banking union with pan-EMU deposit insurance. The dangers of a sovereign-bank “doom loop” remain. They are on full display again in Italy.

Emmanuel Macron’s grand plan to rebuild EMU on safer foundations has come to nothing. There is no fiscal entity worth the name. Counter-cyclical budget stimulus to fight shocks is prohibited by the machinery of the Stability Pact and Fiscal Compact. The ECB is still unable to act as a full lender of last resort.

Berlin has written a “debt brake” into the German constitution, a way of telling the world that it will not take any serious steps to reduce a current account surplus of 8 percent of GDP — a much greater threat to EMU survival than anything happening in Greece.

The LSE team takes a long view, comparing the eurozone’s travails to struggles between Alexander Hamilton and Thomas Jefferson over the handling of state debts in the United States. The battle saw disputes over the first and second national banks and lasted until the completion of U.S. monetary union in the 1870s — and took a civil war to resolve. “Crafting a functioning economic and monetary union is a long, hard road,” the LSE said.

The presumption is that the Europe’s leaders must in the end agree to some form of fiscal union, but this runs into the fundamental barrier of democracy. Such a system would eviscerate the tax and spending prerogatives of elected parliaments, forgetting the lessons of the English Civil War and indeed the American Revolution.

It can retain democratic legitimacy only if the EU goes the whole way to a supranational federal union akin to the United States, and for this there is not the slightest popular support in any major country.

The ineluctable conclusion is that a monetary union of budgetary sovereign states cannot be made to work, and should not be made to work. The euro is a constitutional anomaly. It must therefore be broken up. All else is self-deception.





iii) Other Physical stories
Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
(courtesy zerohedge/Chris Powell)

US seeks halt in civil lawsuit accusing JP Morgan of manipulating metals market, citing criminal case

  • The U.S. wants a federal judge to halt a civil lawsuit accusing J. P. Morgan of manipulating precious metals markets. The Justice Department cited an ongoing criminal case as its reason for the request.
  • A former J. P. Morgan trader pleaded guilty in Connecticut last month to manipulation charges.
  • In the guilty plea, the trader said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors.

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

Amr Alfiky | Reuters
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

The Justice Department is asking a judge to put the brakes on a civil lawsuit against J. P. Morgan Chase, citing an ongoing probe into a “related criminal case” that involves alleged manipulation of precious metals markets.

The department wants a six-month postponement in the proceedings of the civil lawsuit, which was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders. The government also says it could ask for a longer delay in the case, according to a court filing on Monday.

The move comes days after Shak’s lawyer, David Kovel, sought permission to reopen questioning of two former J. P. Morgan traders and the bank’s current global head of base and precious metals trading.

Kovel, in making the request with the Manhattan federal judge in the civil case, cited last month’s guilty plea by one of those former traders, John Edmonds, in federal court in Connecticut.

Edmonds admitted making bogus bids on precious metals contracts while working at the bank from 2009 to 2015.

Neither J. P. Morgan Chase nor Kovel’s clients have opposed the Justice Department’s request.

In arguing for a delay, the Justice Department said Shak’s lawsuit is “related” to Edmonds’ criminal case and that Edmonds has “pleaded guilty and acknowledged his own participation in such conduct, as well as that of other traders.”

“Edmonds awaits sentencing, but the broader investigation is ongoing,” the Justice Department said. The U.S. wants to delay the civil case “to protect the integrity of its ongoing criminal investigation,” it said.

J. P. Morgan did not respond to a request for comment by CNBC. Kovel declined to comment.

Tuesday night, after this story first was published, Judge Paul Engelmayer ordered the federal prosecutors to explain in detail by Monday why postponing proceedings in the civil lawsuit would not harm those involved, and why reopening questioning “would be detrimental to the Government’s ongoing criminal investigation.”

Englemayer also wrote that he regards Edmonds’ guilty plea “as potentially highly consequential” to the civil case.

In his guilty plea, the 36-year-old Edmonds said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors. He admitted to working with “unnamed co-conspirators” at J. P. Morgan, according to the Justice Department.

Kovel wants to question Edmonds again as well as Michael Nowak, the bank’s global head of base and precious metal trading, and former J. P. Morgan Chase Managing Director Robert Gottlieb. The three had previously answered questions under oath in the civil case.

Kovel said in court filings that Nowak was the immediate supervisor of Edmonds, while Gottlieb was Edmonds’ mentor.

In his prior deposition, Edmonds said that Gottlieb sat only a “couple feet” away from him for about five years, and that he was “somebody [he] looked up to in the business,” who helped guide and train him.

Nowak is described by Edmonds as his direct supervisor, with whom he would sometimes discuss trading strategies. Nowak was also the person responsible for overseeing the performance and risk of Edmonds’ portfolio, according to the deposition.

Edmonds also stated in his prior deposition that he would enter precious metals trades for both Nowak and Gottlieb, among others.

The civil lawsuit claims Shak and his fellow plaintiffs lost tens of millions of dollars as a result of actions by J. P. Morgan’s traders.

 

 

 

-END-

Your early THURSDAY 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 6.8745/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.8870   /shanghai bourse CLOSED DOWN 0.93 PTS OR 0.04%

 

HANG SANG CLOSED DOWN 65.99 POINTS OR 0.31%

 

 

2. Nikkei closed HOLIDAY

 

 

 

 

3. Europe stocks OPENED ALL RED 

 

 

 

 

 

 

/USA dollar index RISES TO 96.66/Euro RISES TO 1.1354

3b Japan 10 year bond yield: FALLS TO. +.00/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.71/ 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:: 46.64 and Brent: 55.47

3f Gold UP/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 +.18%/Italian 10 yr bond yield DOWN to 2.83% /SPAIN 10 YR BOND YIELD UP TO 1.43%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.65: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 4.41

3k Gold at $1289.05 silver at:15.59   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 21/100 in roubles/dollar) 68.93

3m oil into the 46 dollar handle for WTI and 55 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 107.71 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9887 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1226 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 +0.18%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.64% early this morning. Thirty year rate at 2.96%

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

6.  TURKISH LIRA:  UP  TO 5.4701

 

Global Markets Tumble On Apple Bombshell, Currency Flash Crash

Global markets started the second trading day of 2019 the same way they did the first one: sharply lower, only instead of more economic gloom out of China, today’s bearish catalyst was only the second revenue warning out of Apple in nearly two decades which has sent AAPL stock tumbling 9% this morning, coupled with a subsequent flash crash in a variety of currency pairs, including the JPY, AUD and TRY, which sparked a selloff in risk assets in what has continued to be a painfully illiquid market, as investors scrambled for safety in safe havens such as bonds and gold even as concerns about slowing global and profit growth persisted while the US government shutdown entered its 13th day and no resolution was in sight.

While S&P futures were down 1.6%, Nasdaq futures led the drop for U.S. futures, dipping as much as 2.9% after Apple shocked investors by slashing its revenue guidance citing an “unforeseen” slowdown in China – which Tim Cook somehow discovered only after the quarter ended – and fewer upgrades to its flagship mobile device.

Apple was down 9% in pre-market trading. Technology shares led the Stoxx Europe 600 Index lower while equities in Asia also declined. Treasuries declined along with most European bonds.

“For the moment, investors have reacted by going into non-risky assets,” said Philippe Waechter, chief economist at Ostrum Asset Management, in Paris. “No one wants to take any risk because none of the uncertainties we are facing have been lifted, whether it’s Brexit, this trade war, or growth. Investors are putting their heads in the sand and waiting.”

“That Tim Cook and his company mentioned China as the reason behind the downturn in the company’s outlook seemed to hit exactly the pressure point traders and investors were already alarmed over,” Greg McKenna, markets strategist at McKenna Macro. “That is, the China and global slowdown which seems to have been confirmed by Wednesday’s global manufacturing PMI data.”

Asian stocks Asia-Pac were mixed following the slide in US equity future, with the ASX 200 (+1.4%) lifted by energy names and gold miners amid yesterday’s spike higher in oil and the Apple-triggered bid in the yellow metal, meanwhile Nikkei 225 was closed again due to a public holiday. Elsewhere, Hang Seng (-0.3%) and Shanghai Comp. (unch) swung between gains and losses with the former weighed on by tech names as Apple suppliers ACC Technologies and Sunny Optical slumped over 5% after Apple’s guidance cut while investors braced for Beijing to roll out fresh support measures for the cooling Chinese economy.

“Chinese authorities have got the luxury of having control not just of the fiscal parts of the government tool case, but also the monetary parts … and I suspect the Chinese authorities will use that,” said Jim McCafferty, head of equity research, Asia ex-Japan, at Nomura.

China’s central bank said late on Wednesday it was adjusting policy to benefit more small firms that are having trouble obtaining financing, in its latest move to ease strains on the private sector, a key job creator. While more fiscal and monetary policy support had been expected in coming months on top of modest measures last year, some analysts wonder if more forceful stimulus will be needed to stabilize the world’s second-largest economy.

