JAN 4/2019/DOW RISES BY 746 POINTS ON A PHONY JOBS REPORT/NASDAQ UP 275 POINTS/GOLD DOWN $8.45 TO $1284.35/SILVER DOWN ONLY 3 CENTS TO $15.71/TRUMP STATES THAT HE WILL HANG TOUGH FOR YEARS UNLESS HE GETS HIS WALL: SAME WITH PENCE/A BIGGY: THE EUROPEAN MONETARY ZONE ISSUED A LOUSY PMI REPORT FOR TODAY/ CHINA LOWERED ITS RRR BUT ONLY FOR JAN 15 AND 22/ MARKET TOTALLY MISREAD IT/JEFFREY SNIDER: ESSENTIAL READING FOR YOU OVER THE WEEKEND!!

 

 

 

GOLD: $1284.35 DOWN $8.45 (COMEX TO COMEX CLOSINGS)

Silver:   $15.71 DOWN 3 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1285.20

 

silver: $15.71

 

TODAY THEY RELEASED THE JOBS REPORT.  NOT ONLY ARE THEY USING A PHONY BIRTH DEATH MODEL TO CREATE JOBS OUT OF THIN AIR, THEY HAVE A NEW MODEL USING “BUSINESS INTERESTS” OR CONSULTANTS..A TOTALLY MADE UP NUMBER.

 

THE REPORT IS A TOTAL JOKE!

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 29 NOTICE(S) FOR 2900 OZ (0.0902 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  94 NOTICES FOR 9400 OZ  (.2923 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

24 NOTICE(S) FILED TODAY FOR  120,000  OZ/

 

total number of notices filed so far this month: 180 for 900,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $3758:  DOWN 13

 

Bitcoin: FINAL EVENING TRADE: $3748  down 18 

 

end

 

XXXX

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

today  8/94

EXCHANGE: COMEX
CONTRACT: JANUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,291.800000000 USD
INTENT DATE: 01/03/2019 DELIVERY DATE: 01/07/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
624 C MERRILL 7
657 C MORGAN STANLEY 3
657 H MORGAN STANLEY 7
661 C JP MORGAN 8
737 C ADVANTAGE 3
800 C RCG 1
800 H RCG 29
____________________________________________________________________________________________

TOTAL: 29 29
MONTH TO DATE: 94

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY AN CONSIDERABLE SIZED  3250 CONTRACTS FROM 181,253 DOWN TO 178,003 DESPITE YESTERDAY’S GOOD 22 CENT GAIN IN SILVER PRICING AT THE COMEXTODAY WE ARRIVED SLIGHTLY CLOSER TO  AUGUST’S  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY 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 HUGELY STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

3306 EFP’S FOR MARCH,  0 FOR APRIL AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 3306 CONTRACTS. WITH THE TRANSFER OF 3306 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 3306 EFP CONTRACTS TRANSLATES INTO 16.530 MILLION OZ  ACCOMPANYING:

1.THE 22 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 4.965 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: 8775 CONTRACTS (FOR 3 TRADING DAYS TOTAL 8775 CONTRACTS) OR 43.875 MILLION OZ: (AVERAGE PER DAY: 2925 CONTRACTS OR 14.625 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  43.875 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 6.27% 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:           43.875    MILLION OZ.

 

 

 

RESULT: WE HAD A CONSIDERABLE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 3250 DESPITE THE STRONG 22 CENT GAIN IN SILVER PRICING AT THE COMEX //MONDAY..THE CME NOTIFIED US THAT WE HAD A HUGE SIZED EFP ISSUANCE OF 3306 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 TINY SIZED: 56 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 3306 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 3250 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 22 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.74 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: 24 NOTICE(S) FOR 120,000 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  4.965 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 A GOOD 4632 CONTRACTS UP TO 457,208 WITH THE STRONG GAIN IN THE COMEX GOLD PRICE/(A RISE IN PRICE OF $10.65//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A HUGE  SIZED 12,530 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 12,530 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 457,208. 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 AN HUGE SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 17,162 CONTRACTS: 4,632 OI CONTRACTS INCREASED AT THE COMEX AND 12,530 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 17,162 CONTRACTS OR 1,716,200 OZ = 53.38 TONNES. AND ALL OF THIS VERY HUGE DEMAND OCCURRED WITH A STRONG GAIN IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF  $10.65

 

 

 

 

YESTERDAY, WE HAD 10297 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 25,326 CONTRACTS OR 2,532,600 OZ  OR 78.77 TONNES (3 TRADING DAYS AND THUS AVERAGING: 8442 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 3 TRADING DAYS IN  TONNES: 78.77 TONNES

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

THUS EFP TRANSFERS REPRESENTS 78.77/2550 x 100% TONNES = 3.09% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     78.77  TONNES

 

 

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 4632 WITH THE GAIN IN PRICING ($10.65) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A VERY HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 12,530 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 12,530 EFP CONTRACTS ISSUED, WE HAD A HUMONGOUS GAIN OF 17,162 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

12,530 CONTRACTS MOVE TO LONDON AND 4632 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 53.38 TONNES). ..AND ALL OF THIS HUGE  DEMAND OCCURRED WITH THE GAIN OF $10.65 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had: 29 notice(s) filed upon for 2900 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $8.45 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 DOWN 3 CENTS  TODAY:

 

 

NO CHANGES IN SILVER INVENTORY/

 

 

/INVENTORY RESTS AT 317.105 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER FELL BY A CONSIDERABLE SIZED 3250 CONTRACTS from 181,253 DOWN TO 178,003  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:

 

3306 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 3306 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 3250 CONTRACTS TO THE 3306 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A TINY GAIN  OF 56  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 0.280 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 4.965 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 22 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER STRONG SIZE 3306 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)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 50.51 PTS OR 2.05% //Hang Sang CLOSED UP 561.67 POINTS OR 2.24% /The Nikkei closed DOWN 452.81 POINTS OR 2.26% / Australia’s all ordinaires CLOSED DOWN 0.31%

/Chinese yuan (ONSHORE) closed UP  at 6.8649 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 47.92 dollars per barrel for WTI and 57.03 for Brent. Stocks in Europe OPENED GREEN 

//ONSHORE YUAN CLOSED UP AT 6.8649 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8775: 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER 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/

China is in deep trouble especially after last weeks’s terrible PMI numbers. Today they announced a RRR cut as liquidity is drying up.  However the cuts will occur only on Jan 15 and Jan 25 to offset liquidity concerns prior to its New Year..  It is business as usual for China

( zerohedge)

ii)Not good if any Canadian wishes to visit China.  Beijing has detained 13 Canadians since the arrest of Meng
( zerohedge)

4/EUROPEAN AFFAIRS

 

 

 

EMU

The European Monetary Zone is generally a good manufacturing producer led by Germany etc.  Today the Eurozone PMI slipped to almost contraction, coming in at 51.1 in December, its weakest report in almost 4 years;

(courtesy zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

 

IRAN/USA

This no doubt will alarm Mike Pompeo and Trump:  Iran to upgrade its speedboats in the Gulf with stealth technology as they want to encounter the uSA Navy in the Gulf.

(courtesy zerohedge)

6. GLOBAL ISSUES

 

 

 

7. OIL ISSUES

 

 

 

8 EMERGING MARKET ISSUES

i)Venezuela

 

 

 

9. PHYSICAL MARKETS

for your interest:  Gold rich Zimbabwe has great difficulty finding any hard currency in its country.  Anheuser Busch subsidiary is demanding only hard currency for its beer.
(Bloomberg/gata)

 

 

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

 

 

MARKET TRADING

a)No doubt about it: a phony jobs report:  they state that payrolls rose by 312,000 and that will probably give Powell the signal to continue with his crazy rate hikes

(courtesy zerohedge)

b)The strong job reports sends stocks and the dollar higher with gold lower .  Now a rate cut odds disappears
( zerohedge)

c)Today the hourly rate increased and that is sending a bad signal to the markets namely because profits will be hit

( zerohedge)

d)I believe that this job report is a big bunch of crap: the December number includes that a huge 181,000 new jobs were created in the 55 yr old and higher bracket..while the younger sector saw a loss of  11,000 jobs…and the hourly rate goes higher//with WalMart greeters?

the report is a phony

(courtesy zerohedge)

e)This causes markets to soar:  Powell is listening carefully to markets. It does not matter..he will

raise rates anyway…the phony jobs report was good cover for him
( zerohedge)

ii)Market data/

 

iii)USA ECONOMIC/GENERAL STORIES

a)A very important commentary from Jeffrey Snyder.  He comments that the global economy is in big trouble and it is led by the USA.

The highlights two very important points:

  1. the Eurodollar futures curve
  2.  the oil price/contango/glut we are witnessing
  3.  the huge rise in the GC repo rate by an astonishing 300 basis points.

All 3 measures are indicating that the entire global growth is coming to a halt.  The Eurodollar curve futures are falling in the next few years out to 2021  This market is 11 trillion dollars and is almost impossible to manipulate.  Investors are voting with their money that interest rates will be falling because of lousy growth. The oil price contango indicates an oil glut caused by the very same lousy global growth. The huge rise in the GC repo rate by 300 points indicates a poor lack of collateral as the growth wanes.

a must read..

( Jeffrey Snider/Alhambra Investment Partners)

b)Michael Snyder explains that the fall in the stock market in 2018 will turn into a huge financial crisis in 2019
( Michael Snyder)
c)tom Luongo talks about Trump and the deep state and how they will try and impeach him this year
(courtesy Tom Luongo)

d)The impact of the government shutdown is already beginning to hit the economy

( zerohedge)

iv)SWAMP STORIES

a)Mike Pence on Tucker Carlson: shutdown will continue until the USA gets its wall funding

( zerohedge)

b)The newly elected House defies Trump by voting to reopen government.  It has no wall funding so this was a total waste of time

( zerohedge)

c)The newly elected House defies Trump by voting to reopen government.  It has no wall funding so this was a total waste of time

( zerohedge)

d)That did not take long: two members of the House are already demanding the impeachment of Trump. Brad Sherman re introduced his bill to impeach him

( zerohedge)

e)Now Trump may declare a National Emergency to build the wall
( zero hedge)
E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN  ROSE BY A GOOD SIZED 4632 CONTRACTS UP TO A LEVEL OF 457,208 WITH THE STRONG GAIN IN THE PRICE OF GOLD ($10.65) IN YESTERDAY’S COMEX TRADING).FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE  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:  12,530 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  12,530 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:  17,162 TOTAL CONTRACTS IN THAT 12,530 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A GOOD SIZED 4632 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 17,162 contracts OR 1,716,200  OZ OR 53.58 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 365 contracts as we gained 5 contract. We had 1 notice filed on yesterday so we gained 6 contracts or 600 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 7977 contracts DOWN to 311,254 contracts.  After February, March received its another 316 contracts to stand at 369.  After March, the next big delivery month is April and here the OI rose by 7863 contracts up to 73,762 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 29 NOTICES FILED AT THE COMEX FOR 2900 OZ. (0.0031 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI FELL BY A CONSIDERABLE 3250 CONTRACTS FROM 181,253 DOWN TO 178,003 (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 22 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 837 CONTRACTS HAVING LOST ONLY 36 CONTRACTS FROM YESTERDAY.  WE HAD 40 NOTICES FILED ON YESTERDAY, SO WE GAINED 4 CONTRACTS OR  20,000 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 ROSE BY 5 CONTRACTS UP TO 486. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI FELL BY 4004 CONTRACTS DOWN TO 143,455 CONTRACTS.

 

 

ON A NET BASIS WE GAINED 56 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  3250 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 3306 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  56 CONTRACTS...AND ALL OF THIS DEMAND OCCURRED WITH A 22 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 24 notice(s) filed for 120,000 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 4-/2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
2000.083 oz
scotia
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
29 notice(s)
 2900 OZ
No of oz to be served (notices)
336 contracts
(33600 oz)
Total monthly oz gold served (contracts) so far this month
94 notices
9400 OZ
0.2923 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 1 gold withdrawals from the customer account:

 

i) out of Scotia:  2000.083 oz

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 29 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 8 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 (94) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (365 contract) minus the number of notices served upon today (29 x 100 oz per contract) equals 43,000 OZ OR 1.3374 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 (94 x 100 oz)  + {365)OI for the front month minus the number of notices served upon today (29 x 100 oz )which equals 43,000 oz standing OR 1.3374 TONNES in this NON  active delivery month of JANUARY.

