GOLD: $1274.15 DOWN $0.45 (COMEX TO COMEX CLOSING)
Silver: $14.99 NO CHANGE (COMEX TO COMEX CLOSING)
Closing access prices:
Gold : $1275.55
silver: $15.02
JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)
today RECEIVING: 743/838
EXCHANGE: COMEX
CONTRACT: APRIL 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,272.200000000 USD
INTENT DATE: 04/17/2019 DELIVERY DATE: 04/22/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
657 C MORGAN STANLEY 4
661 C JP MORGAN 743
685 C RJ OBRIEN 20
737 C ADVANTAGE 21 81
880 H CITIGROUP 798
905 C ADM 11
____________________________________________________________________________________________
TOTAL: 839 839
MONTH TO DATE: 6,294
NUMBER OF NOTICES FILED TODAY FOR APRIL CONTRACT: 839 NOTICE(S) FOR 83900 OZ (2.609 tonnes)
TOTAL NUMBER OF NOTICES FILED SO FAR: 6294 NOTICES FOR 829400 OZ (19.576 TONNES)
SILVER
FOR APRIL
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
0 NOTICE(S) FILED TODAY FOR nil OZ/
total number of notices filed so far this month: 774 for 3,870,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Bitcoin: OPENING MORNING TRADE :$5212 UP $11
Bitcoin: FINAL EVENING TRADE: $5265 UP 56
end
XXXX
Let us have a look at the data for today
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IN SILVER THE COMEX OI FELL A STRONG SIZED 4876 CONTRACTS FROM 224,783 DOWN TO 219,907 DESPITE YESTERDAY’S 1 CENT RISE IN SILVER PRICING AT THE COMEX. TODAY WE ARRIVED FURTHER FROM AUGUST’S 2018 RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.
WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY 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 VERY STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:
0 EFP’S FOR MARCH, 0 FOR APRIL, 2458 FOR MAY, 63 FOR JULY AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE: OF 2521 CONTRACTS. WITH THE TRANSFER OF 2521 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 2521 EFP CONTRACTS TRANSLATES INTO 12.61 MILLION OZ ACCOMPANYING:
1.THE 1 CENT RISE IN SILVER PRICE AT THE COMEX AND
2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST NINE 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 AND
21.925 MILLION OZ FINALLY STAND FOR DECEMBER.
5.845 MILLION OZ STAND IN JANUARY.
2.955 MILLION OZ STANDING FOR FEBRUARY.:
27.120 MILLION OZ STANDING IN MARCH.
AND NOW 3.870 MILLION OZ STANDING FOR SILVER IN APRIL.
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF APRIL:
26,817 CONTRACTS (FOR 14 TRADING DAYS TOTAL 26,817 CONTRACTS) OR 134.09 MILLION OZ: (AVERAGE PER DAY: 1916 CONTRACTS OR 9.577 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH OF MAR: 134.09 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 19.16% 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: 702,26 MILLION OZ.
JANUARY 2019 EFP TOTALS: 217.455. MILLION OZ
FEB 2019 TOTALS: 147.4 MILLION OZ/
MARCH 2019 TOTAL EFP ISSUANCE: 207.835 MILLION OZ
RESULT: WE HAD A STRONG SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 4876 DESPITE THE 1 CENT RISE IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 2521 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) . OUR FRIENDLY BANKER-SPREADERS MAY HAVE STARTED THEIR SPREADING LIQUIDATION EARLIER THAN USUAL. LET US SEE IF THE OI CONTINUES TO CONTRACT THESE NEXT FEW DAYS AND THEN WE WILL KNOW FOR SURE. THE COT REPORT A WEEK FROM TOMORROW WILL CONFIRM.
TODAY WE LOST A LARGE SIZED: 2355 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:
i.e 2521 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH DECREASE OF 4876 OI COMEX CONTRACTS. AND ALL OF THIS LACK OF DEMAND HAPPENED WITH A 1 CENT RISE IN PRICE OF SILVER AND A CLOSING PRICE OF $14.99 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY!!
In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.116 BILLION OZ TO BE EXACT or 160% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 0 NOTICE(S) FOR nil OZ OF SILVER
IN SILVER,PRIOR TO TODAY, WE SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018. AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.
AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.
ON THE DEMAND SIDE WE HAVE THE FOLLOWING:
- 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 JANUARY AT 5.825 MILLION OZ.AND FEB 2019: 2.955 MILLION OZ/ MARCH: 27.120 MILLION OZ/ AND NOW APRIL AT 3.870 MILLION OZ/
- 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.
- HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
- RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ
AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND. TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT).