Major European bourses were firmly in negative territory by midmorning, with Frankfurt’s DAX with its exposure to Chinese trade and tech-heavy constituents, was the biggest faller and down as much as 1.2% while Paris’ CAC40 dropped 1.1 percent and London eased 0.4 percent. Chipmakers who supply parts to Apple were the worst hit, sending technology stocks to their lowest since February 2017.

The shocking Apple news sparked a violent, multi-currency flash crash in holiday-thinned FX markets as growing concerns about the health of the global economy, particularly in China, sent investors scurrying into the safe-haven of the Japanese yen, which surged through levels not seen in years.

In the liquidity dead zone between 5 and 6pm ET, it took just seven minutes for the yen to surge through levels against Aussie dollar that have held through almost a decade. While some pointed to risk aversion triggered by the Apple guidance cut others said Japanese retail investors were behind the trades. Whatever the cause, the moves were exacerbated by algorithmic programs and thin liquidity with Japan on holiday.

As the yen jumped, the Australian dollar slumped to the lowest in almost 10 years as algorithmic programs amplified sharp gyrations amid thin liquidity during a Japanese holiday; the Turkish lira and British pound also tumbled however all pairs have recouped much of their losses since.

The dollar was last 1 percent weaker against the yen at 107.57, having earlier fallen as low as 104.96, its lowest level since March 2018. The Australian dollar at one point hit levels against the Japanese yen not seen since 2011. The euro was up 0.3 percent, buying $1.1375, and the dollar index which tracks the U.S. currency against a basket of major rivals, was 0.3 percent weaker at 96.52.

In rates, Germany’s 10-year bond yield was most recently at 0.185% after hitting a session low of 0.148 percent, while the US 10Y Treasury yield was modestly higher, rising from 2.62%, the lowest since the start of 2018, to 2.6362%. U.S. crude oil fell 0.9% to $46.12 a barrel, and Brent crude was down 0.2% at $54.82. Slowing global growth is expected to coincide with an increase in crude supply, depressing prices. Gold was higher as the dollar weakened, with spot gold trading up 0.2 percent at $1,289.4 per ounce.

Expected data include jobless claims, while automakers report U.S. sales for December. Simply Good Foods, UniFirst due to report earnings

Market Snapshot

  • S&P 500 futures down 1.4% to 2,475.50
  • STOXX Europe 600 down 0.4% to 335.73
  • MXAP up 0.2% to 145.56
  • MXAPJ down 0.5% to 465.89
  • Nikkei down 0.3% to 20,014.77
  • Topix down 0.5% to 1,494.09
  • Hang Seng Index down 0.3% to 25,064.36
  • Shanghai Composite down 0.04% to 2,464.36
  • Sensex down 0.9% to 35,561.57
  • Australia S&P/ASX 200 up 1.4% to 5,633.41
  • Kospi down 0.8% to 1,993.70
  • German 10Y yield rose 1.0 bps to 0.175%
  • Euro up 0.3% to $1.1377
  • Italian 10Y yield fell 4.9 bps to 2.335%
  • Spanish 10Y yield rose 1.5 bps to 1.416%
  • Brent Futures down 0.7% to $54.54/bbl
  • Gold spot up 0.3% to $1,288.08
  • U.S. Dollar Index down 0.3% to 96.52

Top Overnight News from Bloomberg

  • President Donald Trump has gained little leverage with Democrats two weeks into the partial government shutdown of his own making, with fewer possible escape routes and a more treacherous path ahead as the GOP relinquishes control of the House.
  • The odds of a U.S.-China trade deal are rising because both sides have a clearer sense of each other’s goals and intentions, a former Chinese trade official said ahead of negotiations in Beijing next week.
  • It took seven minutes for the yen to surge through levels against Aussie dollar that have held through almost a decade. While some pointed to risk aversion triggered by Apple Inc. cutting its sales outlook, others said Japanese retail investors were behind the trades. Whatever the cause, the moves were exacerbated by algorithmic programs and thin liquidity with Japan on holiday
  • Congressional leaders were unable to strike a deal to end a partial shutdown of the federal government at a meeting with Donald Trump on Wednesday, and the president invited them to return to the White House on Friday for further negotiations
  • U.S. government officials are publicly withholding judgment on China’s efforts to ease trade tensions ahead of talks next week, raising the prospect that Beijing’s latest economic-reform announcements won’t go far enough to satisfy President Trump’s demands
  • In a sign of the urgency felt by the cartel amid tumbling crude prices, leading member Saudi Arabia throttled back production, according to a Bloomberg survey of officials, analysts and ship-tracking data. The group’s pact to curb output only formally started this week
  • Fewer Japanese businesses are optimistic about economic growth compared with a year ago amid concerns over global trade tensions, Brexit and a sales tax increase, according to a Sankei newspaper survey of 121 leading companies
  • There’s a lack of catalysts on the horizon at the start of 2019 to reverse the slide in Treasury yields as global economic growth wanes and investors shift toward the view that further Federal Reserve tightening would be a mistake

Asia-Pac equities were mixed following the slide in US equity futures after tech-giant Apple fell in excess of 8% after-market following a cut to its Q1 2019 revenue guidance to USD 84.0bln, from previous guidance in the range of USD 89.0-93.0bln. ASX 200 (+1.4%) was lifted by the energy names and gold miners amid yesterday’s spike higher in oil and the Apple-triggered bid in the yellow metal, meanwhile Nikkei 225 was closed again due to a public holiday. Elsewhere, Hang Seng (-0.3%) and Shanghai Comp. (unch) swung between gains and losses with the former weighed on by tech names as Apple suppliers ACC Technologies and Sunny Optical slumped over 5% after Apple’s guidance cut. Meanwhile the Mainland was underpinned by financial names after reports that the PBoC may lower the RRR for banks that lend to small businesses. Of note: China CICC Research stated that the PBoC’s RRR criteria easing could release up to CNY 400bln in liquidity.

Top Asian News

  • First China, Now Apple: Bad Start for Asia Stocks Gets Worse
  • China Easing Expected as $625 Billion ‘Liquidity Hole’ Looms
  • Witching Hour for Currencies Strikes Again as Yen Breaks Loose
  • China’s Huolinhe Says Local Govt Approves 6GW Wind Power Project

Major European equities are predominantly in the red [Euro Stoxx 50 -1.1%] with the SMI (+0.1%) outperforming its pears after returning from a market holiday. SMI index heavyweight UBS (+0.5%) are in the green following comments from their Chairman that now is not the right time for a merger; additionally, he expects to remain in office until 2022. The technology sector (-2.8%) is the underperforming sector with the likes of Dialog Semiconductor (-9.0%), STMicroelectronics (-9.4%), ASML (-5.1%) and Infineon (-5.4%) at the bottom of the Stoxx 600 following Apple cutting their Q1 revenue guidance. Other notable stories include Next (+5.2%) in the green after reporting their expected full year price sales growth of +3.2%, which is in line with September’s guidance and thus avoids a profit warning for the Co. Adecco (-4.8%) are down after being downgraded at Credit Suisse. In addition, luxury names are in the red with the likes of Burberry (-4.8%) and Kering (-4.5%) weighed on by growth concerns in China exacerbated by the aforementioned Apple guidance cut.

Top European News

  • Ryanair Passenger Growth Slowest Since 2015 After Strike Turmoil
  • U.K. Retailers Jump as Next’s Update Comforts Bruised Sector
  • Spain Leads European Sovereigns With First Bond Sale of 2019
  • European Luxury Stocks Decline on China Slowdown Concern

In FX, price action remains a key focus for investor sentiment amid the wild swings seen during Asia-Pac hours. To recap events, FX markets were rattled amid a surge in the JPY which saw the currency gain circa 8% vs. the AUD and 10% vs. TRY with analysts attributing the move to a multitude of factors including thin markets (Japan away from market again), Apple-inspired risk aversion (following revenue guidance cut) and Japanese retail investors liquidating offside positions.

  • In terms of price action at the time, AUD/JPY plummeted from around 75.50 to a low print of 70.50, tripping several stops along the way. Shortly after the stops were taken-out, AUD/JPY pared back a bulk of the move and now trades in close proximity to the 75.00 handle. Elsewhere, at the time, USD/JPY slid sharply below 109.00 to briefly breach 105.00 before recovering to the mid 107.00’s (note, given the velocity of the moves, various platforms have registered differing moves). AUD/USD declined further below 0.7000 to touch levels last seen a decade ago with a session low of 0.6743 before eventually recouping a 0.6900 handle.
  • Aussie and Yen crosses reacted in tandem with the sharp swing, the Pound was hit as GBP/JPY fell through 137.00 to levels just shy of 131.50 and as such, Cable lost the 1.2600 handle and briefly clipped 1.2450 to reach 21-month lows before reclaiming 1.2550 with Lloyds noting pivotal resistance between 1.2590-1.2615 and suggesting that a move through this level would allow for “a stronger recovery in the range under 1.2810-50”. From a fundamental perspective, Brexit-related commentary has begun to pick-up as Mrs May returns to work ahead of Parliament reconvening on the 7th; latest reports suggest that the UK PM has been urged to delay the meaningful vote on her Brexit deal for a second time as government whips failed to persuade enough MPs to back it over the Christmas break.
  • EUR has been slightly more resilient than some of its peers despite a blip lower in EUR/JPY which led EUR/USD to a session low of 1.1310 with the multi-bloc currency thereafter able to benefit from touted short-covering and a broadly softer USD (DXY currently trades just above 96.50 with losses of circa 0.2%). As such, EUR/USD now trades just above of 1.1350 after running out of steam at 1.1384.