We gained 6 contracts or an additional 600 oz will stand in this non active month of January.

 

 

 

 

 

THERE ARE ONLY 23.372 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.3374 TONNES STANDING FOR JANUARY

 

 

total registered or dealer gold:  751,413/930 oz or   23.372 tonnes*
total registered and eligible (customer) gold;   8,432,261.563 oz 262.27 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 1.3374 tonnes of gold standing in January against this same 23.372 tonnes available for delivery.
If you want to keep score:
December: 23.374 tonnes
January 1.3374 tonnes
total: 24.711 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 4, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
1,278,904.529oz
CNT

 

 

Deposits to the Dealer Inventory
635,176.000  oz
brinks
Deposits to the Customer Inventory
599,260.250
oz
Scotia
No of oz served today (contracts)
24
CONTRACT(S)
120,000 OZ)
No of oz to be served (notices)
813 contracts
4,065,000 oz)
Total monthly oz silver served (contracts) 180 contracts

(900,000 oz)

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

we had 1 inventory movement at the dealer side of things

i) Into Brinks: 635,176.000 oz ???

total dealer deposits:635,176.000 oz

total dealer withdrawals: 0 oz

we had 1 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  Scotia:  599,260.250 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 599,260.250  oz

we had 1 withdrawals out of the customer account:
i) Out of CNT: 1,278,904.529

 

 

 

 

 

total withdrawals: 1,278,904.529   oz

 

we had 0 adjustments

 

total dealer silver:  82.489 million

total dealer + customer silver:  293.701 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2018. contract month is represented by 24 contract(s) FOR 120,000  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 180 x 5,000 oz = 900,000 oz to which we add the difference between the open interest for the front month of JAN. (837) and the number of notices served upon today (24x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2018 contract month: 180(notices served so far)x 5000 oz + OI for front month of JAN( 837) -number of notices served upon today (24)x 5000 oz equals 4,965,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 4 contracts or an additional 20,000 oz will not stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

TODAY’S SILVER VOLUME:  98,778 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 98,615 CONTRACTS… 

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

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 98615 CONTRACTS EQUATES to 493 million OZ  70.4 OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -3.87-% (JAN 4/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.49% to NAV (JAN 4 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.87%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.12/TRADING 12.65/DISCOUNT 3.68

END

And now the Gold inventory at the GLD/

JAN 4/WITH GOLD DOWN $8.65 TODAY; NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.31 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JAN 4.2019/ Inventory rests tonight at 795.31 tonnes

*IN LAST 529 TRADING DAYS: 139.85 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 429 TRADING DAYS: A NET 20.15 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 4/WITH SILVER DOWN 3 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 317.105 MILLION OZ

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 4/2019:

 

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 2.40/ and libor 6 month duration 2.86

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

G0LD LENDING RATE: + .46

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.63%

LIBOR FOR 12 MONTH DURATION: 3.00

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.37

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold At 6 Month High At $1,300 and All Time Record Highs In Australian Dollars Over $1,870

Gold over 6-month high at $1,300 on global slowdown fears
– Bullion surges 5% in December and consolidates on gains this week
Gold surges to all time record highs in Australian dollars ($1,871)
– Safe haven demand for safe havens as risk assets sold
– Apple’s poor outlook sees stocks fall; Markets now wagering on Fed rate cut
– “2019 is already getting off to a volatile start and we expect to see the political and economic uncertainty of 2018 continue and deepen,” GoldCore told Bloomberg News


Gold price in Australian dollars – 1 year (GoldCore)

We are bullish on gold in this quarter and in 2019 as the market backdrop looks very supportive indeed. For the first time in many years, I am positive on the gold price in the short and medium term – meaning this quarter and the next year or two.

However, we are concerned that gold may have become overbought from a trading perspective in the very short term.

Thus, in the very short term we could see a bit of a pullback. A retracement of some 50% of the recent gains should be expected. A shallow pullback should be greeted as an opportunity to acquire gold at these still under valued levels.

Investors who are allocating to gold for the first time, would be best to dollar, pound or euro cost average into physical gold by buying 50% in the coming days, then 25% in the next month or so and then the remaining 25% withing three to six months. Not having an exposure to physical gold makes investors exposed to major financial and systemic risk.

2019 is already getting off to a volatile start and we expect to see the political and economic uncertainty of 2018 continue and deepen as we told Bloomberg this week.

Gold will continue to act as a hedge in 2019 as it did in 2018.

Gold’s hedging and safe haven credentials were clearly seen again in recent months – especially for UK, EU and Australian investors. Gold gained  2.7% and 3.8% in euros and pounds (see tables & charts). Gold rose 8.5% in Australian dollars in 2018 as the Australian economy slowed down and property and stock markets in Australia fell.

Trade wars, Brexit, EU contagion and the risk of the global debt bubble bursting remain real risks that will likely impact risk assets in 2018, as we discussed in our just released and well received Outlook 2019 Podcast.

We believe risk assets will continue to under perform, while gold (and silver) outperform again in 2019. The record nominal highs seen in Australian dollars this week will be seen in pounds, euros, dollars and other currencies in the coming year or two – possibly as soon as late 2019 or 2020.

As ever, it is prudent to hope for the best but be prepared for less benign financial scenarios by diversification and owning precious metals in the safest ways possible.

Wishing you and yours a healthy and prosperous 2019.

 

 

News and Commentary

Gold Bursts Above $1,300 as Slowdown Tremors Spur New Year Rally (Bloomberg.com)

Gold climbs to over 6-month peak on global slowdown fears (Reuters.com)

House passes bill to end government shutdown without border wall money (CNBC.com)

Markets now wagering on Fed rate cut, China-U.S. trade talks calm nerves (Reuters.com)

Apple Woes Send Stocks Swooning as Treasuries Jump (Bloomberg.com)


Source: Bloomberg

Market’s Obstacles Are Both Macro and Micro – GoldCore via Bloomberg (Bloomberg.com)

Safe Havens Are Back: Yen, Gold and Bonds Are Bought as Risk Assets Sold (Bloomberg.com)

Gold Soars Above $1,300; Nikkei, JGB Yields Tumble As Rout Goes Global (ZeroHedge.com)

Why Apple’s sales warning has rattled the currency markets (MoneyWeek.com)

The Bad Stuff That the Stock Market Worried About Is Starting to Happen (Bloomberg.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA PM)

03 Jan: USD 1,287.95, GBP 1,024.05 & EUR 1,132.62 per ounce
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)

03 Jan: USD 15.53, GBP 12.37 & EUR 13.70 per ounce
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

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

Mark O’Byrne
Executive Director
 
ii) GATA stories
for your interest:  Gold rich Zimbabwe has great difficulty finding any hard currency in its country.  Anheuser Busch subsidiary is demanding only hard currency for its beer.
(Bloomberg/gata)

Gold-rich Zimbabwe can’t even cadge a beer anymore

 Section: 

Anheuser-Busch InBev Zimbabwe Charges Hard Currency to Fight Dollar Shortage

By John Bowker
Bloomberg News
Thursday, January 3, 2019

Delta Corp Ltd., part owned by Anheuser-Busch InBev SA/NV, told Zimbabwean customers it will accept only hard currency for its beverages as local businesses struggle to cope with foreign-exchange shortages.

The maker of Castle Lager, Chibuku sorghum beer, and a range of soft drinks hasn’t been able to pay some international suppliers for “extended periods,” choking off access to further credit, the Harare-based company told retailers and wholesalers in a letter dated Jan. 2. Delta, which will implement the measure from Friday, isn’t receiving enough foreign currency from banks to pay for imports, it said.

… 

 

Our business has been adversely affected by the prevailing shortages of foreign currency,” wrote Delta, about 23 percent owned by the world’s biggest brewer. This has led to orders not being met or prolonged stock shortages, the company said. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-01-03/ab-inbev-zimbabwe-cha…

* * *





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-

Nicholas B on the huge amount of EFP issuance over the past year:

(courtesy Nicholas B.

Good Afternoon Bill, Harvey

After spending hundreds of hours following the fate of the world last year, I believe that nothing is more catastrophic than the destruction of the eco system as deliberately manufactured by the climate engineers. Dane Wigington believes that humanity has far less than a score of years, at the current rate of deliberate climate destruction, before life on earth dives into a terminal decline. In joint second place (but a long way behind in terms of relative importance) would be the horrendous consequences of 5G and the impact of vaccinations aimed at implementing Agenda 21-an American child apparently has 36 vaccinations before the age of 6. In second place is the UK with 24 vaccinations and both countries exhibit abysmal overall health profiles of their populations,

Now that the final EFP figures for 2018 are completed, it is noteworthy that about three times annual global mine supply (excluding Russia and China) was required in the case of these manipulative paper contracts  to subdue the headline price of paper gold, and about four times global mine supply in the case of silver. If you are one of the plethora of commentators who believe that the paper price of the precious metals may rise a little bit in 2019, what is the premise underwriting such forecasts? Naked short, undeliverable paper contracts, in an infinite abundance, dominate the price setting mechanism of the precious metals in the hopelessly corrupt and unregulated futures markets. Why would the price be allowed to rise just a tiny little bit in such circumstances? The only reason would be that the central planners are taking too much strain in suppressing the physical markets, and believe that marginally higher headline paper prices of precious metals might alleviate some of this pressure in the physical markets, where there are copious reports of the unavailability of deliverable metal in any kind of reasonable volume. Fractional reserving in these opaque and hopelessly corrupt markets is reported to be contained within the ‘’narrow’’ parameters of 100 to 500 to one-take your pick .Is it not probable that any indication of unsustainable pressure on physical precious metal price suppression leading to marginal upward pricing adjustments is merely a precursor to the advent of the hegemony of physical metal over vaporous paper contracts and then its ‘rocket time’’.

The collapse of Tower 7 and the consequent conspiracy of silence has been one of many melanomas (or should that be melanomata?) dominating recent USA history. Now at last I hear that these 9/11 crimes will be the subject of a Grand Jury hearing (is that the news that visibly upset the Bush family so much during the funeral?). Who knows! Maybe the criminal conspiracy to suppress physical precious metal will also have its ‘day in the sun’. Just because only one man (Harvey) monitors EFP contracts and otherwise there is a (universal conspiracy of) silence, does not mean that this status quo will continue for ever.

Regards

Nicholas

end

Gold trading today:

Gold Pukes

Because nothing says confidence in monetary and fiscal policy planners like a surge in gold – that cannot be allowed…

Gold punched back into the red for 2019…

Silver is down but not so much…

From fear-driven flows into the precious metal to puking up the barbarous relic in 24 hours… on the back of one data item?

Stocks are almost back to unchanged (blue) but bonds (red) lead the year so far…

Silver has been outperforming gold for the last two weeks…

end

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

i) Chinese yuan vs USA dollar/CLOSED UP TO 6.8649/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS ON TRUCE/

//OFFSHORE YUAN:  6.8775   /shanghai bourse CLOSED UP 50.51 PTS OR 2.05%

 

HANG SANG CLOSED UP 561.67 POINTS OR 2.24%

 

 

2. Nikkei closed DOWN 452.81 POINTS OR 2.26%

 

 

 

 

3. Europe stocks OPENED ALL GREEN 

 

 

 

 

 

 

/USA dollar index FALLS TO 96.15/Euro RISES TO 1.1413

3b Japan 10 year bond yield: FALLS TO. .04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.99/ 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:: 47.92 and Brent: 57.03

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

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

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

3h Oil 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 +.19%/Italian 10 yr bond yield UP to 2.86% /SPAIN 10 YR BOND YIELD UP TO 1.45%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.67: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.40

3k Gold at $1291.40 silver at:15.73   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 85/100 in roubles/dollar) 68.00

3m oil into the 47 dollar handle for WTI and 57 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 107.99 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 0.9864 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1259 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 +0.19%

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 2.60% early this morning. Thirty year rate at 2.94%

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

6.  TURKISH LIRA:  UP  TO 5.4144

 

Global Stocks Surge On Renewed Trade Optimism, Chinese RRR Cut

The global market rollercoaster continues, with stocks around the world surging on the back of renewed trade optimism and a Chinese RRR cut one day after a vicious rout hit equities following the unexpected Apple guidance cut and a miserable US manufacturing ISM print.