IN GOLD, THE OPEN INTEREST FELL BY A FAIR SIZED 2152 CONTRACTS, TO 438,429 DESPITE THE TINY FALL IN THE COMEX GOLD PRICE/(A LOSS IN PRICE OF $0.10//YESTERDAY’S TRADING).
THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A GIGANTIC SIZED 12,532 CONTRACTS:
APRIL 0 CONTRACTS,JUNE: 12532 CONTRACTS DECEMBER: 0 CONTRACTS, JUNE 2020 0 CONTRACTS AND ALL OTHER MONTHS ZERO. The NEW COMEX OI for the gold complex rests at 438,429. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S. THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY. THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.
IN ESSENCE WE HAVE A GIGANTIC GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 10,380 CONTRACTS: 2152 OI CONTRACTS DECREASED AT THE COMEX AND 12,252 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN OF 10,380 CONTRACTS OR 1,038,000 OZ OR 32.28 TONNES. YESTERDAY WE HAD A TINY FALL IN THE PRICE OF GOLD TO THE TUNE OF $0.10.…AND YET WITH THAT, WE STILL HAD A VERY STRONG GAIN IN TONNAGE OF 32.28 TONNES!!!!!!.??????????????????????????????????????????
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF APRIL : 100,785 CONTRACTS OR 10,078,500 OR 313.48 TONNES (14 TRADING DAYS AND THUS AVERAGING: 7198 EFP CONTRACTS PER TRADING DAY
TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 14 TRADING DAYS IN TONNES: 313.48 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES
THUS EFP TRANSFERS REPRESENTS 313.48/3550 x 100% TONNES = 7.67% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***
ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE: 1686.88 TONNES
JANUARY 2019 TOTAL EFP ISSUANCE; 531.20 TONNES
FEB 2019 TOTAL EFP ISSUANCE: 344.36 TONNES
MARCH 2019 TOTAL EFP ISSUANCE: 497.16 TONNES
WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLEDRIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS. ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM. IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE.
Result: A FAIR SIZED DECREASE IN OI AT THE COMEX OF 2152 DESPITE THE TINY LOSS IN PRICING ($0.10) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A HUMONGOUS SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 12,532 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 12,532EFP CONTRACTS ISSUED, WE HAD A VERY STRONG GAIN OF 10,380 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
12,532 CONTRACTS MOVE TO LONDON AND 2152 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 32.28 TONNES). ..AND THIS HUGE DEMAND OCCURRED WITH A FALL IN PRICE OF $0.10 IN YESTERDAY’S TRADING AT THE COMEX.????
we had: 839 notice(s) filed upon for 83900 oz of gold at the comex.
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With respect to our two criminal funds, the GLD and the SLV:
GLD...
WITH GOLD DOWN $0.45 TODAY
NO CHANGE IN GOLD INVENTORY TONIGHT
INVENTORY RESTS AT 752.27 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 FLAT TODAY:
MY GOODNESS THIS IS SHOCKING!!
WITH SILVER BACKWARD IN LONDON BY 5 CENTS (INDICATING HUGE SCARCITY)
SOMEHOW OUR CROOKS FOUND 2.812 MILLION OZ OF PAPER SILVER TO ADD INTO THE SLV
/INVENTORY RESTS AT 311.979 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 STRONG SIZED 4876 CONTRACTS from 224,783 DOWN TO 219,907 AND FURTHER FROM 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…..
HERE IS HOW THE CROOKS USED SPREADING AS WE ENTER AN ACTIVE DELIVERY MONTH. THUS SILVER HAS THE ACTIVE MONTH OF MAY COMING UP AND THUS SPREADERS DO THE FOLLOWING:
“YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST IS STARTING TO RISE IN THIS NON ACTIVE MONTH OF APRIL BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN SILVER WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (MAY), AND THAT IS WHEN THE CROOKS SELL THEIR SPREAD POSITIONS BUT NOT AT THE SAME TIME OF THE DAY. THEY WILL USE THE SELL SIDE OF THE EQUATION TO CREATE THE CASCADE (ALONG WITH THEIR COLLUSIVE FRIENDS) AND THEN COVER ON THE BUY SIDE OF THE SPREAD SITUATION AT THE END OF THE DAY. THEY DO THIS TO AVOID POSITION LIMIT DETECTION. THE LIQUIDATION OF THE SPREADING FORMATION CONTINUES FOR EXACTLY ONE WEEK AND ENDS ON FIRST DAY NOTICE.”
THE CROOKS MAY HAVE STARTED TO LIQUIFY THEIR SPREADING POSITIONS. WE WILL NOT KNOW FOR SURE UNTIL WE SEE THE COT REPORT A WEEK FROM TOMORROW.