In commodities, Brent (unch.) and WTI (-0.2%) prices remain anchored as concerns over global growth and an oversupplied market continue to prevail; ahead of today’s rescheduled API’s (with EIA’s tomorrow). Saudi Arabia are expected to cut February heavy crude prices for crude sold to Asia because of weaker fuel oil margins; as according to a Reuters survey. Elsewhere, Libya’s NOC have said that the Sharara oil field was breached on Tuesday and output will be cut by 8.5k after operations restart for the main system. Gold (+0.2%) is in the green due to safe haven demand from the Apple-stemmed growth fears; with the yellow metal passing 6-month highs earlier in the session, although prices are around USD 4/oz off of the USD 1292/oz session highs. Elsewhere, copper prices are down succumbing to the negative risk sentiment.

US Event Calendar

  • 8:15am: ADP Employment Change, est. 180,000, prior 179,000
  • 8:30am: Initial Jobless Claims, est. 220,000, prior 216,000; Continuing Claims, est. 1.69m, prior 1.7m
  • 10am: Construction spending data postponed by govt shutdown
  • 10am: ISM Manufacturing, est. 57.5, prior 59.3
  • Wards Total Vehicle Sales, est. 17.2m, prior 17.4m

DB’s Jim Reid concludes the overnight wrap

Happy New Year to you all and welcome to 2019. With the over-indulging now hopefully all done and the batteries as close to recharged as possible, now is probably as good a time as ever to have one final look back at what was a remarkable year for markets in 2018. Indeed an hour or so before this we published our standalone performance review for December, Q4 and 2018. It includes our update of what has proven to easily be the most requested chart we’ve ever produced – which hopefully isn’t a representation of the many other charts we’ve done – the percentage of assets which delivered a negative total return in dollar and local currency terms. Without giving too much away, only 7 of the 70 assets in our sample posted a positive total return in dollar terms so the first pub quiz question of the year is to correctly guess which assets those were. Answers are in the performance review.

Before you mull over that, and for those that have been away, it’s worth recapping what markets have done over the holiday period which has been anything but a sleepy couple of weeks. The good news is that we’re returning to US equity markets which are broadly speaking higher than where they finished on December 21st. Indeed the S&P 500, NASDAQ and DOW are up +3.87%, +5.26% and +4.01% since then, respectively. The underlying tone has been a lot more fragile however with the point to point moves also masking a few eventful sessions. We had the biggest Christmas Eve decline (-2.71%) for the S&P 500 ever, then the biggest one-day gain (+4.96%) for the S&P 500 since 2009 on Boxing Day and one of the biggest intraday reversals for the S&P 500 one day later on December 27th when the S&P 500 turned a -2.84% decline into a +0.86% gain over the final 90 minutes of trading.

After US markets had closed last night, we got another injection of volatility, as Apple took the rare move of lowering its revenue guidance, citing weakness in “greater China.” Shares dropped as much as -8.50% in after-hours trading with the announcement implying the first holiday quarter slowdown since 2011, but the real drama came in FX markets, where the yen strengthened as much as +3.70% to 104.87 – a full 4 points from the New York close of 108.88 – in a matter of minutes. Simultaneously, the Australian dollar and Turkish lira weakened as much as -3.50% and -8.89% respectively.The moves have partially retraced, in the case of the Yen it’s now trading at 107.09, however still resemble a flash crash. There was some suggestion that the moves were linked to the Apple news, triggering a wave of risk aversion, while a Japanese holiday likely also compounded the issue.

So it would be a stretch to say that there’s much conviction at the moment with moves in markets over the last couple weeks hardly healthy and it goes to show what thin liquidity conditions and year-end rebalancing can do when markets are as fragile as they’ve been in years. The VIX peaked at 36.07 on a closing basis during that run however has since fallen to 23.22 as of last night’s close.

Here in Europe, it feels like equity markets better fit the underlying fragility with the STOXX 600 only up +0.16% including a -0.13% fall yesterday which wasn’t as bad as first feared, partly helped by WTI oil jumping +4.52% from the lows (and as much as +7.73% at one stage). The S&P 500 bounced up to close +0.13% for context, after being down -1.57% at the open. Cash HY spreads are also +15bps and +10bps wider in the US and Europe respectively (+5bps and +6bps yesterday) and so picking up where we left. Meanwhile bonds had been a bit quieter by comparison, however that was until the last couple of sessions. Indeed the big story yesterday was 10y Bund yields hitting a low of 0.145% intraday, before closing at 0.162% and -7.3bps lower on the day. Still, that’s the lowest closing yield since April 2017 and the biggest one-day decline for Bund yields since last May. And to think that we’re now officially in the period of zero net QE purchases by the ECB. Treasuries also hit 2.621% (-6.4bps) yesterday and the lowest since last January, having fallen -16.4bps over the holiday period. The curve flattened -4.3bps yesterday but is close to flat from where we last reported pre-Christmas at 15bps. Amazingly we are now pricing in 2bps of cuts by the Fed in 2019.

Part of that Bund move was catch-up to the Treasury market, since Germany was closed on December 31st, however the wider risk-off move seemed to be attributed to the confirmation that China’s manufacturing sector has entered contraction territory.Indeed the December Caixin manufacturing PMI fell half a point to 49.7 (vs. 50.2 expected) and thus confirmed the official PMI sub-50 reading from a week before. In addition to China, we also saw sub-50 readings from Taiwan, Malaysia and South Korea and so clear evidence that the lack of resolution around the US-China trade issues have impacted the wider region once more. It’s worth adding that our China economists published their 2019 outlook yesterday which you can find here . Of most significance, they have downgraded their growth forecast for China to 6.1% in 2019 (from 6.3%) with a trough of 5.9% in Q2 before a significant change of policy stance around March/April boosts growth in the second half of the year.

This morning in Asia there’s only been limited follow through from the negative Apple news last night to regional bourses.The Hang Seng and Shanghai Comp for example are down -0.37% and -0.06% respectively while the Kospi is down -0.43%. Markets in Japan are closed while bourses in the likes of Malaysia, Thailand and Indonesia are actually up slightly. News that the PBoC is seeking to boost lending to small and micro-sized enterprises is perhaps helping. However it’s a very different picture for US futures with the S&P 500 currently down -1.48% and NASDAQ -2.43%.The Treasury market isn’t trading overnight with Japan closed. So it could be an interesting US open later.

As for the other newsflow since we’ve been away, the partial US government shutdown has entered its 13th day with President Trump digging his heels in over the border wall funding. The new Congress is due to be sworn in today so we’ll see if this helps resolve the disputes. This follows Trump inviting congressional leaders to the White House yesterday. The new Democratic majority will now take control of the House, but the real sticking point for a budget deal is the need for bipartisanship in the Senate, where the GOP will be 7 seats short of a filibuster-proof majority. Some economic data could be delayed if the shutdown continues, namely home sales, retail sales, and durable goods, though Friday’s jobs report will be unaffected. There has seemingly been better news on the trade front where President Trump reported “big progress” on talks with China President Xi Jingping a few days ago. Meanwhile in Italy, the 2019 budget was passed at the eleventh hour at the compromise deficit figure of 2.04% of GDP. As for the latest on Brexit, former UK Brexit Secretary David Davis wrote in the Telegraph yesterday that the UK PM May should delay the vote on her Brexit deal for a second time highlighting that it could lead to a better deal from the EU as the EU is worried about losing the £39bn “divorce payment” that would come with a Brexit deal.

As for the data away from China, we’ve had much softer-than-expected CPI figures in Europe, specifically for Germany (+1.7% yoy vs. +1.9% expected) and Spain (+1.2% yoy vs. +1.5% expected). In the US, Q3 GDP was revised down -0.1pp to 3.4% and the Kansas City and Richmond Fed manufacturing indexes both fell to multi-year lows.That will certainly heighten interest in the ISM manufacturing report due this afternoon. Yesterday’s manufacturing PMI was revised down 0.1pts to 53.8 although the employment and new orders components were the lowest since 2017. In Europe, the manufacturing PMI was confirmed at 51.4 for the Eurozone, mostly unrevised versus the flash, but with Italy’s reading +0.6pts higher at the expense of Spain’s, which fell -1.5pts. The UK print beat expectations at 54.2 versus 52.5, though the qualitative details indicated that the activity increase was due to stock-building ahead of Brexit uncertainties.