Stocks climbed in Europe and Asia and U.S. equity futures indicated a sharply higher open after the US and China confirmed fresh trade negotiations next week, while havens slipped, as Treasuries fell, the yen weakening and gold dipped after hitting $1,300 overnight.

After initially trading lower, S&P futures rebounded after news that vice ministers from the two countries are preparing to hold talks starting Monday, and were trading 1.4% higher on Friday morning after tumbling 2.5% on Thursday.

Optimism for a resolution to the U.S. government shutdown and over trade talks could ease two of the major overhangs that have dogged equities in recent days. The talks will be the first face-to-face negotiation between the two countries since President Donald Trump and his counterpart Xi Jinping agreed to a 90-day truce in their trade war last month.

“I wouldn’t be surprised if we get better communication on trade,” said Stefan Hofer, chief investment strategist at LGT Bank. Still, “we have beginning-of-the-year jitters, low levels of liquidity and exaggerated swings, which feed people’s worst fears — which I simply can’t sign up to at the moment.”

The Stoxx Europe 600 Index also rebounded from two days of losses as every sector advanced led by basic resources and commodity stocks, even as activity among euro zone businesses dipped to its weakest in just over four years in December as their already downbeat expectations also turned more pessimistic, a survey showed on Friday. Markit’s Euro Zone Composite Final PMI held above the 50 mark that separates growth from contraction, but fell to 51.1 from November’s 52.7, also below a flash reading of 51.3 (Services PMIs were as follows: Spain 54.0 vs 53.7 est; Italy 50.5 vs 50.1 est; France 49.0 vs 49.7 est; Germany 51.8 vs 52.5 est; Eurozone 51.2 vs 51.4 est.). That will be disappointing news for policymakers at the European Central Bank, who ended their 2.6 trillion euro ($2.95 trillion) asset purchase program – one of the main sources of stimulus for the bloc’s economy – last month.

IHS Markit PMI™@IHSMarkitPMI

Final Eurozone Services #PMI comes in at 51.2, slightly below flash reading of 51.4 (November: 53.4), pointing to slowest growth in over four years. Germany, France and Italy record notably laggard #PMI prints. Q4 PMI numbers are consistent with growth at around 0.3%qoq.

Earlier, most Asian markets ended higher. Stocks in Japan were the exception, as traders there returned from a holiday, and were catching down to the USDJPY flash crash earlier this week.

Adding to the optimistic tone was a long overdue liquidity injection by the Chinese central bank which cut the required reserve ratio by 1% to release cash into the economy and support rapidly stalling growth. The RRR for banks will drop by 0.5 percentage point on January 15 and a further 0.5 percentage point on January 25, the PBOC said on its website. And yet despite the market’s euphoric take, the PBOC action is far less than meets the eye as the PBOC also announced that its Medium-term Lending Facility loans maturing in the first quarter won’t be rolled over, and the amount of liquidity released will only be able to offset the funding squeeze ahead of the Chinese New Year. So while the cut will release a net 800 billion yuan ($116 billion) of liquidity, it will merely go to replenish liquidity that will be lost to the MLF and continued reverse repo liquidity withdrawals, dousing hopes that “this is it” and China is finally injecting massive amounts of liquidity into the economy.

The latest reduction announced is the first all-inclusive RRR cut since March 2016. China’s top leaders have pledged to keep monetary policy prudent while striking an “appropriate” balance between tightening and loosening in 2019, part of the steps to ratchet up stimulus to support growth. Ahead of the news, which came after China’s markets closed, the Shanghai Composite closed 2.0% higher, while the offshore yuan pared gains slightly to trade 0.1% higher at 6.8763 per dollar.

Traders will now be watching today’s key economic event – the December jobs report – for evidence of how U.S. employers capped a strong year of the scorching US labor market, and as we previewed overnight, should the report surprise strongly to the upside it may be a traditional case of “good news is bad news.”

Fed Chair Powell is also due to take part in the American Economics Association annual meeting along with former Chairs Yellen and Bernanke this morning. Powell is not expected to break any new ground but it will be worth seeing if he reiterates the message made by NY Fed President Williams when he flashed out in more granular detail in the Fed’s messaging in the December statement, specifically addressing the slight tweak in forward guidance. Clearly any comments around recent market volatility and also yesterday’s ISM report will be closely watched too.

Elsewhere, the dollar was largely steady while the yen trimmed some of the big jump from a day earlier and the Aussie dollar rallied as China confirmed trade talks with U.S. next week; gold slipped after touching $1,300 overnight. GBP/USD gained in line with risk-sensitive currencies, failing to get a boost from slightly better-than- expected U.K. services data

Treasury yields led most government bond rates higher. Italian bonds bull steepen, while Bunds fell to day lows after PBOC move.

Elsewhere, oil built on recent gains, with Brent crude heading for its biggest weekly advance since 2016 as traders weighed signs that OPEC is following through on production cuts against hints of an economic slowdown. OPEC cut crude output in December, a Reuters survey showed, and the American Petroleum Institute (API) reported a 4.5 million-barrel drop in crude inventories. Brent crude was up $1.25 to $57.20 a barrel at 1113 GMT, while WTI was up 90 cents at $47.99.

“Recent Chinese data is not confirming the doom-and-gloom trend,” said Olivier Jakob, oil analyst at Petromatrix. “And you’ve got OPEC cutting.”

In addition to payrolls, Fed Chair Powell will make first public remarks since Dec. 19 at the annual meeting of the American Economic Association in Atlanta. Expected data include December’s jobs reports, while Lamb Weston, Cal-Maine Foods are due to report earnings

Market Snapshot

  • S&P 500 futures up 1.3% to 2,479.50
  • STOXX Europe 600 up 1.3% to 338.22
  • MXAP down 0.2% to 145.22
  • MXAPJ up 0.9% to 469.31
  • Nikkei down 2.3% to 19,561.96
  • Topix down 1.5% to 1,471.16
  • Hang Seng Index up 2.2% to 25,626.03
  • Shanghai Composite up 2.1% to 2,514.87
  • Sensex up 0.6% to 35,728.09
  • Australia S&P/ASX 200 down 0.3% to 5,619.36
  • Kospi up 0.8% to 2,010.25
  • German 10Y yield rose 2.7 bps to 0.18%
  • Euro up 0.2% to $1.1415
  • Brent Futures up 1.5% to $56.79/bbl
  • Italian 10Y yield rose 16.5 bps to 2.5%
  • Spanish 10Y yield rose 1.0 bps to 1.439%
  • Brent Futures up 1.5% to $56.79/bbl
  • Gold spot down 0.3% to $1,290.57
  • U.S. Dollar Index down 0.2% to 96.14

Top Overnight News

  • China’s central bank said that it will cut the required reserve ratio by 0.5 percentage point on Jan. 15 and further by 0.5 percentage point on Jan. 25, acting to release cash into the economy to support growth
  • China said a U.S. delegation will visit next week for trade talks, confirming the two sides will have their first face-to- face negotiation since President Donald Trump and his counterpart Xi Jinping agreed to a 90-day truce in their trade war last month
  • A YouGov poll of Tory members found that in a three-way referendum, 57% of them would prefer to leave EU with no deal, 23% would choose Prime Minister Theresa May’s deal and 15% would choose remaining in EU, Telegraph reports, citing the survey carried out for the Economic and Social Research Council- funded Party Members Project
  • The new House Democratic majority voted Thursday to end the partial government shutdown but brought Congress no closer to resolving the impasse over Trump’s demand to pay for a border wall
  • Japan’s benchmark bond yield fell to the lowest in more than two years as a stronger yen and a slowdown in global manufacturing spurred demand for the assets as a haven
  • The bond market’s aggressive overhaul of its outlook for Federal Reserve policy is creating kinks in the front end of the Treasury yield curve. Yields on the two- and five-year sectors fell relative to shorter-dated maturities Thursday, causing portions of the curve to invert
  • President Donald Trump’s trade war with China will force many U.S. companies to join Apple Inc. in announcing lower than expected earnings, the chairman of the White House Council of Economic Advisers said. Among U.S. companies issuing estimates for the fourth quarter, 46 percent have revised the outlook lower
  • Gold advanced above $1,300 an ounce to extend a new year rally
  • German unemployment fell to a record low, extending its five-year decline, as companies signaled confidence in Europe’s largest economy
  • U.K. house price growth slowed to five-year low at 0.5% in 2018, down from 2.6% a year earlier, according to data by Nationwide Building Society

Asian equities were mixed following the slide in US stocks as disappointing ISM manufacturing data added to global growth fears after Apple’s trade-related profit warning. The Dow shed in excess of 600 points while the S&P fell further below the 2500 level and the Nasdaq tumbled 3.0% as the tech sector fell over 5.0%. ASX 200 (-0.3%) and Nikkei 225 (-2.2%) both failed to benefit from the higher base metal prices as the indices bore the brunt of the tech decline on Wall St, while the latter also played catch-up after a week-long holiday. Elsewhere, Hang Seng (+2.4%) and Shanghai Comp. (+2.0%) outperformed after erasing opening losses as almost all Chinese sectors turned green (gains led by oil names and financial firms) on the back of constructive trade developments, with China’s MOFCOM confirming that trade talks with the US are to take place next week, while the release of above-forecast Caixin services PMI exacerbated gains in the bourses.

Top Asian News

  • China, U.S. to Hold Vice-Minister Level Trade Talks Jan. 7-8
  • Huawei Demotes Workers After Embarrassing Tweet From An iPhone
  • India Government Says It’s on Track to Meet Electricity Deadline
  • China Stocks Rebound After Bleak Start to 2019; Brokerages Jump

Major European equities are in the green [Euro Stoxx 50 +1.2%] with the SMI (+0.5%) lagging its peers, weighed on by underperformance in the healthcare sector with index heavyweights Roche (-0.2%) and Novartis (-0.1%) in the red. All sectors, including the aforementioned healthcare sector, are in the green with outperformance seen in materials on the back of positive China trade developments. Mining names such as Thyssenkrupp (+3.5%) and Anglo American (+2.8%) sit towards the top of the Stoxx 600. Other notable stories include BMW (+1.6%) and Volkswagen (+1.3%) who are up after reporting increased US December vehicles sales of +0.3% and +5.0% respectively. Elsewhere, Bayer (+3.3%) are higher after the federal judge overseeing lawsuits alleging that their glyphosate-based weed killer causes cancer has granted the Co’s request to split the upcoming trial into two phases.

Top European News

  • German Unemployment Falls Despite Mounting Risks to Economy
  • Soft Services Expansion Brings U.K. Economy Close to Stagnation
  • Ghosn to Get a Day in Court Almost Two Months After Shock Arrest
  • Poll Shows Most Tories Would Choose No-Deal Brexit: Telegraph

Price action for FX markets thus far has been significantly more orderly than the JPY-inspired volatility seen on late Wednesday as traders await key macro and central bank updates. Starting with the JPY, the Japanese currency has given back some gains to its major counterparts with USD/JPY hovering around the 108.00 level. The story for USD/JPY is more one of JPY weakness rather than USD strength with the DXY in negative territory, albeit still on a 96.00 handle. From a JPY perspective, Japan MOF’s Currency Head Asakawa stated overnight that he is worried about the volatile FX moves and will take steps on forex if needed. Going back to the USD, given recent disappointing macro data, today’s jobs reports from the US will be one of the more pertinent ones as of late from a Fed-perspective. Given the recent market turmoil, markets now fully price in a rate cut by April 2020 vs. the Fed’s view of two hikes in 2019 and one hike in 2020. Amid the starkly opposing views, an out of line report could have major ramifications for the USD either way. However, with Powell speaking two hours after the release, moves in the DXY may lack some conviction as participants await the latest communication from the Fed Chair.