EFP ISSUANCE:
OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:
0 CONTRACTS FOR APRIL., 2458 FOR MAY AND JULY: 63 CONTRACTS AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2521 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 4876 CONTRACTS TO THE 2521 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A STRONG SIZED LOSS OF 2355 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 11.78MILLION 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 , 5.845 MILLION OZ STANDING IN JANUARY. 2.955 MILLION OZ STANDING IN FEBRUARY, 27.120 MILLION OZ FOR MARCH. AND NOW 3.870 MILLION OZ FOR APRIL.
RESULT: A STRONG SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 1 CENT RISE IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 2521 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.
BOTH THE SILVER COMEX AND THE GOLD COMEX ARE IN STRESS AS THE BANKERS SCOUR THE BOWELS OF THE EXCHANGE FOR METAL
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)THURSDAY MORNING/ WEDNESDAY NIGHT:
SHANGHAI CLOSED DOWN 12.92 POINTS OR 0.40% //Hang Sang CLOSED DOWN 161.42 POINTS OR 0.54% /The Nikkei closed DOWN 187.85 POINTS OR 0.84%/ Australia’s all ordinaires CLOSED DOWN .01%
/Chinese yuan (ONSHORE) closed DOWN at 6.7062 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 63.85 dollars per barrel for WTI and 71.78 for Brent. Stocks inEurope OPENED GREEN// ONSHORE YUAN CLOSED DOWN // LAST AT 6.7062 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7013 / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED
3A//NORTH KOREA
The real story with respect to North Korea as they now face towards Russia trying to fend off sanctions. It is clear that Russia has had enough of the rhetoric coming out of Washington
(courtesy Tom Luongo)
b) REPORT ON JAPAN
Japan
3 China/Chinese affairs
i)China/
4/EUROPEAN AFFAIRS
i)ITALY
Italy/Unicredit
This is going to hurt Unicredit as it must fork over $1.3 billion dollars in a sanctions probe. Unicredit engaged with Iran and thus the fine. This hit goes straight against their bottom line
( Associated Press)
ii)UK
My goodness, this is fast. Farage started his new Brexit party last week and now he is already leapfrogging past the Tories to lead in the new European election polls.
( zerohedge)
iii)Germany/Deutsche Bank
The world’s largest derivative player Deutsche bank and hopelessly offside on many of those trades is scrambling for another plan with the abandonment of the Commerzbank merger
( zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
TURKEY
I am moving the scale to Def con One on Turkey.
You will recall that last month, we highlighted that fact that Turkey burnt through 1/3 of its reserves. Then miraculously their reserves rose from $25 billion up to $28 billion upon which we witnessed a slight rally in the Lira. However what Erdogan did was borrow dollars from the banks to shore up his reserves and moved the liability off balance sheet. The true total of these swaps: 13 billion dollars. As of last night Turkey has about 11 billion dollars of true reserves if we subtract the swaps which are owed to Turkish banks. I am moving to Defcon I as Turkey does not have enough dollar assets to pay for 177 billion dollars of liabilities coming due this year.
Also, part of the 11 billion dollar reserves is gold. Turkey has 261 tonnes of gold to its credit (see below) and that works out to 10 billion dollars. It means that if you subtract the 10 billion dollars from the 11 billion in total net reserves, Turkey is now done to its last one billion dollars.
Turkey is of eastern set find with respect to gold. They would rather default on their USA dollar obligations than sell their gold in total contrast to that bozo, Maduro in Venezuela
this a is why I am moving to Def con 1 in Turkey.