Apart from the ISM report, there will be a few other events to note through the rest of this week. Tomorrow, and as mentioned above, we’ve got the December employment report in the US while Fed Chair Powell is due to make an appearance at the AEA annual meeting alongside former Fed Chairs Bernanke and Yellen. Our US economists don’t expect the Chair to break any new ground on the policy front but he may take the opportunity to clarify the message from the December FOMC meeting, in a similar vein to the NY Fed’s Williams who specifically addressed the slight tweak in the forward guidance message.

As for today, this morning we’ll get the December CPI print in Turkey and November M3 money supply data for the Euro Area. Shortly after in the US we get the December ADP employment change report along with the latest claims reading, November construction spending and then the aforementioned December ISM manufacturing print. The latter is expected to fall -1.5pts to 57.8 at a headline level. Later this evening we’ll also get December vehicle sales numbers. Also, as mentioned earlier, today is also the day that the Democrats officially take control of the House with US Congress sworn in.

3. ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 0.93 PTS OR 0.04% //Hang Sang CLOSED DOWN 65.99 POINTS OR 0.26% /The Nikkei closed HOLIDAY / Australia’s all ordinaires CLOSED UP 1.23%

/Chinese yuan (ONSHORE) closed DOWN  at 6.8745AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 46.46 dollars per barrel for WTI and 55.47 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED DOWN AT 6.8745 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8870: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF 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

 

 

i)North Korea/South Korea/USA/

3 b JAPAN AFFAIRS

3 C CHINA

i)CHINA/TAIWAN

Taiwan will never accept reunification with Beijing..this message uttered by its President

(courtesy zerohedge)

Taiwan Will “Never Accept” Reunification With Beijing, President Says

Following a menacing speech by Chinese President Xi Jinping where he threatened violence against Taiwan should it pursue de jure independence from China and laid bare his intentions to push for a “one country, two systems” arrangement for what China considers to be a ‘rogue province’, pro-independence Taiwanese President Tsai Ing-wen clapped back at Xi in comments to the BBC on Wednesday, where she said the island would never accept reunification with China on Beijing’s terms.

Tsai

After defending the status quo and calling on Beijing to “face the reality” of Taiwan’s continued independence, Tsai declared on Wednesday that the island, which has functioned like a de facto country since 1949, when defeated nationalists led by Kuomintang leader Chiang Kai Shek fled across the Strait of Taiwan to seek refuge from the Communists, would never agree to the “one country, two systems” arrangement like the one that governs Hong Kong.

But on Wednesday, Taiwan’s President Tsai Ing-wen said the island would never accept reunification with China under the terms offered by Beijing.

“I want to reiterate that Taiwan will never accept ‘one country, two systems’. The vast majority of Taiwanese public opinion also resolutely opposes ‘one country, two systems’, and this is also the ‘Taiwan consensus’.”

Under the “one country, two systems” formula, Taiwan would have the right to run its own affairs; a similar arrangement is used in Hong Kong.

Since cementing his untrammeled power over the Chinese government and clearing the path for lifetime rule, Xi has exerted more pressure on Taiwan to bend to Beijing’s will. Last year, he successfully pressed for global airlines to identify Taiwan as a part of China, and has authorized threatening military exercises in the Taiwan Strait.

But what are the chances that Xi adopts a more aggressive posture toward Taiwan, one that potentially involves military conflict? One BBC analyst said this possibility remains remote.

If anything, China will probably step up its efforts to interfere with Taiwan’s elections to undermine pro-independence parties, while strengthening trade and other economic ties.

China may be a rising military superpower, but sending an invading army across the choppy, well-defended waters of the Taiwan strait would still be a huge military gamble, with success far from guaranteed.

Beyond the slightly more strident tone, Mr Xi’s speech does not appear to signal any dramatic change in those calculations, especially when you take into account the more conciliatory passages offering a further strengthening of trade links.

If there is to be any warfare, it is likely to be of the cyber kind; China is reported to be stepping up its efforts to influence Taiwan’s elections to hurt the prospects of independence-leaning parties and politicians.

The hope has long been that it will be China’s growing economic might, not military force, that will eventually pull Taiwan into its embrace.

But as the trade war with the US simmers and Chinese leaders wary of foreign interference, Xi’s threats to strike back against foreigners who interfere with Taiwan could create further tension with the US, particularly after a Chinese admiral threatened to “sink two aircraft carriers” to send the US a message.

end

4.EUROPEAN AFFAIRS

/EU

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

/Syria/USA

Trump backtracks a little on leaving Syria as he does not want to expose the Kurds to an invading Turkey. He states that they will leave “over a period of time”

(courtesy zerohedge)

Trump: Syria Is “Sand And Death”, US Exit Will Be “Over A Period Of Time”

After early this week Trump’s promised “full” and “immediate” US troop withdrawal from Syria was put on shaky ground following a prior meeting with hawk Sen. Lindsey Graham, and following immense push back from the career Washington deep state, the president is showing signs that he could be changing his tune.

President Trump said on Wednesday the US will get out of Syria “over a period of time” and in such a way that will protect America’s Kurdish partners on the ground, at a moment pro-Turkish forces backed by Turkey’s army are set to invade and annex Kurdish enclaves in the north of the country.

Embedded video

Mutlu Civiroglu

@mutludc

President Donald Trump: …”United States wants to protect Kurds in Syria even as it pulls forces out.”

During a Wednesday Cabinet meeting in front of reporters – the first of the new year – Trump did not provide a timetable for a planned military exit while strongly emphasizing he would “not forget” the extraordinary sacrifices the Kurds made in the fight against ISIS.

The president said:

We have to help them, I want to help them…

They fought with us, they died with us… thousands of Kurds died fighting ISIS. they died for us and with us, and for themselves… I don’t forget.

He did, however, deny widespread reports that he had discussed setting a four month timetable for the withdrawal of 2000+ American troops. Previous language of a “hasty” pullout decision reportedly in part prompted Defense Secretary Jim Mattis to resign.

The Kurdish “People’s Protection Units” (YPG) – the core of the US-backed SDF head a convoy of US military vehicles, via Reuters.On Monday Trump appeared to back off prior language of an “immediate” and hasty pullout while emphasizing the operation would be slow. “We’re slowly sending our troops back home to be with their families, while at the same time fighting Isis remnants,” he stated on Twitter Monday.

But he also indicated he’s committed to seeing it through: “If anybody but Donald Trump did what I did in Syria, which was an ISIS loaded mess when I became President, they would be a national hero,” Trump tweeted. “ISIS is mostly gone, we’re slowly sending our troops back home to be with their families, while at the same time fighting ISIS remnants.”

Notably, he also told reporters on Wednesday: “Syria was lost long ago. we’re not talking about vast wealth. we’re talking about sand and death,” while also noting:

“It’s not my fault. I didn’t put us there.”

And in a statement sure to give John Bolton a conniption fit, Trump commented in response to a question on Iran’s role in Syria,saying “they can do what they want there, frankly.”

Embedded video

Ali Özkök – علي أزكوك@Ozkok_

US President #Trump about #Syria:

– We lost it long before
– Kurdish YPG sells oil to Iran
– US Army leaving Syria
– USA still is going to protect YPG

Advocates for a continued US military presence in Syria argue that any pullout would be a gift to Russia, Iran, and Damascus. As a compromise US commanders are currently requesting that Kurdish YPG fighters be allowed to keep their US-supplied weapons, which would anger Turkey.

Meanwhile, the position of French forces involved in the coalition operation to support the Kurds is also made precarious by a US pullout. Macron previously blasted Trump’s announced exit, saying “an ally should be dependable.” Likely it would be impossible for French forces – which maintain a handful of forward operating bases – to stay if American forces completely withdraw.

Syrian Kurdish representatives are currently urging Macron to stay the course in Syria even if the US draws down. Simultaneously there appears increasing indirect coordination between the YPG and the Syrian Army, as talks with Damascus are also said to be making positive momentum in terms of a future settlement of Syria’s Kurdish enclaves.

end
Iran/USA
USA warns Iran on its space launches.  Iran feels it has the right to launch space vehicles.  This is getting a little scary!
(courtesy zerohedge)

Iran Rejects Pompeo Warning To Halt Its Space Launches

Hours after Secretary of State Mike Pompeo threatened Iran via Twitter statement over plans to fire off Space Launch Vehicles with, as Pompeo claimed“virtually the same technology as ICBMs” in a “defiant” launch that will “advance its missile program,” Iran has responded. Iranian Foreign Minister Javad Zarif shot back via Twitter saying “Iran’s launch of space vehicles — & missile tests — are NOT in violation of Res 2231,” which is the UN resolution which endorsed the Joint Comprehensive Plan of Action (JCPA) on Iran’s nuclear program — which the Trump administration pulled out of last May.

FM Zarif wrote on Thursday in response to Pompeo while warning “threats engender threats” and linking to the UN text:

Iran’s launch of space vehicles — & missile tests — are NOT in violation of Res 2231. The US is in material breach of same, & as such it is in no position to lecture anyone on it. Reminder to the US: 1. Res 1929 is dead; 2. threats engender threats, while civility begets civility.