  • Elsewhere, EUR/USD has been able to capitalize on the USD weakness and retain status on a 1.1400 handle within the mid-point of its 2019 range thus far. On the data front, core EZ service PMI readings fell short of analyst estimates who had forecast unchanged readings from the prior report. This was then followed by EZ-wide inflation metrics which revealed a decline in headline CPI Y/Y to 1.6% from 1.9% vs. Exp. 1.8% but did little to place any major weight on the multi-bloc currency.
  • GBP is exerting some strength against its major counterparts as GBP/USD continues to extend its post-flash crash ascent with the move pausing for breath after breaching Monday’s low of 1.2682. The Pound was unable to garner much in the way of support despite a beat on the all-important Services PMI (51.2 vs. Exp. 50.7) with Markit suggesting “The meagre service sector expansion recorded in December is indicative of the economy growing by just 0.1% in the closing quarter of 2018”.
  • AUD/USD has continued to extend its advance above 0.7000 with traders looking to see if the antipodean can see the week out above the psychological level and thus spur hopes for a near-term recovery. AUD was given a further helping hand briefly after the PBOC announced a 100bps cut to bank’s RRR. However, the move higher will fleeting given it had already been touted by Premier Li and was seen as more of a targeted adjustment to cover the Lunar New Year period rather than an unveiling of major stimulus.

In commodities, Brent (+2.2%) and WTI (+2.2%) prices are higher, with WTI trading around the USD 48.00/bbl level and Brent just above the USD 57.00/bbl level. This support comes after a larger than expected draw in API weekly crude stocks of -4.5mln vs. Exp. -3.1mln, with markets now looking towards today’s EIA release. In addition, the Iraq oil ministry has reportedly taken measures to cut output by 3% from October’s level of 4.653mln BPD. Elsewhere, Energy Intel’s Amena Bakr has tweeted that Saudi Arabia are to announce a jump in oil reserves. Gold (-0.2%) has turned negative as the positive trade news from China improved the risk sentiment, with the yellow metal trading just over USD 1290/oz. Additionally, copper prices have improved on the back of positive Chinese trade news with the metal recovering from a 18-month low hit in the previous session.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 183,500, prior 155,000
  • 8:30am: Unemployment Rate, est. 3.7%, prior 3.7%
  • 8:30am: Average Hourly Earnings MoM, est. 0.3%, prior 0.2%; YoY, est. 3.0%, prior 3.1%
  • 8:30am: Average Weekly Hours All Employees, est. 34.5, prior 34.4
  • 8:30am: Underemployment Rate, prior 7.6%
  • 9:45am: Markit US Composite PMI, prior 53.6; Markit US Services PMI, est. 53.4, prior 53.4

DB’s Jim Reid concludes the overnight wrap

It’s fair to say that the holiday period for markets is well and truly over with the ghost of 2018’s past rearing its ugly head for risk assets yesterday. To be fair it never really felt like markets took a break, given some of the violent price action that we’ve seen in the last couple of weeks, but the early focus yesterday was all about the double whammy of Apple shares crashing following their revenue guidance cut and then the compounding pain of a much worse-than-feared US ISM manufacturing report.

The end result was -2.48%, -2.83% and -3.04% declines for the S&P 500, DOW and NASDAQ respectively. The S&P 500 has now traded down by at least -2% on six occasions in the last month, the worst such streak since September to October 2011. In addition to the two main factors mentioned above, sentiment was further hurt by additional ratcheting up of US-China tensions. White House Adviser Kevin Hassett said in reference to the Apple announcement that “it’s not going to be just Apple” and that “there are a heck of a lot of US companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China”. Separately, the US State Department issued a travel warning for US nationals in China, further evidencing that the clash may be escalating beyond the realm of trade and tariffs. Overnight we’ve learned that delegations from China and the US will meet for talks on January 7th and 8thin Beijing although the US Chamber of Commerce has already warned not to expect any major breakthroughs. This will be the first set of talks since Presidents Trump and Xi Jinping agreed to a 90-day truce last month.

Somewhat fittingly, Apple proved to be a perfect example of the feedback from China. Its shares plummeted -9.96% for the biggest drop since January 2013 and to the lowest level since April 2017. Each of Microsoft, Amazon, and Alphabet have all now overtaken Apple in the biggest company in the world table, with Apple’s market cap down -$75bn alone yesterday. The total market value decline since Apple’s peak last October is -$446bn, or the equivalent of Coca-Cola and Pfizer combined. As a result the NYSE FANG index tumbled -3.77% while there were also notable falls for other large caps like Caterpillar (-3.92%), 3M (-3.84%) and DowDupont (-3.63%). In credit markets US HY spreads finished +11bps wider and CDX HY widened +6bps. Benchmark 10-year Treasury yields also rallied -9.2bps from their intraday highs to close -6.7bps lower on the day at 2.554% which is the first time that we’ve seen Treasuries with a 2.5%-handle since January 17th last year. Two-year yields declined -9.0bps to trade below the fed funds rate for the first time since October 2008. The curve steepened slightly to 17.3bps however the 2s5s curve touched a new cyclical low of -4.4bps before retracing to end the session 1.0p lower at -2.3bps. Meanwhile, Gold benefited from the risk off tone to close up +0.75% while Copper shed -2.10%.

The good news is that sentiment has improved in Asia overnight with the Hang Seng (+1.41%), Shanghai Comp (+1.81%) and Kospi (+0.60%) all up as we go to print. The Nikkei (-2.82%) is sharply lower however is playing catch up after markets in Japan were closed for holidays. That news we mentioned earlier about China and the US planning to meet appears to be helping the more constructive tone, as is the stronger than expected Caixin services PMI out of China this morning (53.9 vs. 53.0 expected) and news that China will strengthen its counter-cyclical macro policy adjustment and cut taxes and fees to support small and private companies. Meanwhile, US futures are also up (+0.51%) after the new US House Democratic majority voted to end the partial government shutdown. This still needs to be taken with a pinch of salt as Congress is no closer to resolving the impasse over President Donald Trump’s demand to pay for a border wall.

Brexit headlines are also back with the Telegraph reporting that a YouGov poll of Tory members found that in a three-way referendum, 57% of them would prefer to leave the EU with no deal, 23% would choose Prime Minister Theresa May’s deal and 15% would choose to remain in the EU. Interestingly, if the options are down to two i.e., May’s deal or no deal, only 29% of Tory members said they would vote for May’s deal, while 64% said they would vote to leave without a deal, with the remainder undecided. The poll also found 59% of Tory members are opposed to the current EU Withdrawal Agreement, with just 38% supporting it and the rest unsure.

Back to yesterday, where that ISM manufacturing print that we noted above came in at 54.1 compared to expectations for 57.5 and a reading of 59.3 in November. So that is now the lowest reading since November 2016 and the biggest one-month drop since October 2008. The blame game laid with the new orders component which fell a staggering -11pts to 51.1 and the lowest now since January 2016. The employment component slid a comparatively more palatable -2.2pts to 56.2 while the prices paid component fell -5.8pts to 54.9 and to the lowest since June 2017. The associated statement also highlighted that six industries reported a contraction in December and that “growth appears to have stopped” and “resources are still focused on re-sourcing for US tariff migration out of China”. Trade issues were highlighted numerous times.

The big question now is: what will the Fed do, and could we see them start to shift further from their tightening stance to one closer to neutral? DB’s Alan Ruskin made an important point yesterday though which is that while the latest ISM reading looks weak relative to recent past, it is still consistent with above trend rates of growth. Clearly though, the market will be super sensitive to the next round of data and especially the first round of January prints to see if there’s further downward momentum (US economic surprises are at 16-month negative levels now). It’s worth noting that the market has become so sceptical about the Fed that we’re now down to -18bps of cuts in 2019, or in other words a 75% chance of a full cut. That compares to over 2 hikes that were being priced in for 2019 at the peak in November. So it’s been a remarkable shift in sentiment.

It’s apt timing then that today we’re got a couple of potentially pivotal events to look forward to. Will the final employment report for the US in 2018 change the tide today, extend the pain, or will markets shrug it aside? The main focus should be on the earnings figure with the consensus currently pegged at a +0.3% mom average hourly earnings print for December with base effects expected to lower the year-on-year reading to +3.0%. That matches the forecasts of our US economists and they also expect average weekly hours to kick up a tenth 34.5 hours. Interestingly they note that this would imply a very healthy +4.9% annual pace of nominal income growth and is one reason why they believe bond market participants may be underappreciating the Fed’s ability to further hike rates this year. As for payrolls, the market is at 180k (vs. 155k in November) while our house view is for 175k. Our team believe that this will be sufficient to lower the unemployment rate to 3.6%.

Shortly after that, Fed Chair Powell is due to take part in the American Economics Association annual meeting along with former Chairs Yellen and Bernanke at 3.15pm GMT. We’re not expecting Powell to break any new ground but it will be worth seeing if he reiterates the message made by NY Fed President Williams when he flashed out in more granular detail in the Fed’s messaging in the December statement, specifically addressing the slight tweak in forward guidance. Clearly any comments around recent market volatility and also yesterday’s ISM report will be closely watched too.

Speaking of the Fed, yesterday we heard from Dallas Fed President Kaplan. Although a non-voter this year, Kaplan advocated for the Fed to take a pause on the tightening cycle “in the first couple of quarters this year” and also added that “my base case would be no action at all”. Kaplan cited the softer global growth outlook, deceleration in interest-rate sensitive sectors, and tighter financial conditions as evidence that a pause is warranted. He also mentioned “there are a number of things we could do” to slow the pace of balance sheet normalization, but stressed that “I’m not there yet.” It’s worth noting that Kaplan has been slightly more dovish that the centre of the committee and also has previously highlighted concerns from some of the signals from markets including the recent flattening in the curve. So although dovish the tone wasn’t a complete surprise.

Jumping ship, in today’s EMR we’ve updated our equity versus PMI charts and table which you can find in the PDF in which we regress PMIs versus year over year changes in equity markets. This follows the latest round of PMIs in Europe and China and the ISM reading in the US. The numbers make for fairly eye watering reading now. While PMIs have dropped from their highs fairly significantly, the plunge in equity markets has far outweighed this and in fact we’re pricing in implied PMIs of between 42.3 and 45.6 in Europe, 43.6 in the UK, 46.0 in China and an ISM of 46.6 in the US. Indeed on this basis equity markets are 18% ‘cheap’ in the US, between 11% (Italy) and 25% (Germany) cheap in Europe and 30% cheap in China. As we always say with this the data it is intended as a guide and best to look over a longer period of time rather than for a particular point but it still makes for an interesting read-through.

Back to yesterday, where for completeness, it wasn’t much better for markets in Europe although bourses did at least hold out better than US markets. The STOXX 600 finished -0.98% while the DAX and CAC were -1.55% and -1.66% respectively. HY cash spreads were +10bps wider while Crossover was +12bps wider. Senior and sub financials also got hit to the tune of +6bps and +14bps respectively. Meanwhile Bunds closed at 0.150% and the lowest since November 2016 while the risk off moves appeared to hit BTPs (in addition to news that Banca Carige was going into administration) where yields rose +16.8bps and the most since September.

Wrapping up the other data that was out yesterday, mortgage applications fell -8.5% last week to their lowest level since 2000. The ADP employment report showed a net increase of 271k jobs last month, more than the 179k expected though the November figure was revised down by 22k. Initial jobless claims ticked up +15k but remain near their cyclical lows. In the UK, the construction PMI softened to 52.8 from 53.4.

Finally to the day ahead, where the highlight no doubt comes this afternoon with the aforementioned US employment report. Prior to that though we get the final December PMIs (services and composite readings) in Europe including a first look at the data for the non-core and UK, as well as the preliminary December CPI reading in France, Italy and the Euro Area. For the latter, the core is expected to hold steady at +1.0% yoy but the headline decline three-tenths to +1.7% yoy as a result of the oil price move. We’ll also get November money and credit aggregates data in the UK. Meanwhile, also out in the US this afternoon are the final December PMIs. A final reminder that Fed Chair Powell speaks today along with Yellen and Bernanke, while the Fed’s Barkin also speaks later this evening.

 

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 50.51 PTS OR 2.05% //Hang Sang CLOSED UP 561.67 POINTS OR 2.24% /The Nikkei closed DOWN 452.81 POINTS OR 2.26% / Australia’s all ordinaires CLOSED DOWN 0.31%

/Chinese yuan (ONSHORE) closed UP  at 6.8649 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 47.92 dollars per barrel for WTI and 57.03 for Brent. Stocks in Europe OPENED GREEN 

//ONSHORE YUAN CLOSED UP AT 6.8649 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8775: 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER 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/

China is in deep trouble especially after last weeks’s terrible PMI numbers. Today they announced a RRR cut as liquidity is drying up.  However the cuts will occur only on Jan 15 and Jan 25 to offset liquidity concerns prior to its New Year..  It is business as usual for China

(courtesy zerohedge)

 

China Announces RRR Cut Plans To Cover Lunar New Year Liquidity

US equity futures extended gains in a kneejerk reaction to headlines proclaiming China cutting the reserve requirement ratio.