( zerohedge)
6. GLOBAL ISSUES
7. OIL ISSUES
8 EMERGING MARKET ISSUES
i)INDIA//BOEING/USA
( zerohedge)
9. PHYSICAL MARKETS
ii)Such a sad case for Crystallex Mining as they try and collect their 1.2$ billion award for the confiscation of their mine
iii)A must read: Craig Hemke talks about how the bullion banks are trying to break the 200 day moving average price of gold despite no gold coming into the comex and its scarcity. The 200 day moving average price today is $1252.( Craig Hemke/Sprott/GATA)
iv)South Africa;s Sibany ends its 5 month strike
However wages in South Africa are extremely low for what they do
(Bloomberg/GATA)
iv)10. USA stories which will influence the price of gold/silver)
MARKET TRADING//early this morning/FOMC
ii)Market data
a)Retail sales were expected to rebound in March and it did..it rose by 1.6%
( zerohedge)
b)The big strength in the uSA economy is their service sector. They have lost their manufacturing prowess years ago. Now we are witnessing the USA service PMi crash to 2 year lows and this signals a GDP slump. Ignore the strong blip in retail sales last month
c)The soft data Philly Fed Manufacturing Index for April declines and we are at a 3 yr low
( Market Watch)
ii)USA ECONOMIC/GENERAL STORIES
a)Zero hedge echos Michael Snyder as we see bricks and mortar operations collapse in 2019
( zerohedge)
c)With Bernie Sanders gaining in popularity, the USA populace seem to want the Canadian “Medicare” system. Trust me..it is not good as you must wait months for specialized procedures. And I can vouch for that personally. However once you get procedures done..the medical care is A one.( zerohedge)
d)The important trucking data, Cass Freight Shipment index contracts for the 4th consecutive month. This confirms that the USA economy started to contract around November 2018
( Mish Shedlock)
a)This ought to be good…It seems that the FBI during the Obama Presidency drafted a secret and highly classified memo regarding the sending of classified emails on Hillary Clinton’s server. Somehow the FBI did not send the memo to Sally Yates. Senate leaders want to know why. They have now sent the letter off to Michael Horowitz for his investigation
( Sara Carter)
b)the Mueller report is out and it is a nothing burger. Now it is time for the Trump team to go on the offensive
(courtesy zerohedge)
c)the parents in the college admission scandal fight back by mounting an aggressive defense; they state that it cannot be a conspiracy if none of the other parents knew that each were involved in it
Let us head over to the comex:
AFTER APRIL, WE HAVE THE ACTIVE DELIVERY MONTH OF MAY AND HERE THE OI FELL BY 9945 CONTRACTS DOWN TO 90,547. CONTRACTS.. THE NEXT MONTH OF JUNE GAINED 6 CONTRACTS TO 140. AFTER JUNE, THE VERY BIG DELIVERY MONTH OF JULY HAD A GAIN OF 4397 CONTRACTS UP TO 90,092 CONTRACTS.
i) Into Delaware: 1999.99
GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.
I was totally unaware of the gold affinity to the Germans. German citizens own about 8900 tonnes of gold having added a huge 250 tonnes in these past two years. The Bundesbank owns 3400 tonnes of which half is in the USA never to be repatriated as this gold is gone (leased out)
(courtesy Stocker/DieWelt/Berlin?GATA)
Venezuelan unrest may hurt miner’s bid to reclaim $1.2 billion
Submitted by cpowell on Wed, 2019-04-17 14:50. Section: Daily Dispatches
By Jef Feeley
Bloomberg News
Wednesday, April 17, 2019
Confusion over who’s in charge in Venezuela may spell bad news for Crystallex International Inc., a bankrupt gold producer trying to collect on a $1.2 billion arbitration award by seizing shares of the state-owned energy company that controls giant U.S. refiner Citgo Holding Inc.
An appellate court in Philadelphia heard arguments in the case on Monday, and one of the three judges indicated the matter may get sent back to a lower court. That would mean more delays for Crystallex, which has been seeking compensation for a Venezuelan gold mine seized in 2011 by the government. The company won a judgment in the U.S. in 2016.
… But since then Venezuela has been mired in turmoil, with President Nicolas Maduro and opposition leader Juan Guaido both claiming to be the country’s legitimate leader, raising some concerns for at least one appellate court judge about whether it was fair to allow Crystallex to seize shares of Petróleos de Venezuela SA, Citgo’s parent, if Guaido is the new head of the country.
“All the different permutations indicate this case will have to be sent back” to the trial court in Delaware for further review, Judge Joseph Greenaway Jr. said Monday during a four-hour hearing. The panel will rule later on the appeal. …
… For the remainder of the report:
https://www.bloomberg.com/news/articles/2019-04-17/venezuela-unrest-may-…
end
A must read: Craig Hemke talks about how the bullion banks are trying to break the 200 day moving average price of gold despite no gold coming into the comex and its scarcity. The 200 day moving average price today is $1252.
(courtesy Craig Hemke/Sprott/GATA)
Craig Hemke at Sprott Money: Central banks aim to break 200-day average in gold
Submitted by cpowell on Wed, 2019-04-17 15:36. Section: Daily Dispatches
11:36a ET Wednesday, April 17, 2019
Dear Friend of GATA and Gold:
Operating with their bullion bank agents, central banks now are trying to break the 200-day moving average price of gold to offset all the fundamental factors arguing for a higher price, the TF Metals Report’s Craig Hemke writes today at Sprott Money. This counterintuitiveness long has characterized the gold market under intervention, Hemke notes. His analysis is headlined “Shades of 2013” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/Blog/shades-of-2013-craig-hemke-17-042019.ht…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
South Africa;s Sibany ends its 5 month strike
However wages in South Africa are extremely low for what they do
(Bloomberg/GATA)
South Africa’s Sibanye Gold union ends five-month strike
Submitted by cpowell on Thu, 2019-04-18 00:06. Section: Daily Dispatches
By Felix Njini and Paul Burkhardt
Bloomberg News
Wednesday, April 17, 2019
South Africa’s Association of Mineworkers and Construction Union agreed to end a strike at Sibanye Gold Ltd.’s gold mines that has crippled production and squeezed the company’s finances.