Iran’s defense ministry previously announced plans for three Space Launch Vehicle (SLV) launches in “the coming months,” according to an official statement. This after in late November Iranian Deputy Defense Minister General Qassem Taqizadeh first unveiled plans to send three Iranian made satellites into space soon.

“The satellites have been made by domestic experts and will be put on various orbits,” Taqizadeh said.

Javad Zarif

@JZarif

Iran’s launch of space vehicles— & missile tests—are NOT in violation of Res 2231. The US is in material breach of same, & as such it is in no position to lecture anyone on it.
Reminder to the US:
1. Res 1929 is dead;
2. threats engender threats, while civility begets civility.

The last time Iran conducted a space launch was in July 2017, which the US State Department had warned was “provocative”. The US has long held that United Nations Security Council Resolution 2231 prevents any activity related to ballistic missile technology; however, Iran says the wording leaves open the possibility of missile development programs unrelated to the delivery of nuclear weapons.

The resolution says that Iran “is called upon” not to undertake any activity related to ballistic missiles “designed to be capable” of nuclear warhead delivery while stopping short of explicitly banning the activity.

Secretary Pompeo

@SecPompeo

#Iran plans to fire off Space Launch Vehicles with virtually same technology as ICBMs. The launch will advance its missile program. US, France, UK & Germany have already stated this is in defiance of UNSCR 2231. We won’t stand by while the regime threatens international security.

Pompeo’s Thursday statement follows prior similar warnings. “The United States has continuously cautioned that ballistic missile and SLV launches by the Iranian regime have a destabilizing effect on the region and beyond,” Pompeo said. “France, Germany, the United Kingdom, and many nations from around the world have also expressed deep concern.”

Iran, meanwhile, has always maintained it is free to develop a “peaceful” space program — something Western think tank analysts and officials have condemned as a “cover” for developing military missile technologies

 

end.

6. GLOBAL ISSUES

 

 

 

7  OIL ISSUES

We have been outlining to you the big discovery of gas surrounding Israel and Cyprus.  Egypt has also discovered gas in their region.  Major companies are now looking for more natural gas and if found, this could be a major support for Europe.  Right now it is too expensive(7 billion dollars) to carry out the construction of the EastMed Pipeline which would run under the Mediterranean and end up in Italy.  The weakest partner in this endeavour is Cyprus.  On top of costs, they also have to worry about Turkey who may attack Cyprus to bet its gas.

(courtesy Katona/OilPrice.com)

The Mediterranean Pipeline Wars Are Heating Up

Authored by Viktor Katona via Oilprice.com,

Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined to diversify Europe’s natural gas sources and find a long-term reliable market outlet for all the recent Mediterranean gas discoveries. The three sides have reached an agreement in late November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of which hovers around $7 billion (roughly the same as rival TurkStream’s construction cost). Yet behind the brave facade, it is still very early to talk about EastMed as a viable and profitable project as it faces an uphill battle with traditionally difficult Levantine geopolitics, as well as field geology.

The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably the longest, too, with an estimated length of 1900km. The countries involved proceed from the premise that the pipeline’s throughput capacity would be 20 BCM per year (706 BCf), although previous estimates were within the 12-16 BCm per year interval. According to Yuval Steinitz, the Israeli Energy Minister, the stakeholders would need a year to iron out all the remaining administrative issues and 4-5 years to build the pipeline, meaning it could come onstream not before 2025.

The idea of EastMed was first flaunted around 2009-2010 as the first more or less substantial gas discovery in the Eastern Mediterranean, the Tamar gas field in Israel’s offshore zone, paved the way for speculations about an impending gas boom. Then came the 535 BCm (18.9 TCf) Leviathan in 2010 and the 850 BCm (30 TCf) Zohr discovery in offshore Egypt five years later and suddenly it seemed that an Eastern Mediterranean gas expansion is inevitable. Yet over the years, the operators of Leviathan have already allocated part of their total gas volumes to domestic power generating companies and most notably NEPCO, the Jordanian electric power company (1.6-2BCm per year). Egypt has been concentrating on meeting domestic needs and getting rid of LNG imports, moreover once it bounces back to gas exporter status in 2019, it will only use its own 2 LNG terminals in Damietta and Idku.

Thus, a pertinent question arises – whose gas would be used to fill the EastMed pipeline? If the pipeline starts in offshore Cyprus, then it would be logical to expect that Cyprus’ gas bounty would be somehow utilized. Yet Cyprus has been lagging behind Egypt and Israel in its offshore endeavors and so far lacks a clear-cut giant field to base its supply future on. The two discoveries appraised heretofore, the 6-8 TCf Calypso operated by ENI and the 4.5 TCf Aphrodite operated by Noble Energy, are not enough to support the construction of a relatively expensive gas pipeline – all the more so as Noble has signed a provisional deal to send Aphrodite gas to Egypt’s Idku LNG terminal, most likely by means of a subsea gas pipeline. If we are to judge the viability of the EastMed on the current situation, there is only Calypso and Israel to fill the pipeline, as Greece’s gas export plans are close to zero on the probability scale.

The subsea section from Cyprus’ offshore zone to the island of Crete lies in depths of 3km and is stretched across a seismically active zone. But there is even more – should Turkey claim rights on Cyprus’ offshore hydrocarbon deposits (in February 2018 it sent warships to scare away ENI’s drilling rig that was on its way to xxx), the project is all but dead. This is far from an implausible scenario as President Erdogan stated that Turkey would never allow for the extortion of natural resources in the East Mediterranean by means of excluding Ankara and Northern Cyprus. Cognizant of the risks inherent in an East Mediterranean gas pipeline, there has been no interest from oil and gas majors to participate in the project. This is worrying as the $7 billion are expected to be financed from private investors, of which there is a palpable dearth – despite the EU’s 35 million funding to promote what it sees as a Project of Common Interest.

Yet even for the European Union, the EastMed gas pipeline presents a bit of a headache as its commissioning would render the Southern Gas Corridor, comprising so far only of Trans Adriatic Pipeline (TAP) with a 10 BCm per year throughput capacity, irrelevant by creating a sort-of competitor. The price of the natural gas to be supplied via the EastMed pipeline might become the biggest obstacle of them all – if the cost of producing offshore Mediterranean gas turns out to be $4-5/MMBtu as expected, the addition of further transportation costs to it all would place EastMed supplied at the bottom range of European gas supply options (Russian gas supply is alleged to be profitable with price levels as low as $4/MMbtu). All this might change if any of the East Mediterranean countries were to discover a giant gas field, altering the economics of production or possibly even liquefaction.

In fact, 2019 will witness several key wells being drilled across Cyprus, Egypt and possibly even Israel. ExxonMobil’s testing of Block 10 in offshore Cyprus would largely point to the overall attractiveness of Cyprus as an oil and gas producing country – the drilling has already started, with results expected in Q1 2019. The ENI-operated Noor offshore field in Egypt, adjacent to Zohr, is a much hotter prospect with BP buying into it lately – most likely it will outshine all the other drilling sites in the Eastern Mediterranean, however, if a big discovery is confirmed, it would be most likely used for Egyptian purposes which run counter to the EastMed gas pipeline. Thus, EastMed’s only hope is that Israel 2nd international licensing round, results to be announced in July 2019, will elicit a couple of Leviathan-like finds that would make pipeline construction profitable. Until then, the prospects are rather bleak

8. EMERGING MARKETS

Venezuela

 

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

Euro/USA 1.1354 UP .0042 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 RED

 

 

 

 

USA/JAPAN YEN 107;71  UP 0.279 (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…DEADLY TO OUR YEN SHORTERS

GBP/USA 1.2565     UP    0.0050  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3588 DOWN .0043 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 THURSDAY morning in Europe, the Euro ROSE by 42 basis point, trading now ABOVE the important 1.08 level RISING to 1.1354/ Last night Shanghai composite CLOSED  DOWN 0.93 POINTS OR 0.04% 

 

 

//Hang Sang CLOSED DOWN 62.85 POINTS OR 0.31%

 

/AUSTRALIA CLOSED UP 1.23%  /EUROPEAN BOURSES RED

 

 

 

 

 

 

The NIKKEI: this THURSDAY morning CLOSED HOLIDAY 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED  RED

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 65.99 POINTS OR 0.26% 

 

 

 

/SHANGHAI CLOSED DOWN 0.95 PTS OR 0.04%

 

 

 

 

Australia BOURSE CLOSED UP 1.23%

 

Nikkei (Japan) CLOSED HOLIDAY 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE red

Gold very early morning trading: 1288.40

silver:$15.57

Early THURSDAY morning USA 10 year bond yield: 2.64% !!! DOWN 1 IN POINTS from WEDNESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/DEADLY

The 30 yr bond yield 2.96 DOWN 1  IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)/

USA dollar index early THURSDAY morning: 96.66 DOWN 16 CENT(S) from  WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.77% UP 6    in basis point(s) yield from WEDNESDAY/

JAPANESE BOND YIELD: +.00%  DOWN 0   BASIS POINTS from WEDNESDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.43% UP 3   IN basis point yield from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 2.87 UP 13     POINTS in basis point yield from WEDNESDAY/