The headline looks impressive…

  • CHINA CUTS BANK RESERVE RATIO BY 1 PERCENTAGE POINT

And the algos liked it…

However, two points make this less exciting “stimulus” news than we suspect the narrative will proclaim.

First is that, according to a statement from the central bank, the RRR cuts of 0.5 percentage point each will occur on Jan. 15 and Jan. 25 in a move to offset liquidity fluctuations ahead of Chinese Lunar New Year.

  • PBOC says the RRR cuts to replace medium-term lending facilities maturing in 1Q
  • PBOC says it will continue prudent monetary policy and won’t flood economy with liquidity
  • PBOC says move to boost financial support for small and private companies
  • PBOC to ensure reasonable growth of credit and aggregate financing
  • PBOC to stabilize macro leverage ratio

In other words this is ‘business as usual’ monetary injection to cover an increasingly panicked financial system dry of liquidity.

And second is that, recent previous monetary and fiscal easing efforts have utterly failed to generate any material economic activity pick up. As we noted previously, since June 2018, China has been loosening monetary and fiscal policies in an attempt to refloat the sinking red ponzi amid the shadow banking system’s deflation.

As the following chart from Goldman Sachs shows, it is not working as the Current Activity Indicator continues to slump…

It seems no matter what China throws at it, the economy (or the market) won’t behave as the text-books say it should.

As Goldman previously concludedThere are reasons to be concerned [that easing is becoming less effective]...”

end
Not good if any Canadian wishes to visit China.  Beijing has detained 13 Canadians since the arrest of Meng
(courtesy zerohedge)

Beijing Has Detained 13 Canadians Since Arrest Of Huawei CFO

When the US published its latest travel advisory warning its citizens about the “arbitrary law enforcement” risks they could face in China (and offering a list of recommended precautions for those obstinate enough to ignore the government’s warnings), some wondered, why now? With trade negotiations set to begin in earnest next week, one would think that the US wouldn’t want to kick the hornet’s nest (though, in fairness, the DOJ’s steady stream of indictments against Chinese government-sponsored hackers have continued, as has the prosecution of Huawei CFO Meng Wanzhou).

Well, Canada’s Globe and Mail might have just answered that question by confirming that the Beijing’s suspected retaliation against Ottawa over Meng’s arrest has been even more severe than previously believed. According to the paper, 13 Canadians have been detained in China since Dec. 1 – the day Meng was arrested by Canadian authorities after landing in Vancouver.

SK

Spavor and Kovrig

Until now, the arrests of only three Canadians – those of businessman Michael Spavor, former diplomat Michael Kovrig and teacher Sarah McIver (who has been deported) – had been publicly known.

Fortunately, eight of the 13 detainees have been released. And the Canadian government has so far refused to confirm the identities of the other 10.

But still, the report begs the question: Why has Justin Trudeau’s government been so reluctant to issue a travel advisory of its own, as conservative lawmakers have been urging him to do?

Global Affairs Canada spokesman Guillaume Bérubé said in a statement to The Globe and Mail that the government is aware that 13 Canadians have been detained in China, excluding Hong Kong, since Dec. 1, 2018. Previously, only Michael Kovrig, Michael Spavor and Sarah McIver were publicly known to have been detained in China since Canada arrested Ms. Meng, chief financial officer of Huawei Technologies Co. Ltd. They were taken into custody after China promised retaliation for Ms. Meng’s arrest.

Mr. Bérubé said in the statement that at least eight of the 13 have been released. Global Affairs Canada did not disclose the identities of the other 10 Canadians.

Meanwhile, a top Chinese prosecutor said this week that Spavor and Kovrig had “without a doubt” violated laws pertaining to national security – though some suspect that this is merely a ruse to hold them in custody, since Chinese law offers broad latitude to authorities when it comes to issues of national security. McIver has been released and returned to Canada, but that’s all that is known about the releases.

All told, some 200 Canadians are involved in some form of legal proceedings in China for a variety of alleged crimes and infractions – including one man who has been accused of smuggling “an enormous amount” of drugs into the country. Many are out on bail or on probation. Over the years, the number of Canadians detained in China has remained relatively constant (by comparison, some 900 Canadians are being held in US jails).

But that doesn’t mean the recent spike in arrests isn’t troubling.

As Tory lawmakers push for Canada to issue a travel advisor of its own, some report hearing anecdotal evidence about a spike in detentions of westerners in China.

The Conservatives are urging the government to issue a new travel warning for China in light of the detentions on Dec. 10 of Mr. Kovrig, an analyst for the non-profit organization International Crisis Group, and Mr. Spavor, who owns an organization that brings visitors to North Korea.

Tory foreign affairs critic Erin O’Toole said he is concerned China is also using “administrative harassment” of Canadians, such as Ms. McIver, as retaliation. He said he is hearing from parents who are anxious about adult children teaching in China.

“In one case, there was a mother speaking to me about her son who had seen some other Western-looking teachers picked up by authorities on the street. Now, I have no idea if those were Canadians, but this was a son telling his mother, ‘I’m a little concerned about what I see to be a bit more of a security interest in westerners,'” Mr. O’Toole said.

And rightfully so. China has likened Meng’s detention to a kidnapping and has warned Ottawa to “prepare for escalation.”

In its travel advisory, the US warned about Beijing’s tendency to issue “exit bans” for foreigners without informing the target – sometimes they don’t learn of the ban until they try to leave China and are stopped at airports or the border.

It’s just the latest reason why any Westerners living or traveling on the mainland might want to considering getting out of Dodge.

END

this will certainly get under the skin of Xi:  the senate seeks an aggressive clamp down on Chinese tech espionage.  This is a good part of their business

(courtesy zerohedge)

Senate Bill Seeks Aggressive Clamp Down On Chinese Tech Espionage

After top FBI officials testified before the Senate Judiciary Committee last month that Chinese espionage poses the “most severe” threat currently facing American security, and after greater scrutiny of major Chinese telecommunications that had before operated with seeming impunity in the US like Huawei Technologies Co. and ZTE Corp.  especially following the arrest of Huawei’s CFO Meng Wanzhou and others in Canada — senators are now proposing a bill to combat technology threats from China.

Senators Mark Warner and Marco Rubio during a previous press conference on Russian election meddling. via GettySenators Mark Warner and Marco Rubio are co-sponsoring legislation that seeks to counter the risk of state-sponsored technology theft by establishing an “Office of Critical Technologies and Security” overseen by the White House. The bill would add greater teeth and oversight to current Trump administration efforts to quash Chinese attempts at stealing technology secrets from US firms, which often also involves supply chain infiltration at foreign manufacturing sites, following a related bill signed into law last August which attempted to strengthen a panel that reviews foreign-based investments in the US for national security risks, but which was widely viewed as “watered down” when it came to China.

Mark Warner (D-VA) described, “It is clear that China is determined to use every tool in its arsenal to surpass the United States technologically and dominate us economically.” Continuing his Friday statement, he said, “We need a whole-of-government technology strategy to protect U.S. competitiveness in emerging and dual-use technologies and address the Chinese threat.”

And Rubio (R-FL) specified the China tech theft threat as follows:

China continues to conduct a coordinated assault on U.S. intellectual property, U.S. businesses, and our government networks and information with the full backing of the Chinese Communist Party.

Rubio added, “The United States needs a more coordinated approach to directly counter this critical threat and ensure we better protect U.S. technology.”

This follows months of multiple major instances of China caught in brazen acts of theft of American technology and trade secrets, though which only very slowly picked up steam in the mainstream media.

Trump has consistently blasted China’s “unfair trade practices” which includes stealing US intellectual property as the “cost of doing business” with Beijing. The issue has sent tensions soaring amidst a trade war that’s already disrupted the flow of hundreds of billions of dollars worth of goods, potentially slowing growth.

Last month Presidents Trump and Xi Jinping called for a truce in their escalating trade war following a sideline meeting at the G20 summit in Buenos Aires, and starting early next week the two sides are set to hold governmental trade talks in Beijing (Jan 7-8).

4.EUROPEAN AFFAIRS

/EMU

The European Monetary Zone is generally a good manufacturing producer led by Germany etc.  Today the Eurozone PMI slipped to almost contraction, coming in at 51.1 in December, its weakest report in almost 4 years;

(courtesy zerohedge)

Eurozone PMI Plunges To Four Year Lows

US, China, and now European composite PMIs have all tumbled in December with Eurozone PMI slipping to 51.1 – its weakest in four years

Growth in manufacturing and services slowed more than initially reported in December – weighed down by public protests in France, Germany’s continued struggles in the car industry, and renewed weakness in Italy. Composite gauges for output expectations and new orders were the worst since late 2014.

Under the hood, the European nations are highly varied (from best to worst):

  • Ireland: 55.5 (9-month low)
  • Spain: 53.4 (3-month low)
  • Germany: 51.6 (66-month low)
  • Italy: 50.0 (3-month low)
  • France: 48.7 (49-month low)

Chris Williamson, Chief Business Economist at IHS Markit said:

The eurozone economy moved down another gear at the end of 2018, with growth down considerably from the elevated rates at the start of the year. December saw business activity grow at the weakest rate since late-2014 as inflows of new work barely rose. Levels of unfinished business are now falling for the first time in nearly four years as previously-received orders are not being fully replaced with new work.

“While a drop in business activity in France could be partly blamed on the ‘yellow vest’ protests, the rest of the region lacks any such mitigating factors, albeit with the recent weakness of the autos sector hopefully a temporary set-back.

Importantly, with expectations of output dropping to the lowest for over four years, companies are not anticipating any imminent revival in demand. Worries reflect multiple headwinds from trade wars, Brexit, heightened political uncertainty, financial market volatility and slower global economic growth.

“Employment growth has already taken a knock as companies take a more cautious approach to hiring in the face of weaker order books. Jobs growth has hit a two-year low.

Better news came in the form of an easing in price pressures to the lowest for over a year, which should provide some breathing space for the European Central Bank to review its policy guidance.”

Finally, Williamson confirms this survey signals weakness ahead…

“The data are consistent with eurozone GDP rising by just under 0.3% in the fourth quarter, but with quarterly growth momentum slowing to 0.15% in December.

How long before Draghi reverses to easing again?

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

IRAN/USA

This no doubt will alarm Mike Pompeo and Trump:  Iran to upgrade its speedboats in the Gulf with stealth technology as they want to encounter the uSA Navy in the Gulf.

(courtesy zerohedge)

Iran’s Navy Plans To Upgrade Speedboats With Stealth Technology To Counter US Navy

Iran’s Islamic Revolutionary Guard Corps (IRGC) navy commander on Monday criticized the presence of US Navy warships patrolling the Persian Gulf and said the IRGC is preparing to upgrade its speedboats with stealth technologies and new missile launchers as tensions increase between Tehran and Washington near the Strait of Hormuz.

“The IRGC’s navy attaches great importance to high speed and maneuverability of its boats in the missions,” Alireza Tangsiri, the top IRGC Navy Commander, was quoted as saying by Press TV.

“We are planning to equip the IRGC’s speedboats with radar-evading stealth technology while increasing their speed in order to conduct their missions,” he said, adding that “new missiles moving at very high speed are being installed on the IRGC’s naval vessels.”

According to the Xinhua News Agency, the IRGC has some of the fastest speedboats in the world. Tangsiri said, “we are working on speedboats with the speed of 80 knots (148.16 km) (per hour) and beyond that.”

The IRGC commander pointed out that the arrival (Dec. 21) of the USS John C. Stennis, a nuclear-powered supercarrier, through the Strait of Hormuz of the Persian Gulf, was met with IRGC vessels shadowing the strike group.

Tangsiri said, “we are constantly monitoring them [US Navy] and have full command on these foreign forces” as they move through the Gulf.  “The presence of foreign forces in the region disturbs security, noting that regional countries are capable of guaranteeing their security through staging joint military maneuvers and boosting cooperation,” he added.

On Sunday, Chairman of the Chiefs of Staff of the Iranian Armed Forces Mohammad Baqeri said that the US is inciting new fears in the Gulf through its presence in the region.