The deal represents the end to almost five months of legal wrangling between the two sides, amid violence that left at least nine people dead. It suggests a cooling of tensions between Sibanye and one of its biggest unions ahead of potentially-fractious platinum wage negotiations later this year.
…
AMCU has been on strike since Nov. 21 after refusing to join a wage-agreement that Sibanye reached with other unions. In an apparent victory for Sibanye Chief Executive Officer Neal Froneman, the labor group has now signed the same three-year pact. Sibanye will also provide financial and other assistance to its gold-mine workers, including a one-off payment, a cash advance to be repayable over 12 months, and transport to return to work. …
… For the remainder of the report:
https://www.bloomberg.com/news/articles/2019-04-17/sibanye-gold-union-ca…
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.
CNBC.com
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.
Federal judge tells traders they can combine cases accusing JP Morgan of rigging metals market
- Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.
- Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.
A group of traders from across the U.S. who allege that J. P. Morgan Chase manipulated precious metals markets for years are one step closer to bringing a class action suit against the nation’s largest bank.
Earlier this month, a federal judge said five separate lawsuits making similar allegations against the bank could be combined, potentially including thousands of people who traded in the precious metals market from Jan. 2009 through Dec. 2015.
Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.
J. P. Morgan declined to comment on this story.
Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.
Vincent Briganti, a partner at the firm, filed the first suit seeking class action status in November on behalf of Dominick Cognata, a trader who alleges he suffered losses due to J.P. Morgan’s illegal trading conduct in the silver and gold futures and options markets.
That was after the federal court in Connecticut unsealed a criminal plea agreement by John Edmonds, a former J.P. Morgan metals trader. In his guilty plea, Edmonds, who is 36-years old, admitted that he and other “unnamed co-conspirators” fraudulently manipulated the precious metals markets while they were employed at J. P. Morgan from 2009 to 2015.
Edmonds said he had learned the illegal trading tactics from senior traders, and then used them hundreds of times with the knowledge of and consent of his immediate supervisors.
Briganti’s lawsuit also names John Edmonds and a group of yet-to-be-identified precious metals traders and the bank as defendants.
On Wednesday, the lawyers sent a letter to Judge Koeltl saying they were having difficulty locating Edmonds to serve him legal papers and requested a 30-day extension to do so, which the judge granted on Thursday. Briganti noted that they have been in contact with Edmonds’ attorney in the criminal case. Edmonds’ attorney and Briganti could not be reached for comment.
“We are hopeful that this extension will result in completing service on Mr. Edmonds without formal motion practice and a request for alternative means of service,” Briganti said in the letter.
The next step in the civil case is for the plaintiffs to file an amended class action complaint and set a schedule for defendants to respond.
In addition to the proposed class action, J. P. Morgan also faces a separate civil suit which also accuses the bank of rigging precious metals markets.
end
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Your early THURSDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED/ LAST AT: 6.7062/
//OFFSHORE YUAN: 6.7013 /shanghai bourse CLOSED DOWN 12.92 or 0.40%
HANG SANG CLOSED DOWN 161.42 points or 0.54%
2. Nikkei closed DOWN 187.85 POINTS OR 0.84%
3. Europe stocks OPENED GREEN/EXCEPT LONDON
USA dollar index RISES TO 97.30/Euro FALLS TO 1.1254
3b Japan 10 year bond yield: FALLS TO. –.03/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.93/ 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//CARRY TRADERS GETTING KILLED
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 63.85 and Brent: 71.78
3f Gold UP/JAPANESE Yen UP CHINESE YUAN: ON -SHORE DOWN/OFF- SHORE: DOWN
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +05%/Italian 10 yr bond yield DOWN to 2.59% /SPAIN 10 YR BOND YIELD DOWN TO 1.07%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.54: DANGEROUS FOR THE ITALIAN BANKING SYSTEM
3j Greek 10 year bond yield RISES TO : 3.31
3k Gold at $1276.50 silver at:14.99 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 25/100 in roubles/dollar) 63.97
3m oil into the 63 dollar handle for WTI and 71 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.093 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0112 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1385 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 +0.05%
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 2.56% early this morning. Thirty year rate at 2.97%
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
6. TURKISH LIRA: UP TO 5.8216..DEADLY
WEAK PMI NUMBERS TODAY OUT OF GERMANY AND FRANCE:
Global Stocks Wipe Out Weekly Gains As European PMIs Slump
If China’s gargantuan credit injection was supposed to prompt a wave of global “green shoots”, it failed to make a dent on Europe.