 

 

the Italian 10 yr bond yield is trading 137 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.15%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.72% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1395 UP  .0083 or 83 basis points

 

 

USA/Japan: 108.28 UP  0.839 OR 84 basis points/

Great Britain/USA 1.2628 UP .0113( POUND UP 113  BASIS POINTS)

Canadian dollar UP 150 basis points to 1.3482

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed DOWN AT 6.8721-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.8252(  YUAN UP)

TURKISH LIRA:  5.4722

the 10 yr Japanese bond yield closed at +.00%

 

 

 

Your closing 10 yr USA bond yield DOWN 9 IN basis points from WEDNESDAY at 2.59 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.92 DOWN 7 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, 96.36 DOWN 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 THURSDAY: 12:00 PM 

London: CLOSED DOWN 41.57 OR 0.62%

German Dax : CLOSED DOWN 163.53 POINTS OR 1.55%

Paris Cac CLOSED DOWN 77.91 POINTS OR 1.66%

Spain IBEX CLOSED DOWN 26.70 POINTS OR 0.31%

Italian MIB: CLOSED DOWN 112.59 POINTS OR .61%

 

 

 

 

WTI Oil price; 46.22 12:00 pm;

Brent Oil: 55.35 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    68.59  THE CROSS LOWER BY .55 ROUBLES/DOLLAR (ROUBLE HIGHER BY 55 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.4722 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.15 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 :47.09

 

BRENT :55.91

USA 10 YR BOND YIELD: 2.56%….deadly

 

 

USA 30 YR BOND YIELD: 2.92%/.deadly

USA 2 YR BOND YIELD: 2.38%

 

 

 

EURO/USA DOLLAR CROSS: 1.1398 ( UP 83 BASIS POINTS)

USA/JAPANESE YEN:107.57 UP 0.141 (YEN DOWN 14 BASIS POINTS/..deadly to yen shorters

.

 

USA DOLLAR INDEX: 96.26 DOWN  56 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2636 DOWN 121 POINTS FROM YESTERDAY

the Turkish lira close: 5.4578

the Russian rouble:  68.17 UP .42 Roubles against the uSA dollar.( UP 43 BASIS POINTS)

 

Canadian dollar: 1.3481 UP 150 BASIS pts

USA/CHINESE YUAN (CNY) : 6.8721  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.8782 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.15%

 

The Dow closed DOWN 661.858 POINTS OR 2.83%

 

NASDAQ closed DOWN 202.43 POINTS OR 3.04%

 


VOLATILITY INDEX:  25.99 CLOSED UP 1.99 

 

LIBOR 3 MONTH DURATION: 2.794%  .LIBOR  RATES ARE RISING/

 

FROM 2.808

 

 

 

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

TRADING IN GRAPH FORM FOR THE DAY/WEEKLY SUMMARY/FOLLOWED BY TODAY

 

Bloodbath: Stocks Crater As Perfect Storm Of Apple And Recession Fear Hits

If today is any indication of what to expect from the rest of 2019, then hold on to your hats.

Stocks were already on the backfoot after Monday’s shocking Apple revenue guidance cut and the overnight volley of currency flash crashes, yet just as they were attempting to stage a modest rebound following news of Bristol-Myers massive $74 billion acquisition of Celgene and the best ADP payrolls report since February 2018, the hammer hit after the ISM reported a plunge in the December manufacturing ISM, which tumbled to 54.1, the lowest print since Nov 2016 and the biggest monthly drop since the financial crisis.

That was enough to crush any fledgling animal spirits and steamroll any BTFDers, and as fears of an imminent economic recession re-emerged, markets tumbled, with the Dow Jones promptly dropping as much as 650 points lower and after a modest attempt to rebound around noon, it resumed its slide to close at session lows, down 662 points, or 2.84%, with the S&P down 2.5%.

It wasn’t just Apple, however, as poor guidance from Delta crushed the airlines, and sending the Airline sector on its biggest one day drop since 2016…

… while autos were hit by disappointing December auto sales, with Ford announcing that just like GM it too would stop reporting monthly auto sales suggesting that the worst is yet to come.

And speaking of economic fears, both of Bloomberg’s two main Economic surprise indexes turned negative for the first time since Trump was elected, wiping out all economic optimism since the Trump election.

Apple, understandably, did not help, and tumbled 10% its biggest one day drop since 2013, wiping out $75 billion in market cap, roughly equivalent to the market cap of Lockheed Martin’s or Caterpillar’s market cap.

Apple’s plunge was not contained, and went so far as to hit the stock of its 3rd largest shareholder, Berkshire, whose Class A stock tumbled 5%, its 2nd biggest drop since 2011.

While Apple was the biggest hit to the Dow, responsible for 100 points of the drop, it was a bad day overall, with just one Dow company – dividend-paying Verizon – in the green.

Apple’s plunge predictably hit the Nasdaq the hardest, which fell 3.1%, even as some other sectors performed relatively well, with the banks, housing and small caps dropping just oveer 1%.

Much of the volatility in today’s market could have been avoided if traders had only heeded the signs of the past few months: as Alec Young, managing director at FTSE Russell told Bloomberg, “the market is the wisdom of all investors — it was discounting this type of news-flow with the sharp and violent sell-off we got in December. When it makes a big move, up or down, it’s telling you positive or negative things about future developments. The extreme move down was telling you we’d get this type of news-flow.”

Of course, it’s always easier to make such profoundly philosophical observations in retrospect.

But while much of the drama was confined to stocks, the true chaos was in rates, where shorts were crushed (recall “Sorry Jeff: The Treasury Short Squeeze Hasn’t Even Begun Yet“) and a furious buying spree repriced the entire curve sharply lower…

… and while the 10Y yield plunged from 2.62% as low as 2.54%, closing around 2.56%…

… the real fireworks were in the short end, where the 2-Year, 3-Year, and 5-Year yields all dropped below the effective Fed Fundsrate.

Meanwhile, anticipated nothing short of armageddon, the market has now priced out any future rate hikes, and not only sees 7% odds of a March rate cutbut is now pricing in a full rate cut by April 2020, suggesting it is convinced the recession will hit some time in the next 12 months.

In a surprising twist, however, instead of seeing the usual flight to safety into the dollar, the greenback tumbled today sliding to the lowest level since early November.

Meanwhile, with risk assets broadly liquidated, it will come as no surprise that credit was hammered as spreads on both Investment Grade and High Yield continued to blow out wider.

With nothing else working, traders rediscovered a true flight to safety, namely gold and silver, both of which surged to the highest levels since June and gold is now knocking on $1300.

And with another dramatic nightmare session, where scarce liquidity and surging volatility left traders begging for dramamine in the history books, everyone is wondering just what asset class will flash crash in the liquidity vacuum just before 6pm ET…

 

END

market trading

EARLY WEDNESDAY EVENING//THIS IS SERIOUS STUFF!! 

Multiple FX Pairs Suddenly Flash Crashing

In what some have suggested is a chained liquidation stemming from the collapse of AAPL shares after-hours, multiple FX pairs are flashcrashing across the globe amid still low liquidity conditions.

USDJPY just flash-crashed a stunning 4 handles (the biggest drop since Nov 2016) to its lowest in over two years

JPY suddenly panic bid against the USD…

 

Pushing JPY to its strongest against the USD since Nov 2016…

 

In addition to JPY, AUD also crashed…

Sending AUDJPY to its lowest since 2009…

 

And TRY plunged…Having the smell of a major carry trade unwind.

Offshore yuan tumbled…

And so did Cable…

Reuters saying biggest move since 2009. Obviously exacerbated by this being the worst period for FX liquidity, but still…“probably just a little glitch”

END
Late this morning:

Everything Is Plunging: Stocks, Yields, Dollar

it did not take long for the market to flush today, when after a tentative drop following last night’s AAPL revenue guidance cut and the FX multi-flash crash, stocks took lows with the Dow plunging over 650 points this morning following the abysmal ISM Manufacturing report which showed that US mfg sentiment in December tumbled the most since October 2008.

Today’s drop has pushed the Dow to below the Dec 26 closing level, which preceded the historic 1000 point Dow move on December 27. Come to think of it, we are about 350 points from another 4-digit move in the Dow Jones, only this time to the downside.

The broad-based drop is being led by the Nasdaq, which is down over 3%, largely due to the Apple fiasco.

Stocks aren’t the only thing that is sinking: so are Treasury yields led by the belly, with the 10Y tumbling below 2.60%, and down the 2.57% last, the lowest level since January 2018.

Meanwhile, the 1Y yield is just 2bps away from surpassing the yield on the 10Y in today’s curve inversion watch.

Finally, with US recession fears front and center, the US Dollar is also tumbling while gold is surging.