“The Americans have always sowed insecurity wherever they had a presence,” Baqeri told reporters.

He stressed that the Gulf countries are capable of ensuring security on their own and the US presence in the region is creating more uncertainties.

Earlier in the weekend, Iran’s Foreign Minister Mohammad Javad Zarif said that US warships in the Gulf are “illegal.”

“Increased presence of Americans in the Gulf has always posed threats to the regional states,” he said.

The aircraft carrier arrived in the Gulf after Washington re-imposed sanctions on Iran’s oil exports in November and pulled out of the 2015 Iranian nuclear deal earlier in the year.

To make matters worse, the IRGC recently held a significant war drill in the Gulf, launching an “offensive” maneuvers against enemy forces for the first time.

During that drills, Deputy Chief of Iran’s Army for Coordination Habibollah Sayyari said that Iran would never allow US warships to sail near its territorial waters.

Besides, “they cannot take any measure against us, because we are so prepared and have enough capabilities to stand up to such a publicity stunt,” Sayyari said.

The Strait of Hormuz is the leading maritime route through which Persian Gulf exporters— Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates—ship their oil to international markets. The strait is roughly 21 miles across at its narrowest point, bordered by Iran and Oman.

The Energy Information Administration estimates that roughly 17 million barrels of oil per day, 35% of global oil exports, flows through the strait.

While crude has crashed more than 38% from the early October highs of 75, the probability of a geopolitical event in the Gulf has been elevated with not just the US Navy sailing warships through, but the idea that Iran is upgrading its speedboats with the intentions of starting a conflict with the US.

Perhaps, the new instabilities in the Gulf and around the Strait of Hormuz are all that is needed to have oil traders worry about the global oil choke point, and possibly lead to a bottoming in oil prices.

end

6. GLOBAL ISSUES

 

 

 

7  OIL ISSUES

8. EMERGING MARKETS

Venezuela

 

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

Euro/USA 1.1413 UP .0023 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 GREEN

 

 

 

 

USA/JAPAN YEN 107;99  UP 0.146 (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 1.2674     UP    0.0046  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3426 DOWN .0051 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 23 basis point, trading now ABOVE the important 1.08 level RISING to 1.1413/ Last night Shanghai composite CLOSED  UP 50.51 POINTS OR 2.05% 

 

 

//Hang Sang CLOSED UP 561.67 POINTS OR 2.24%

 

/AUSTRALIA CLOSED DOWN 0.31%  /EUROPEAN BOURSES GREEN

 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED DOWN 452.81 POINTS OR 2.26% 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED GREEN

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 561.67 POINTS OR 2.24% 

 

 

 

/SHANGHAI CLOSED UP 50.51 PTS OR 2.05%

 

 

 

 

Australia BOURSE CLOSED DOWN 0.31%

 

Nikkei (Japan) CLOSED DOWN 452.81 POINTS OR 2.26% 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1291.30

silver:$15.70

Early THURSDAY morning USA 10 year bond yield: 2.60% !!! UP 4 IN POINTS from THURSDAY’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 2.94 UP 2  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 96.15 DOWN 16 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing FRIDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.81% UP 4    in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: -.04%  DOWN 4   BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.47% UP 4   IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.90 UP 3     POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 136 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.21%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.69% 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 FRIDAY

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

Euro/USA 1.1398 UP  .0007 or 7 basis points

 

 

USA/Japan: 108.41 UP  0.554 OR 55 basis points/

Great Britain/USA 1.2721 UP .0092( POUND UP 92  BASIS POINTS)

Canadian dollar DOWN 75 basis points to 1.3404

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed DOWN AT 6.8690-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.8659(  YUAN UP)

TURKISH LIRA:  5.3379

the 10 yr Japanese bond yield closed at -.04%

 

 

 

Your closing 10 yr USA bond yield UP 7 IN basis points from THURSDAY at 2.66 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.98 UP 6 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, 96.19 DOWN 12 CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 12:00 PM 

London: CLOSED UP 144.76 OR 2.16%

German Dax : CLOSED UP 351.03 POINTS OR 3.37%

Paris Cac CLOSED UP 125.63 POINTS OR 2.72%

Spain IBEX CLOSED UP 214.50 POINTS OR 2.52%

Italian MIB: CLOSED UP 613.39 POINTS OR 3.37%

 

 

 

 

WTI Oil price; 47.98 12:00 pm;

Brent Oil: 57.02 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    67.66  THE CROSS LOWER BY 1.19 ROUBLES/DOLLAR (ROUBLE HIGHER BY 119 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3379 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.21 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 :48.16

 

BRENT :57.24

USA 10 YR BOND YIELD: 2.66%….deadly/ the huge volatility is killing the derivative players.

 

 

USA 30 YR BOND YIELD: 2.97%/.deadly/ same as above

USA 2 YR BOND YIELD: 2.49% deadly..same as above

 

 

 

EURO/USA DOLLAR CROSS: 1.1397 ( UP 7 BASIS POINTS)

USA/JAPANESE YEN:108.46 UP 0.610 (YEN DOWN 61 BASIS POINTS/..deadly to yen shorters

.

 

USA DOLLAR INDEX: 96.17 DOWN  13 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA: 1.2733 up 105 POINTS FROM YESTERDAY

the Turkish lira close: 5.3279

the Russian rouble:  67.95 UP .91 Roubles against the uSA dollar.( UP 91 BASIS POINTS)

 

Canadian dollar: 1.3402 UP 77 BASIS pts

USA/CHINESE YUAN (CNY) : 6.8692  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.8669 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.21%

 

The Dow closed UP 746.94 POINTS OR 3.29%

 

NASDAQ closed UP 275.36 POINTS OR 4.26%

 


VOLATILITY INDEX:  21.47 CLOSED DOWN 3.98 

 

LIBOR 3 MONTH DURATION: 2.795%  .LIBOR  RATES ARE RISING/

 

FROM 2.794

 

 

 

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

 

Stocks Soar On Powell Promise, Jobs Juice

One day after a broad-based, stomach-churning drop in the market, the result of rising economic fears following Apple’s revenue guidance cut and a plunge in the ISM manufacturing index coupled with jitters over the latest FX-market flash crash, stocks staged a powerful comeback, recouping all of their Thursday losses, on the back of renewed optimism over US trade negotiations with China, a Chinese RRR cut and a powerful intervention by Beijing’s plunge protection team in Chinese stocks, and a stellar jobs report.

“The strong December jobs report is a net positive for stocks because investors’ biggest concern has been slowing growth,” said FTSE Russell managing director Alec Young. “December’s strong job gains help ease that concern. It’s hard to square recession worries with the strongest job growth we’ve seen in years” Young added after payrolls not only surged by over 300K but average hourly earnings surprised to the upside and rose by the most since 2009, signalling that inflation is anything but dead.

But the biggest catalyst for today’s rally was today’s statement by Chairman Powell which eased much of the market’s fears that the Fed put is dead and buried.

Speaking on a panel with Janet Yellen and Ben Bernanke, Powell said central-bank policy is flexible and officials are “listening carefully” to the financial markets. Critically for traders worried about shrinking liquidity in the economy, Powell also signaled a willingness to consider changes to the Fed’s gradual run-off of its balance-sheet in any policy review.

That was enough to unleash the animal spirits, with stocks surging after Powell’s comments which many saw were directed squarely at the market.

“The Powell/Yellen/Bernanke show had a simple purpose: re-assure the market that the Fed is not in disarray and that it will act to protect the market on a further downtick than what we saw in December,” WallachBeth strategist Ilya Feygin told Bloomberg. “The Fed will likely keep rates on hold for a while until it has more confidence in the data.”

And while Powell  wasn’t explicitly dovish, the fact that he wasn’t hawkish was more than enough to unleash a powerful rally that sent the Dow over 800 points at one time, undoing all of Thursday’s losses…

…with the S&P rising over 3% and back above 2,500, the Nasdaq rising almost 5%, and most other sector also solidly in the green on what has nonetheless been a relatively low-volume rally.

While today’s rally will be a welcome – if temporary – relief to bulls, and certainly to president Trump who delights in a rising stock market which he sees as a barometer of his performance, the unprecedented volatility in the market now appears to be a constant feature with the the S&P 500 now trading in an intraday range of more than 2% on 15 of the last 21 days, the most since 2011 according to Bloomberg. Whether anyone other than algo traders can “trade” such a rollercoaster market remains to be seen.

The surge in stocks, driven by a dovish take on Powell, also helped push Treasury yields sharply higher…

… with the yield on the 10Y rising the most in percentage terms in two years.

Curiously, even as selling of equity volatility returned with a bang, with the VIX tumbling to the 20 level which has been the average for much of the past three months…

… bond market volatility as measured by the MOVE index has been far stickier, in what may prove to be a bigger headache for the Fed unless it is somehow able to stabilize the jittery nerves of bond traders.

One surprising outlier that was missing from today’s euphoria, however, as the dollar continued its recent slide, and after it initially spiked following the strong jobs report, it then tumbled after Powell’s dovish comments despite the powerful rally in Treasury yields.

According to some this odd weakness in the dollar was the result of a fund rotation into carry currencies, with the Bloomberg EM Carry Index reaching its strongest level since July, in the process undoing all of the carry trade “flash crash” pain from late on Wednesday.

Another surprising tangent is that even with the dollar plunge, gold tumbled and was down sharply on the day if off the lows, even after gold futures hit $1300 overnight. One explanation is that gold was not responding to the dollar as much as to the unwind of the “flight to safety” trade. However, even with today’s drop, gold is back to levels last seen back in June.

And while they did nothing for gold, Powell’s dovish reversal and the plunge in the dollar did help boost the commodity sector, and oil especially, which has continued its impressive move higher after a powerful, if unexplained, move on Wednesday sent WTI surging, with the levitation continuing ever since.

Finally, even with Friday’s surge, the market gains did little to dent the recent rout that has hit global equities in the past month, with major indexes off well over 10 percent from previous highs and the S&P on the verge of a bear market as recently as ten days ago. Meanwhile, in a sign that fears about a slowdown persist, treasury yields that topped 3.2% two months ago are now 60 bps lower as investors reassess the prospects for growth in 2019.

Finally, before traders read too much into today’s rally, recall what Trump’s economic advisor Kevin Hassett warned yesterday, namely that “it’s not going to be just Apple,” adding that “there are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”

For now, however, at least until the next major bearish surprise, stocks close out the day and the week with a powerful rally that has, at least for the time being, put concerns about an imminent US recession on mute

 

END

market trading/JOBS REPORT

No doubt about it: a phony jobs report:  they state that payrolls rose by 312,000 and that will probably give Powell the signal to continue with his crazy rate hikes

(courtesy zerohedge)

Jobs Blowout: December Payrolls Soar By 312K As Wages Jump Most Since 2009

In our preview of the December payrolls report, we said that the big risk is a big upside surprise in the form of “good news being bad news”, and sure enough, and that’s precisely what happened when the BLS reported that in December the US added a whopping 312K jobs, far above the 184K expected, and the highest since February 2018. The total number of payrolls surged above 150 million for the first time ever, to 150.263 million to be specific.

Meanwhile, November’s print  was revised up from +155,000 to +176,000, and the change for October was revised up from +237,000 to +274,000. With these revisions, employment gains in October and November combined were 58,000 more than previously reported. After revisionsjob gains have averaged 254,000 per month over the last 3 months.

Putting the number in context, this was the biggest beat since June 2016… which may not be such a good thing as the last 2 big beats both saw a big plunge the next month.

Looking at some sectors:

  • Oil and gas extraction payrolls rose 10,200 from a year earlier.
  • Gasoline stations payrolls rose 1,300 in Dec. after rising 1,800 in Nov.
  • Pipeline transport payrolls fell 200 in Dec. after falling 200 in Nov.
  • Petroleum and coal payrolls rose 1,300 in Dec. after falling 1,100 in Nov.

It wasn’t just the scorching payrolls number, but also the average hourly earnings print, which jumped by 3.2%, higher than both the November 3.1% and the 3.0% consensus; in fact it was the highest number since April 2009!

The unemployment rate rose from 3.7% to 3.9%…

… as the labor force participation rate rose above 63% for the first time since March 2014.