Global shares erased this week’s gains and US equity futures dropped after weak manufacturing surveys from Asia and Europe stoked renewed fears of a slowdown in global growth, adding to profit taking ahead of the long Easter weekend, while safe havens such as the dollar and treasuries pushed higher.
European markets dropped after French and German manufacturing PMIs for April showed activity continuing to contract. Germany’s DAX more than doubled losses on the day to trade 0.3 percent lower after the release of the German survey, while the pan-European STOXX 600 index was down 0.2 percent even as carmaker and food shares gained.
While activity in Germany’s services sector rose to a seven-month high in April, investors focused on the 44.5 reading for the manufacturing sector, well below the 50.0 expansion mark for the 3rd consecutive month, and missing expectations of a 45 print (up from 44.1 in March). “The reading was better than last month, but below expectations and we could see from the market report that once again it’s the core industry for Germany that’s the worry – the carmakers are struggling,” said DZ Bank analyst Sebastian Fellechner.
Germany’s weak manufacturing sentiment echoed a miss in the French Mfg PMI which also missed, printing at 49.6, below the 50 exp, and down from 49.7, resulting in the Eurozone PMI falling to 51.3 from 51.6, also missing the 51.8 expected, and the first data point for Q2 signalling further sluggishness. “Manufacturing continues to dampen economic activity in across the € area. Service sector growth also cooled” according to the PMI report, which indicated that if China wishes to grow Europe’s economy – its biggest trading partner – it will have to launch even more stimulus.
IHS Markit PMI™@IHSMarkitPMI
Flash Eurozone PMI falls
to 51.3 in April (51.6 – Mar), with first data point for Q2 signalling further sluggishness. Manufacturing continues to dampen economic activity in across the € area. Service sector growth also cooled. More: http://ihsmark.it/tAu450qIMsH
The weak surveys out of Europe added to a weak Japanese reading on manufacturing activity, which also showed new export orders fell at the fastest pace in almost three years. The manufacturers DI in the April Reuters Tankan survey declined by 2 points from March to +8, marking the sixth straight month of decline since October 2018. The DI has also fallen rapidly, down 20 points over the past six months, and is now at its lowest level since September 2016 (+5).
Earlier in the session, Asia suffered even heavier losses, with South Korean shares leading the decline as issues with the new 2-screen Samsung phone weighed on the biggest stock in the main index.
MSCI’s All Country World Index dropped 0.3% on the day, erasing all gains for the week after the German data, while the VIX inched up above 13 after dipping below 12 yesterday, and back to where it was at the start of the week. On Wednesday, the index had fallen to its lowest since August 2018.
Ahead of tomorrow’s Easter holiday, market participants continue to eye signs of “optimistic progress” in U.S.-China trade negotiations. While yesterday the WSJ reported that Washington and Beijing set a tentative timeline for a fresh round of face-to-face meetings ahead of a possible signing ceremony in late May or early June, the market largely ignored the news as even the algos now appear saturated with daily trade headlines.
In currencies, the dollar was 0.3 percent higher against a basket of peers at 97.261. The Australian dollar was 0.2 percent lower at $0.7163, after earlier jumping to $0.7200 as traders wagered the Reserve Bank of Australia will not rush to ease rates even though the broader economy has seemingly lost momentum.
China’s yuan rose to the highest level in more than nine months after the central bank strengthened its daily fixing by the most in four weeks. The Bloomberg replica of the CFETS RMB Index, which tracks the yuan versus a basket of 24 trading partners’ currencies, edged up for a fifth straight day on Thursday. The gain came after the People’s Bank of China strengthened the yuan’s reference rate by 0.3 percent, the most since March 21, although it was in line with traders and analysts’ expectations. The central bank’s move on the daily fixing was “an indication that the authorities seem comfortable with yuan strength,” according to Khoon Goh, head of Asia research at Australia and New Zealand Banking Group. In the near term, the yuan could test the year’s high of 6.67 per dollar, he said.