And with everything going to hell in a hand basket, gold is just waiting for the right moment to pounce.

end
wow this is unusual:

2, 3 and 5-Year Treasury Yields All Drop Below The Effective Fed Funds Rate

Things are getting increasingly more crazy in bond land, where moments ago the 2Y Treasury dipped below 2.40%, trading at 2.3947% to be exact, and joining its 3Y and 5Y peers, which were already trading with a sub-2.4% handle. Why is that notable? Because 2.40% is where the Effective Fed Funds rate is, by definition the safest of safe yields in the market, that backstopped by the Fed itself. In other words, for the first time since 2008, the 2Y (and 3Y and 5Y) are all trading below the effective Fed Funds rate. 

That the curve is now inverted from the Fed Funds rate all the way to the 5Y Treasury position suggests that whatever is coming, will be very ugly as increasingly more traders bet that one or more central banks may have no choice but to backstop risk assets and they will do it – how else – by buying bonds, sending yields to levels last seen during QE… i.e., much, much lower.

end

market data/

Two important points here:

i)initial jobless claims jump by 10,000 from 221,000 up to 231,000

ii) Challenger report on layoffs..the highest since 2015 at 43,884 for December with construction layoffs at 8800

without a doubt the economy is faltering..

(courtesy zerohedge)

Construction Industry Layoffs Surge Most On Record

While nowhere near alarming levels, this morning’s initial jobless claims confirm that the improvement in the labor market may be peaking, contrary to what ADP reported earlier, with Initial Jobless Claims jumping by 10K, from 221K to 231K, the highest print since November 2018.

But while the initial claims report indicated some modest slowdown in the economy, if nothing near the recent plunge observed by both the Richmond and Dallas Feds, a far more ominous data point was revealed earlier this morning, when the latest Challenger jobs report found that seven of 28 industries tracked by Challenger had 3k or more layoffs in December, the most since April 2015, which according to Reuters’ Jeoff Hall was “just the fourth time since the end of the Great Recession in which there were seven or more industries with that many layoffs each.”

Also according to Challenger, the December 2018 layoff total of 43,884, was nearly 29% higher than last year and the highest total since 2015. Additionally, in 2018, 538,659 job cuts were announced, 28.6% higher than the 418,770 announced in 2017. This is the highest annual total since 598,510 cuts were recorded in 2015, and the second-highest total since 2011, when 606,082 cuts were announced.

And an even more troubling observation: thenumber of layoffs in the construction industry jumped by 8,822  this was not only more than all 15 prior months combined, but was the most since at least October 2006 when Challenger started tracking the industry. Indicatively, the next closest month with such a high spike in construction job losses was February 2007, just ahead of the Great Recession.

Challenger also noted some special factors, noting that the majority of job cut announcements were due to companies restructuring, with 185,931 cuts were attributed to this reason. Another 145,298 were due to closings. Voluntary severance, such as buyouts or early retirement offers, claimed 48,745.

Challenger tracked 798 announced job cuts specifically due to enacted tariffs. Another 1,565 cuts were blamed on government regulations, either federal or local. Meanwhile, Hurricane Michael was to blame for 800 cuts in Florida. The recent earthquake in Alaska claimed 40 jobs, while 27 workers were cut due to wildfires.

“It remains to be seen, especially as new trade deals continue to be negotiated and tariffs are lifted or further enforced, what the impact on job cuts will be. The large-scale job cut announcements due to these tariffs have yet to be announced, it seems,” said Challenger.

end
For months, soft data ISM has always reported higher numbers than Markit.  This is a national manufacturing survey of this very important sector of the uSA economy. Today, ISM agreed with Markit that the uSA manufacturing growth sector has been stopped in its tracks.  At 10:30 the Dow is down 500 points.
(courtesy zerohedge>)

“Growth Has Stopped”: Manufacturing ISM Crashes Most Since The Financial Crisis

Yesterday, when Markit reported that the US manufacturing PMI tumbled to a 15 month low, we were wondering how much longer the “other” PMI can continue to defy gravity by printing ridiculously high numbers month after month. The answer, it turns out, was about 24 hours, because moments ago the Institute for Supply Management reported that the December ISM plunged from 59.3 to 54.1 – precisely where the PMI print suggested it should – which was the lowest print in the Mfg ISM series since November 2016…

… and the biggest one month drop going back to the financial crisis, when in October 2008 it dropped by 9 points.

Printing just days after both Chinese manufacturing surveys printed in contraction territory, spooking markets, today’s ISM report was a disaster with virtually every subindex tumbling:

  • New orders fell to 51.1 vs 62.1
  • Employment fell to 56.2 vs 58.4
  • Supplier deliveries fell to 57.5 vs 62.5
  • Inventories fell to 51.2 vs 52.9
  • Customer inventories rose to 41.7 vs 41.5
  • Prices paid fell to 54.9 vs 60.7
  • Backlog of orders fell to 50.0 vs 56.4
  • New export orders rose to 52.8 vs 52.2
  • Imports fell to 52.7 vs 53.6

And in table format.

That said, in light of the reported plunge in customer inventories, we are very skeptical this report is in any way accurate in light of reports such as this one which we noted over the weekend: “Overflowing With Excess Inventory, US Companies Turn To Truck Trailers

Fake or not, the respondents were clearly concerned:

  • Growth appears to have stopped. Resources still focused on re-sourcing for U.S. tariff mitigation out of China.” (Computer & Electronic Products)
  • “Customer demand continues to decrease [due to] concerns about the economy and tariffs.” (Transportation Equipment)
  • “Starting to see more and more inflationary increases for raw materials. Also, suppliers [are] forcing price increases due to tariffs.” (Food, Beverage & Tobacco Products)
  • “The ongoing open issues with tariffs between U.S. and China are causing longer-term concerns about costs and sourcing strategies for our manufacturing operations. We were anticipating more clarity [regarding] tariffs at the end of 2018.” (Machinery)
  • “Business is steady, but pace of incoming orders are slowing.” (Furniture & Related Products)
  • “Caution seems to be the outlook. Are we in a correction, or is the market getting ready to slow over time?” (Fabricated Metal Products)
  • “No major change in business operations towards the end of 2018; however, we are carefully monitoring oil prices and outside influence from market conditions to better understand our 2019 outlook and capital plans.” (Petroleum & Coal Products)
  • “Customers are hedge buying in December as a result of announced price increases starting in January.” (Textile Mills)

The report, the latest confirmation of US economic slowdown, has started stocks with the Dow now more than 500 points lower.

END

First Apple and now Ford.  Apple stopped reporting monthly sales and this has been followed by Ford.  They just reported a huge plunge in monthly sales of 9%

(courtesy zerohedge)

Ford Will Stop Reporting Monthly Sales Data After Sales Plunge 9%

Capping what has been an abysmal year for the global automobile market and starting off what Morgan Stanley predicts to be another coming awful year for the industry, Ford reported that its sales for December were down 9%. Ford’s fleet sales and car sales both cratered, falling well into the double digits, or -19.5% and -27.8%, respectively.

And it looks as though Tim Cook isn’t the only one not especially excited about giving up on transparency heading into the back end of a decade-long artificial bull market. Taking a page out of General Motors’ book, Ford announced that they were no longer going to report monthly sales data and will be moving to reporting sales data on a quarterly basis instead.

As a reminder, when General Motors changed its reporting of sales, it hilariously stated that reducing its disclosures would“give a more accurate view of its business operations”.

“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” Kurt McNeil, GM’s U.S. VP of sales operations, said at the time.

Right.

Along those same delusional lines, Ford’s management called the month the end to “another strong year for Ford and the industry”. So strong, in fact, that they want to report sales only 33% as often as they used to.  Here is a more detailed look of how Ford brands fared across the company’s entire portfolio of vehicles:

As far as silver linings, there were two small ones: the company actually beat estimates of sales falling 10% which were forecast by Edmunds. In addition, the company sold more than 900,000 F series trucks.

As a reminder, Morgan Stanley weighed in this morning with a decidedly cautious outlook on the industry for 2019. The bank expects margins lower for all three Detroit automakers, despite the consensus expecting them to rise between 26 and 61 basis points.  Adam Jonas – formerly one of the biggest Tesla cheerleaders – predicts that global auto sales will be down 0.3% year over year in 2019 and that many consensus estimates across the industry are far too optimistic. In a note released Thursday morning, Jonas predicts “lower guidance” coming out of Detroit automakers at the same time that the global auto market sees its first volume drop since 2009.

Morgan Stanley also believes that the Detroit Auto Show is going to be where management teams take the opportunity to guide lower. The show starts on January 14.

USA ECONOMIC STORIES OF INTEREST

EARLY LAST NIGHT:

Initially last night, apple plunges 8% after cutting Q! revenue.  They blame China.

This causes massive flash crashes.  The Swiss franc is probably in danger due to the huge amount of stock in Apple owned by the Swiss Government

(courtesy zerohedge)

SWAMP STORIES

We now know that the famous dinner with Putin, vindicates Michael Flynn of treasonous behaviour.  He was nothing but a patriot.

(courtesy zerohedge)

“Secret” Evidence Vindicates Michael Flynn’s “Treasonous” Dinner With Putin

Over the last month we have learned much more about the circumstances surrounding the departure of former Trump national security adviser Michael Flynn.