Commenting on the rise in  unemp. rate, Bloomberg economist Yelena Shulyatyeva said that “the increase in the unemployment rate was entirely driven by rising participation, testament to the strong economy and robust labor-market attracting people from the sidelines.”

Some more details from the report:

  • Payroll employment rose by 2.6 million in 2018, compared with a gain of 2.2 million in 2017.
  • Employment in health care rose by 50,000 in December. Within the industry, job gains occurred in ambulatory health care services (+38,000) and hospitals (+7,000). Health care added 346,000 jobs in 2018, more than the gain of 284,000 jobs in 2017.
  • In December, employment in food services and drinking places increased by 41,000. Over the year, the industry added 235,000 jobs, similar to the increase in 2017 (+261,000).
  • Construction employment rose by 38,000 in December, with job gains in heavy and civil engineering construction (+16,000) and nonresidential specialty trade construction (+16,000). The construction industry added 280,000 jobs in 2018, compared with an increase of 250,000 in 2017.
  • Manufacturing added 32,000 jobs in December. Most of the gain occurred in the durable goods component (+19,000), with job growth in fabricated metal products (+7,000) and in computer and electronic products (+4,000). Employment in the nondurable goods component also increased over the month (+13,000). Manufacturing employment increased by 284,000 over the year, with about three-fourths of the gain in durable goods industries. Manufacturing had added 207,000 jobs in 2017.
  • In December, employment in retail trade rose by 24,000. Job growth occurred in general merchandise stores (+15,000) and automobile dealers (+6,000). These gains were partially offset by a job loss in sporting goods, hobby, book, and music stores (-9,000). Retail trade employment increased by 92,000 in 2018, after little net change in 2017 (-29,000).
  • Over the month, employment in professional and business services continued to trend up (+43,000). The industry added 583,000 jobs in 2018, outpacing the 458,000 jobs added in 2017.

So what does the Fed do now: pressured on both sides, on one hand by the sliding market which demands rate cuts, and on the other by the overheating labor market where wages appear to be on the verge of breaking out.

To be sure, as BBG’s Steve Matthews notes, it’s not a clear cut picture:

For the Fed, it was extremely unlikely there could be any possible move until March given its commitment to gradual rate hikes. So while today’s jobs report will be closely monitored by the central bank, the actual impact on policy seems pretty low. That’s because we’ll have gotten January and February employment updates by then, plus revisions to December.

By then, the Fed should know whether the most disturbing recent signals — such as the ISM report — are being reflected in the labor market, and the FOMC will know whether markets have continued to slide or have recovered some.

Hopefully we get the answer from Jay Powell in just a few hours when he speaks later this morning.

end
The strong job reports sends stocks and the dollar higher with gold lower .  Now a rate cut odds disappears
(courtesy zerohedge)

“Yuuge” Jobs Sends Stocks, Dollar Higher As Rate Cut Odds Slide

US equity futures were initially disappointed by the great jobs print, but algos quickly BTFD to ensure good news is good news again.

 

However, the market’s dovish positioning was unwound with a lower expectation of a rate cut now priced in…

 

Which sparked a bid in the dollar…

And pushed Treasury yield back above the Fed Funds rate..

Interest-rate markets are reacting to strong U.S. jobs number with caution, said George Goncalves, head of Americas fixed income strategy at Nomura Securities.

Bonds “will keep an eye on stocks and although this number is very strong — and against all of the recent negativity — the skeptics will discount this as potentially being backward looking,”he said.

Market is looking to Fed Chairman Jerome Powell’s appearance later Friday for further guidance

“This definitely sets the stage for Powell not coming out too dovish,” Goncalves noted by email.

“So markets will not sell-off fully until he speaks – but if he is balanced/less dovish – this sell- off should continue.”

Bloomberg economist Tim Mahedy said:

“This is the strongest employment report of this economic cycle — hands down.”

The big question is – will Powell be able to talk the “good news” hawkishness back down?

end
Today the hourly rate increased and that is sending a bad signal to the markets namely because profits will be hit
(courtesy zerohedge)

The One Bad Thing About Today’s Jobs Report…

While on the surface today’s blockbuster jobs report was “goldilocks” in almost every possible way, if clearly negating a “recession is coming” narrative and crushing any hopes for an imminent rate cut (with Powell on deck expected to provide more clarity), there was one negative message for stocks, namely the fastest increase in wage growth since 2009.

Why are rising wages – which is a welcome development for America’s record 156,945,000 employed workers – potentially bad news? Because as Bloomberg’s Anchalee Worrachate notes, “it’s a threat to the corporate profit outlook, and equities globally, if the experience of Apple’s revenue forecast cut was anything to go by.”

Indeed, as the following chart from Morgan Stanley shows, in 2019 consensus expects profit margins to post a 3rd consecutive year of expansion. Should wage growth persist at this rate, this number will have to be revised lower. Sharply.

Explaining further, Worrachate notes that “while U.S. corporate profit margins hit 11.2% last year, the highest in at least 18 years, rising wages in a tighter jobs market are a real threat. Especially in the context of higher rates, and an economic slowdown that may keep companies from being able pass on the rising costs to consumers.”

It’s not just rising wages, of course – rising tariffs also threatens to put a cap on profits. According to HSBC, the current 10% tariffs could take away just 1% of index earnings. Of course, if trade talks on Monday produce no progress –  and eventually lead to an even higher, 25%, tariff imposed on all Chinese products, this would wipe a total of 4.5% points from U.S. earnings growth this year.

In other words, what’s great for America’s workers is bad for the stock market. For now, however, the algos that are in charge of the S&P500 this morning have yet to figure that out.

end

I believe that this job report is a big bunch of crap: the December number includes that a huge 181,000 new jobs were created in the 55 yr old and higher bracket..while the younger sector saw a loss of  11,000 jobs…and the hourly rate goes higher//with WalMart greeters?

the report is a phony

(courtesy zerohedge)

 

Only Old Workers Found Jobs In December

Two things stood out in the December jobs report: first, the magnitude of the monthly increase in payrolls, which at 312K was the highest in 10 months and second, the stark increase in annual wage growth.As Reuters Jeoff Hall notes, 12 of the 15 major industry sectors (4 in goods-producing, 11 in service-providing) have 12-month growth rates in avg hourly earnings that exceed the Fed’s 2.0% inflation target (with exceptions being Transportation & Warehousing (+0.7%), Nondurable Gds Mfg (+0.9%), Other Services at +1.8%).

However, reading between the lines reveals another somewhat unpleasant signal and may explain the impressive wage growth: the bulk of jobs in December went to aged workers, those 55 and older, who increased by 183K (according to the Household Survey). Meanwhile, the prime age group, those aged 25-54, actually declined by 11K in December. And since it was the younger age cohorts that saw virtually no job growth in December – i.e., those workers who have the least wage negotiating leverage – it explains the impressive wage growth, but it is also a potentially troubling indicator as it confirms that employers are primarily focusing on hiring those workers who already have experience, instead of permitting younger entrants to join the labor force.

How does the data look on an annual basis, from December 2017 to December 2018: a little better, with the biggest age cohort, those 25-54 rising by 1.3 million, but it was once again the oldest workers, those 55 and older that have seen the bulk of job gains in the past year, confirming that younger Americans are having an increasingly harder time to find jobs when they are, well, competing with their parents, who have been unable to retire as a result of ten years of ZIRP which in turn crushed savings for an entire generation of (elderly) Americans, forcing them to stay in the job market well beyond their retirement age.

end
This causes markets to soar:  Powell is listening carefully to markets. It does not matter..he will
raise rates anyway…the phony jobs report was good cover for him
(courtesy zerohedge)

Powell “Listening Carefully To Markets”, Sends Stocks Soaring

After briefly spooking markets briefly with an optimistic readout of how awesome the economy is, Fed Chair Jay Powell gave stocks just what they wanted, when in a stark departure from his December FOMC speech, the Fed chair said that Fed policy can change and is “prepared to adjust policy quickly and flexibly” while adding that “there is no preset path for policy”, confirmed that the Fed is “listening carefully to market.”

More importantly, Powell also said that the Fed would adjust the balance-sheet normalization policy “if needed” and if it becomes an issue for the market and economy: “We said that we would be prepared to adjust our normalization plans” and this would include the balance sheet.

That said, Powell also noted that “markets are pricing in downside risks” even as he sees no major risks in the economy.

And in an amusing tangent, Powell also said that he would not resign if Trump asked him to.

This is a distinctly different tone for Powell’s communication style – clearly signaling he got the message from markets that his hawkish pre-position perspective on halting asset bubbles is utterly useless once you get the role of Fed Chair – and stocks are soaring as the market welcome this “new” Powell who appears far more sympathetic to the pain being felt in risky assets.

And that helped send US equity markets back into the green for 2019.

market data/

The huge volatility is destroying our bankers.  They need slow movements up and down.  These huge rises in volatility with corresponding rise and fall in price is killing them as more collateral will be needed.

(courtesy zerohedge)

Bond Market Rocked As 10Y Yield Soars Most In Two Years

One day after a powerful, short-squeeze driven rally in US Treasurys, as a flight to safety pushed investors out of tumbling stocks and into the “safety” of bonds on Thursday, Friday has seen a dramatic U-turn, with the 10Y yield surging from a low of 2.54% to as high as 2.6712%…

… a 4.2% increase, which was the biggest one-day percentage gain in the 10Y yield in two years, or since a 4.5% jump in the 10Y yield on January 18, 2017.

What is remarkable about today’s TSY selloff is how coordinated it has been across the entire curve, which shifted almost entirely in parallel, with 2 year yields similarly rising the most in over a year as the market’s fascination with imminent rate cuts was put on the backburner.

The rebound in yields has pushed all tenors from 2Y to 5Y back above the 2.40 effective Fed Funds rate, a level all three TSY dipped below during yesterday’s violent rally. This comes as bats on a rate cut in 2019 have faded modestly despite today’s somewhat dovish comments by Powell which contrasted with the strong payrolls report.

Ironically, the violent reversal comes just days after investors plowed a near record $1.7 billion into the IEF iShares 7-10 Year Treasury bond ETF…

… and comes at a time of record government bond inflows.

 

USA ECONOMIC STORIES OF INTEREST

A very important commentary from Jeffrey Snyder.  He comments that the global economy is in big trouble and it is led by the USA.

The highlights two very important points:

  1. the Eurodollar futures curve
  2.  the oil price/contango/glut we are witnessing
  3.  the huge rise in the GC repo rate by an astonishing 300 basis points.

All 3 measures are indicating that the entire global growth is coming to a halt.  The Eurodollar curve futures are falling in the next few years out to 2021  This market is 11 trillion dollars and is almost impossible to manipulate.  Investors are voting with their money that interest rates will be falling because of lousy growth. The oil price contango indicates an oil glut caused by the very same lousy global growth. The huge rise in the GC repo rate by 300 points indicates a poor lack of collateral as the growth wanes.

a must read..

(courtesy Jeffrey Snider/Alhambra Investment Partners)

Alhambra: Nothing To See Here, It’s Just Everything

Authored by Jeffrey Snider via Alhambra Investment Partners,

The politics of oil are complicated, to say the least. There’s any number of important players, from OPEC to North American shale to sanctions. Relating to that last one, the US government has sought to impose serious restrictions upon the Iranian regime. Choking off a major piece of that country’s revenue, and source for dollars, has been a stated US goal.

In May, the Trump administration formally withdrew from the Joint Comprehensive Plan of Action, known otherwise as President Obama’s “Iran deal.” It was widely expected that pulling out would lead to harsh sanctions against any country continuing to trade using Iranian crude oil.

At the beginning of November, the US government formally re-instated those sanctions. In a surprising compromise, it did issue a number of waivers to countries like South Korea, Greece, Japan, and even China (among several others). That meant a good bit of Iran supply would remain available on global markets as a substitute source.

It is becoming 2018’s version of the 2014 “supply glut”, a benign or nearly so excuse for oil’s otherwise shocking crash. From Bloomberg only last week:

Just in late September, some traders were predicting that global oil prices would hit $100 a barrel over the following months. Their forecasts were based on the prospect of a supply crunch due to U.S. sanctions on Iran that went into effect in November. However, America’s surprise decision to grant waivers from its restrictions to some nations sparked a collapse in crude.

On the surface, the story does seem to check out; the US government did, in fact, keep Iran open for a little while longer. That additional future supply would have to have been factored into the ongoing oil price, further pressure to the downside.