PBoC is reportedly unlikely to lower RRR in the short-term after recent liquidity injections and MLF announcement, while better than expected Q1 data also means there is less pressure for a RRR cut. (China Securities Journal)
BoK kept the 7-Day Repo Rate unchanged at 1.75% as expected with the decision made unanimously. BoK said South Korea economy to grow mid-2% level this year and hover below prior projections but won’t significantly diverge from potential level, while it added that exports are to recover gradually
In commodities, oil markets fell despite a surprise decline in U.S. inventories, but the price drops were tempered by a smaller-than-expected reduction in gasoline stocks and ongoing OPEC-led supply cuts.
Economic data include retail sales, jobless claims, Markit PMI readings. Philip Morris, Honeywell, American Express and Danaher are due to report earnings
Market Snapshot
- S&P 500 futures down 0.2% to 2,895.00
- STOXX Europe 600 down 0.2% to 388.92
- MXAP down 0.5% to 163.00
- MXAPJ down 0.4% to 543.65
- Nikkei down 0.8% to 22,090.12
- Topix down 1% to 1,614.97
- Hang Seng Index down 0.5% to 29,963.26
- Shanghai Composite down 0.4% to 3,250.20
- Sensex down 0.07% to 39,247.89
- Australia S&P/ASX 200 up 0.05% to 6,259.81
- Kospi down 1.4% to 2,213.77
- German 10Y yield fell 3.5 bps to 0.045%
- Euro down 0.3% to $1.1260
- Brent Futures down 0.4% to $71.31/bbl
- Italian 10Y yield rose 1.8 bps to 2.241%
- Spanish 10Y yield fell 3.2 bps to 1.074%
- Brent Futures down 0.4% to $71.31/bbl
- Gold spot up 0.1% to $1,275.23
- U.S. Dollar Index up 0.2% to 97.24
Top Overnight News from Bloomberg
- While German manufacturing slumped, France’s economy got off to an encouraging start in the second quarter, with business activity stabilizing as disruption from yellow-vest protests waned; U.K. retail sales showed the resilience of consumers in the face of Brexit uncertainty
- As merger talks between Deutsche Bank AG and Commerzbank AG appear to run into more obstacles, potential suitors such as ING Groep NV and UniCredit SpA are said to show interest for a piece of the German banking market
- Economists are dialing down expectation of stimulus in China after upbeat economic data. UBS and Morgan Stanley have upgraded their outlook for China, though economists still expect targeted stimulus measures
- Senior U.S. and Chinese officials are scheduling more face-to- face trade talks in an effort to reach a deal by early-May that President Donald Trump and his Chinese counterpart Xi Jinping could sign later that month, two people familiar with the plans said
- Australian employment climbed more than expected in March, led by full-time roles, suggesting the central bank has more time to assess whether the economy needs further stimulus
- North Korean leader Kim Jong Un oversaw the test-firing of a “new-type tactical guided weapon,” state media reported, in a likely signal of displeasure over stalled nuclear talks with U.S. President Donald Trump
- Turkey remained gripped by a dispute over the result of a local election in Istanbul, with the authorities still considering the governing party’s claim of fraud while the main opposition was awarded victory
- Japan is no longer in a state of deflation and the deflationary mindset among company executives is starting to change, Finance Minister Taro Aso says at a Japan Chamber of Commerce and Industry event
- Attorney General William Barr will hold a news conference at 9:30 a.m. Washington time Thursday on Special Counsel Robert Mueller’s report, which the Justice Department has said it will release that morning
- U.K house prices stagnated in March as the number of transactions plunged, according to LSL Acadata. Values were flat on an annual basis last month as falls in London and southern England offset gains elsewhere, the firm said in a report Thursday
Asian equity markets were softer with the region tentative ahead of Easter closures and following a lacklustre performance on Wall St where a continued slump across the healthcare sector weighed across the major indices. ASX 200 (Unch) was choppy with the index initially dragged lower as health stocks tracked the underperformance of their counterparts stateside, although the index later recovered amid strength in miners and energy names following quarterly updates from the likes of Fortescue Metals, Santos and Woodside Petroleum. Meanwhile, Nikkei 225 (-0.8%) was weighed by a firmer currency, while Hang Seng (-0.5%) and Shanghai Comp. (-0.4%) also traded subdued despite further liquidity efforts by the PBoC, as hopes for a RRR cut fade and as Hong Kong participants took risk off the table ahead of a 4-day closure. Finally, 10yr JGBs were higher with prices supported by the cautiousness in the region and amid mild gains in T-notes, while today’s enhanced liquidity auction for longer-dated JGBs also attracted greater demand.