Flynn pleaded guilty to making false statements to the FBI about a conversation with then-Russian ambassador to the United States Sergey Kislyak; one on December 29, 2016 in which Flynn urged the Russians to “refrain from escalating the situation in response to sanctions that the US had imposed against Russia,” and another conversation in which Kislyak told Flynn that Russia had decided to moderate its response following the request.

Nothing earth shattering, illegal, or collusive in the “witch hunt” sense – but Flynn was not forthcoming with the Justice Department, or Vice President Mike Pence. He was fired from his post and subsequently pleaded guilty in December 2017 to making false statements to the FBI.

Flynn has been painted as a Russian stooge ever since – with critics pointing to his sitting next to Russian President Vladimir Putin at a Russia Today (RT) dinner as “Exhibit A” that he was clearly a Kremlin puppet. US Green Party candidate Jill Stein was also in attendance.

Except the Obama administration knew everything about the dinner, and Flynn briefed US intelligence officials on the trip, according to The Hill‘s John Solomon – whose claims his sources told him the contents of a classified briefing to Senate Judiciary Committee Chairman Chuck Grassley (R-IA) in May 2017, which Grassley begged to be released to the public.

“It appears the public release of this information would not pose any ongoing risk to national security. Moreover, the declassification would be in the public interest, and is in the interest of fairness to Lt. Gen. Flynn,” wrote Grassley in an August 25, 2017 letter to James Mattis and DIA Director Gen. Vincent Stewart.

Via The Hill:

Were the information Grassley requested made public, America would have learned this, according to my sources:

  • Before Flynn made his infamous December 2015 trip to Moscow — as a retired general and then-adviser to Donald Trump’s presidential campaign — he alerted his former employer, the DIA.
  • He then attended a “defensive” or “protective” briefing before he ever sat alongside Vladimir Putin at the Russia Today (RT) dinner, or before he talked with Russian Ambassador Sergey Kislyak.
  • The briefing educated and sensitized Flynn to possible efforts by his Russian host to compromise the former high-ranking defense official and prepared him for conversations in which he could potentially extract intelligence for U.S. agencies such as the DIA.
  • When Flynn returned from Moscow, he spent time briefing intelligence officials on what he learned during the Moscow contacts. Between two and nine intelligence officials attended the various meetings with Flynn about the RT event, and the information was moderately useful, about what one would expect from a public event, according to my sources.

In other words – when Obama’s former Acting Attorney General Sally Yates publicly claimed Flynn had possibly been “compromised” by Moscow, the American public was denied the context surrounding the controversial RT dinner as the Justice Department remained silent.

Solomon notes that “Rather than a diplomatic embarrassment bordering on treason, Flynn’s conduct at the RT event provided some modest benefit to the U.S. intelligence community, something that many former military and intelligence officers continue to offer their country after retirement when they keep security clearances.”

Would the central character in a Russian election hijack plot actually self-disclose his trip in advance? And then sit through a briefing on how to avoid being compromised by his foreign hosts? And then come back to America and be debriefed by U.S intelligence officers about who and what he saw?

And would a prosecutor recommend little or no prison time for a former general if that former military leader truly had compromised national security?

Highly unlikely. –The Hill

Of course, “there’s no sugar-coating the mistakes Flynn did make,” writes Solomon – noting that he misled the FBI and Pence – and that Flynn didn’t file foreign-lobbying paperwork for money he received from Turkish business (of course, neither did “Steele Dossier” author Christopher Steele, who influenced the 2016 US election with his largely unverified anti-Trump opposition research).

That said – the narrative that Flynn was a Russian stooge “as evidenced” by the RT dinner is now dead. Moreover, Flynn was never charged with anything remotely related to the event, and he came back to the United States and reported intelligence which would ultimately benefit his country.

As Solomon puts it, “the first accounts of the Russia-Flynn story — like many others in the still-unproven collusion narrative — should be amended to reflect that the retired general acted like a patriot, not a traitor, when he visited Moscow for the RT event.”

END

end
McConnell slams Pelosi’s funding pkg:  stating that he will reject any proposal that Trump will not sign
(courtesy zerohedge)

McConnell Slams Pelosi’s Shutdown Package, Will Reject Any Proposals Trump Won’t Sign

As the partial government shutdown enters its 13th day, Senate Majority Leader Mitch McConnell (R-KY) says he won’t entertain any proposals from the Democrat-controlled House that President Trump won’t sign.

McConnell was responding to a government funding package pushed by Speaker-to-be Nancy Pelosi (D-CA) aimed at resolving the shutdown, which contained no provisions to fund President Trump’s border wall.

The sharp impasse comes after a bipartisan meeting with the president on Wednesday aimed to restarting moribund negotiations. But Trump dismissed Pelosi’s plan and said he would look “foolish” for reopening government departments unrelated to the immigration dispute, leaving the new divided Congress opening in a state of remarkable gridlock.

We want the president to open up the government. We are giving him a Republican path to do that, why would he not do it?” Pelosi implored the president after the meeting. –Politico

According to McConnell, the shutdown could drag on for “weeks,” while the Senate Majority Leader dismissed Pelosi’s bill as political theater despite some Senate Republicans endorsing a stopgap bill without wall funding provisions as recently as last month.

“Will these new Democrats come to Washington ready to roll up their sleeves, work together and make laws? Or are they going to waste time on partisan show votes that will do nothing to move the country forward?” McConnell asked on Wednesday night. “Let me make this perfectly clear: The Senate will not waste its time considering a Democrat bill which cannot pass this chamber and which the president will not sign,” he added.

While discussions over the shutdown are at an impasse, the two sides have agreed to keep talking – for now. Congressional legislators have been invited to another White House discussion on Friday, while President Trump noted after Wednesday’s unsuccessful meeting that he is “ready and willing to work with Democrats to pass a bill that secures our borders.”

That said, Trump laid into Democrats over Twitter on Thursday, tweeting: “The Shutdown is only because of the 2020 Presidential Election. The Democrats know they can’t win based on all of the achievements of “Trump,” so they are going all out on the desperately needed Wall and Border Security – and Presidential Harassment. For them, strictly politics!”

Donald J. Trump

@realDonaldTrump

The Shutdown is only because of the 2020 Presidential Election. The Democrats know they can’t win based on all of the achievements of “Trump,” so they are going all out on the desperately needed Wall and Border Security – and Presidential Harassment. For them, strictly politics!

Once Pelosi becomes speaker, things may change according to some Republicans.

Republicans have surmised that Pelosi may be more willing to deal with Trump after winning her speakership election on Thursday, yet Democrats seem to have little interest in ceding ground to the president. Some liberals are urging the Democratic leaders to give Trump no money for a border barrier, and Schumer and Pelosi have settled at $1.3 billion for fencing, which means no increase from current funding levels.

If the Republicans and Trump want to reject that, then the ball is in their court to come up with something they think would fly. There is no appetite on the Democratic side of the aisle to fund a wall that is symbolic at best and largely political for his base,” said Rep. Gerry Connolly (D-Va.). –Politico

Does Connolly think Israel and The Vatican’s “symbolic” walls should come down?

Meanwhile, President Trump has already panned a compromise floated by Vice President Mike Pence which would allocate around half of the $5 billion Trump has been seeking for the wall.

end

SWAMP STORIES/MAJOR STORIES//THE KING REPORT
and special thanks to Chris Powell of GATA for sending this down for us:

John Solomon:Exculpatory Russia evidence about Mike Flynn that US intel kept secret

When Flynn returned from Moscow, he spent time briefing intelligence officials on what he learned during the Moscow contacts. Between two and nine intelligence officials attended the various meetings with Flynn about the RT event, and the information was moderately useful, about what one would expect from a public event, according to my sources…

Rather than a diplomatic embarrassment bordering on treason, Flynn’s conduct at the RT event provided some modest benefit to the U.S. intelligence community, something that many former military and intelligence officers continue to offer their country after retirement when they keep security clearances… Flynn’s attendance at the RT event was disclosed in advance to the intelligence community, he took proactive steps to ensure he could not be compromised by attendees, and he then came back to the United States and reported intelligence designed to benefit America…

https://thehill.com/opinion/white-house/423558-exculpatory-russia-evidence-about-mike-flynn-that-us-intel-kept-secret#.XC0yisc_S_4.twitter

Former NY Times [executive] editor rips Trump coverage as biased

Jill Abramson, the veteran journalist who led the newspaper from 2011 to 2014, says the Times has a financial incentive to bash the president and that the imbalance is helping to erode its credibility…

     “The more ‘woke’ staff thought that urgent times called for urgent measures; the dangers of Trump’s presidency obviated the old standards,”… 

    “Given its mostly liberal audience, there was an implicit financial reward for the Times in running lots of Trump stories, almost all of them negative: they drove big traffic numbers and, despite the blip of cancellations after the election, inflated subscription orders to levels no one anticipated.”…

https://www.foxnews.com/politics/former-n-y-times-editor-rips-trump-coverage-as-biased

END

I WILL SEE YOU ON FRIDAY
H
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