But did it “spark a collapse in crude?” Nope, a demonstrable fallacy.

Oil prices peaked on October 3 and by the end of that month the curve was already weeks in contango. You could argue that global oil traders were counting on waivers and already factoring Iran into the equation, but again they were a “surprise decision.”

The drop in WTI and the chaos in oil markets (benchmark spreads) was more than a month old by then, and it’s been a straight line (almost) from the start of the crash.

In other words, Iran came along long after the market had viciously turned. Why is it so hard for people to accept that the problem could be rethinking demand worldwide?

It is, for many, impossible to believe that central bankers have it all wrong therefore the constant appeal of these sorts of ridiculous excuses. Mario Draghi says Europe is booming, or was, and if it isn’t now it’s only because of “transitory” factors to be cleared up soon enough. Jerome Powell can’t use the word “strong” frequently and emphatically enough in his commentary.

What do these guys know? A disorderly oil crash is uniformly associated with the opposite economic (and market) case. There is nothing benign about such open and obvious disorder.

It’s not just the oil warning, though; there has been a predictable proliferation of denial, in my estimation just a bit more intense than the last outbreak only a few years ago. This is related to 2017’s inflation hysteria, the very flipside to it.

The idea of “globally synchronized growth” was deeply emotional. So many just wanted to believe that the upturn was actual recovery, and that the global economy had finally hit a growth patch after a decade without any. People still cling to the idea that central bankers are the “best and brightest” and therefore all that was missing was sufficient time.

The technocracy could never be denied its success. One full decade seemed to be the max allowable, therefore 2018 just had to be the one.

Except, trading last year produced one big warning after another, these accelerating and growing noticeably in the last half particularly the last two months. Rather than take account for them all, the excuses are always limited to trying to discount each warning individually. That’s a big clue about what’s behind them; emotion not rational analysis.

These are pure rationalizations based on pure denial. The oil crash must be a supply glut, but what about that ungodly repo rate spike? Well that’s just 2a7 year-end window dressing (yes, thanks L. Bower, some are actually trying to dismiss a nearly 300 bps spread in GC repo as no big dealmere technicals).

So, why does that repo spike oddly connect to exactly what eurodollar futures are saying?

Or inflation expectations?

Swap and credit spreads?

UST futures (above) and the “strong worldwide demand for safe assets” that has intensified despite every major media outlet on earth declaring for more than a year how UST’s and German bunds are poised right on the precipice for a BOND ROUT!!!! of biblical proportions?

This is very comprehensive parade of deep, crucial markets all saying the same thing together – they really don’t know what they are doing. The world turned the wrong way (again), a surprise only to central bankers and those who still somehow believe in them.

That’s what always gets left out. Even if the repo spike, for example, was actually a product of 2a7, it still doesn’t get you to 300 bps. That level is alarming even in isolation. But it’s not in isolation, is it? You can’t (honestly) look at a market, even stocks, without appreciating corroboration and consensus for only darker and darker interpretations – all starting with liquidity meaning global money (including collateral flow).

If it was one thing you might listen about supply gluts or 2a7; when it’s everything, you can only ask yourself what’s the point? An unbiased review of all these markets (and more) paints a very grim view of where things already stand today. From this perspective, repo and WTI contango make perfect sense, neither really needing much explanation.

An oil crash or repo rate spike is intuitively self-explanatory, especially to these levels.

But Jay Powell is unshakable in his confidence. Therefore, Iran and supply glut. Or 2a7. Mixed signals. Etc. etc. etc. Nothing bad can ever happen, even all the bad things that keep happening.

SWAMP STORIES

Mike Pence on Tucker Carlson: shutdown will continue until the USA gets its wall funding

(courtesy zerohedge)

Pence: No Shutdown Deal Without Border Wall Funding

Vice President Mike Pence told Fox News‘ Tucker Carlson on Thursday that there will be absolutely no deal to end the government shutdown without funding for a border wall.

“Our focus is on border security. What we’ve completely focused on is keeping the President’s promise, to build a wall and to pass legislation that provides other support for border security,” said Pence.

Pence also said that Trump wants to negotiate, noting that “the better part of a year ago the President expressed a willingness to deal with the issue of dreamers in a compassionate way.”

That said, the bottom line is this according to the Vice President: “We will have no deal without a wall

Embedded video

Aaron Rupar

@atrupar

NOTABLE: Mike Pence leaves door open to some sort of “amnesty” for undocumented immigrants as part of border security deal to end shutdown.

“We will have no deal without a wall,” Pence adds, during interview with @TuckerCarlson.

end

The newly elected House defies Trump by voting to reopen government.  It has no wall funding so this was a total waste of time

(courtesy zerohedge)

House Defies Trump; Votes To Reopen Government With No Wall Funding

In what what can only be described as theatre, the Democrat-controlled House of Representatives voted late Thursday to pass two bills that would reopen parts of the government affected by the partial shutdown.

The only problem is that neither of the bills contain funding for what House Speaker Nancy Pelosi (D-CA) called an “inhumane” border wall – leaving Republicans and Democrats without any possible way forward during a Friday meeting at the White House following President Trump’s vow to veto any legislation that does not include money for perhaps his greatest election promise.

Trump will meet at 11:30 a.m. with Pelosi and House Majority Whip Steny Hoyer (D-MD) along with other congressional leaders, according to the Washington Examiner.

“We’ll go down there, we’ll talk,” said Hoyer on Thursday. “We’ll try to come to an agreement.”

That said, House Democrats held a Thursday afternoon hallway press conference where they took turns proclaiming how they would stand their ground against Trump’s wall.

We are not doing a wall,” said Pelosi – calling it “an immorality.”

Pelosi said the $5 billion Trump is requesting for the wall diverts money from other critical needs, although it is a tiny fraction of all federal spending. Still, she said the wall was a distraction put forward by President Trump who wants to shield his base from the negative impact of his agenda.

“It’s a wall between reality and his constituents, his supporters,” Pelosi said.

Shortly after Christmas, White House officials said they told Democratic leaders they would accept about half of their initial $5 billion request. But when asked about the offer, Pelosi suggested the Trump administration backed away from that idea.

“You can’t have an agreement that people walk away from,” she said. “Go to them and say, ‘Why don’t you stick to what you offered?'” –Washington Examiner

So at this point, tomorrow’s White House meeting looks like it will be a massive waste of everybody’s time – especially considering that Senate Majority Leader Mitch McConnell (R-KY) said on Thursday that he will not consider any House-passed bills that Trump won’t sign.

The two House bills would fund several agencies through September 30, and the Department of Homeland Security through Feb. 8. The DHS funding would give the agency $1.3 billion for border security which could not be used for Trump’s wall. Just five Republicans voted for the bill, while sevel GOP lawmakers supported the other bill funding the other agencies until the end of September.

Approximately 800,000 federal employees have been affected by the partial shutdown which began on December 23, representing around 25 percent of the federal government.

 

end

Trump threatens months sor years on keeping government closed unless he gets his wall;

(courtesy zerohedge)

Schumer: Trump Threatens To Keep Government Closed For “Months Or Years”

Following an 11:30 a.m. meeting in the White House with House Speaker Nancy Pelosi (D-CA), House Majority Whip Steny Hoyer (D-MD) and other congressional leaders, Pelosi and Schumer spoke outside the White House.

Speaking first, Pelosi said that the meeting with President Trump was lengthy and sometimes contentious. Senate Minority Leader Chuck Schumer (D-NY) meanwhile says Trump threatened to keep government closed for months or years.

President Trump is expected to speak next.

Watch (viewers can rewind to desired segment): 

end
Now Trump may declare a National Emergency to build the wall
(courtesy zero hedge)

Trump Says He May Declare National Emergency To Build Wall

Mere minutes after ABC News published a report claiming that the Trump Administration had considered declaring a national emergency to circumvent Congress and start construction on the rest of President Trump’s border wall, President Trump confirmed as much during a raucous White House press conference on Friday.

Trump

After saying that the federal government could use eminent domain to secure the land for the wall, Trump responded to a question about using his emergency powers to build the wall with a definitive “yes.”

“We can call a national emergency and build it very quickly,” Trump said.

According to the ABC News report, discussions about declaring a national emergency have been happening at “a working level” and that discussions have intensified as Democrats have continued to insist that they won’t approve any funding for a border wall, and Trump has insisted that he has no intention of capitulating. On Friday, Trump rattled anxious furloughed federal workers by saying the shutdown could persist for “months or years”.

Embedded video

NBC News

@NBCNews

WATCH: President Trump says he is considering declaring a national emergency as a potential attempt to circumvent Congress for border wall funding.

524 people are talking about this

The administration will reportedly hold meetings on Friday and over the weekend to discuss “next steps” for getting the wall built, despite Trump acknowledging that he had a “productive” and “very good” meeting with Democratic leaders on Friday.

Still, one of ABC’s sources said using the emergency powers would only be a partial solution.

One administration official described the current executive action under consideration as clearing the way for the construction of roughly 115 miles of new border wall strictly on land owned by DoD, which would make up roughly 5 percent of the more than 2,000-mile border.

[…]

“The President has some limited authority to direct the Department of Defense to build portions of the barrier along the southern border,” Tom Bossert, Trump’s former Homeland Security adviser and current ABC News contributor said. “Depending on what approach he takes, every option available to him comes with some structural constraints and will be met with congressional opposition and legal action — even the very rare emergency authority that has garnered debate this week. Unless Congress acts, there is seemingly a significant limit to the amount of wall Department of Defense could build.”

On another note, when asked about what furloughed government employees should do if the shutdown persists, Trump said those workers are “good for the money” and that many of those going without pay want him “to keep going” for the good of the country.

Trump tweeted last month that he could order the military to build the wall if Democrats wouldn’t cave, affirming that the wall would get built one way or another.

That did not take long: two members of the House are already demanding the impeachment of Trump. Brad Sherman re introduced his bill to impeach him

(courtesy zerohedge)

 

“Impeach The Mother-F**ker” – On First Day In Office, Muslim Congresswoman Slams Trump

One of America’s first two Muslim congresswomen has explained in succinct and direct words exactly what the new “most diverse ever” Congress’ goals are in the next session.

Just hours after being sworn in, Democratic Michigan Rep. Rashida Tlaib promised to go after President Trump, telling a group of left-wing supporters at a rally held by MoveOn near Capitol Hill, she would help Democrats “impeach the motherfucker.”

Embedded video

Barstool News Network@BarstoolNewsN

We got congresspeople out here calling the president a mother fucker

Interestingly, as The Daily Caller reported, new speaker Pelosi said in an interview on Thursday that she will withhold a decision on impeachment plans until special counsel Robert Mueller issues his report in the Russia investigation:

“Well we have to wait and see what happens with the Mueller report. We shouldn’t be impeaching for a political reason, and we shouldn’t avoid impeachment for a political reason. We just have to see how it comes.”

But, that did not stop her underlings from starting to ramp up the rhetoric, as Tlaib’s remarks came just after Democrats officially took over the House with Democratic California Rep. Brad Sherman already reintroducing articles of impeachment against Trump.

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

Democrat Rep. Reintroduces Articles of Impeachment against President Trump on First Day of 116th Congress   [For firing Comey, even though Trump has every Constitutional Right to do so.]

https://t.co/awBPnD09Fr

 

 

 

Confused Pelosi botches Speaker speech: ‘I think I skipped a couple of pages. I’m not sure.’

http://www.theamericanmirror.com/confused-pelosi-botches-speaker-speech-i-think-i-skipped-a-couple-of-pages-im-not-sure/

WaPo: Russia has formally charged Paul Whelan, an American citizen, with espionage…

 

Russian Lawyer for Alleged U.S. Spy Says, Let’s Make a Deal But Not Too Soon

Zherebenkov’s stated goal is to arrange a trade: Whelan for someone being held in the United States. It’s widely assumed that that someone would be Maria Butina, who recently pleaded guilty to conspiring to act as an unregistered agent for Moscow and signed a broad cooperation agreement with the U.S. Justice Department… https://www.thedailybeast.com/russian-lawyer-for-alleged-us-spy-says-lets-make-a-deal-but-not-too-soon?via=desktop&source=Reddit

Attachments area

END

I WILL SEE YOU ON MONDAY
H
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