Top Asian News
- Singapore’s DBS Plans to Stop Financing Coal Power After 2021
- HNA Unit in Singapore Pays Bond Amid Questions on Loan Default
- Economists Shift China Stimulus Expectations After Upbeat Data
- Samsung Electronics Gets Double Whammy, and Korean Stocks Suffer
Major European indices began the day largely unchanged, but have since traded choppy [Euro Stoxx 50 +0.3%] with bourses mixed in spite of further optimistic US-China headlines, as markets are weighed on by broader risk sentiment following the poor PMIs out of the EZ. Sectors have followed a similar transition from flat to relatively mixed this morning, although the consumer staples sector (+1.1%) is significantly outperforming its peers. Buoyed by sector heavyweight Nestle (+1.1%) after a sales update, where they beat on Q1 revenue and affirmed FY19 sales towards 2020 target levels and Unilever (+3.5%) who have confirmed progress towards FY expectations. Other notable movers this morning include Osram Licht (-3.7%) who are trading at the bottom of the Stoxx 600 after reports that Carlyle & Bain are losing confidence regarding a bid for the Co. Kering (-3.6%) are in the red post earnings in-spite of beating on Q1 revenue and reporting LFL increases in Gucci & YSL, with some pre-market commentary citing the potential for downside on the sales increase not perceived as being large enough.
Top European News
- U.K. Retail Sales Surge as Consumers Defy Brexit Turmoil
- German Economic Activity Improves as Services Remain Resilient
- Osram Says Still ‘In Good Talks’ With Bain, Carlyle
- French Minister Says Sooner the U.K. Leaves the EU the Better
In FX, it was not the best day for the EUR as it tumbled to the bottom of the G8 performers following dismal manufacturing flash readings from France, Germany and in turn, the EZ. The single currency initially experienced some volatility at the release of the French metrics, before Germany’s miss brought the first wave of material downside, later exacerbated by the disappointing EZ numbers. All-in-all, EUR/USD gave up the 1.1300 handle and fell below its 50 DMA at 1.1294 before briefly breaching the psychological 1.1250. The pair currently resides just above 1.1250, having thus far traded within a 1.1245-1305 range.
- USD – On the front-foot amidst the demise of the EUR post-PMIs as the DXY marches on above the 97.000 level from an intraday low of 96.950 (high 97.333). The index did little overnight and mostly traded sideways due to thinned holiday volume alongside a lack of catalysts. The Buck will be eyeing the slew of US data in the form of weekly jobless claims, Philly Fed, retail sales and Markit PMIs later in the session.
- GBP – A victim of the post-PMI Dollar strength after Sterling tumbled in tandem with the EUR to an intraday low, although the Pound felt some reprieve following optimistic retail sales, boosted by weather. GBP/USD currently rests below its 50 WMA at 1.3033 at the bottom of today’s 1.3010-1.3053 with potential stops just below the round figure.
- AUD – Aussie jobs data did little to provide any material move for the currency, although showed an employment change of 25.7k, a jump from last month’s 4.6k, surpassing expectations of 12.0k, whilst the unemployment rate ticked up to 5.0% from 4.9%, as expected. Westpac argues that due to the conflicting signals from a strengthening labour market against weak GDP, the RBA is seemingly putting more weight on employment from a policy perspective. The analysts add that “slow growth will eventually weigh on employment growth. On this basis, along with inflation remaining low, we continue to forecast cash rate cuts in August and November”. AUD/USD saw a knee-jerk higher to test 0.7200 before most of its gains. The aforementioned Dollar strength then sent to AUD back down to fresh session lows after trading within a 0.7160-.7200 thus far ahead of its 100 DMA at 0.7140. Note: AUD/USD sees USD 1.1bln in options expiring at strike 0.7175 at today’s NY cut.
- SEK – The marked G10 underperformer amid the release of dreary unemployment numbers wherein the rate rose to 7.1% although it was expected to be maintained at 6.6%. As such, SEK failed to reap the benefits of the EUR’s weakness as EUR/SEK spiked higher to briefly breach 10.50 to the upside as before stabilising above its 50 DMA at 10.4841.
- JPY – The outperformer amongst the G10 currencies despite the sudden USD strength as the Yen benefits from its haven properties given after EZ PMIs somewhat soured market sentiment, although the EUR weakness may have aided the JPY through its EUR cross. USD/JPY gave up the 112.00 handle and currently rests towards middle of a 111.75-112.10 range.
In commodities, Brent (-0.1%) and WTI (-0.2%) prices have traded in-line with general sentiment this morning, with the complex taking a downturn following this morning’s PMIs with German and French Manufacturing missing expectations, as did all 3 EZ measures. Following the German data, the EUR weakened which led to some strength in the USD causing oil prices to deviate negatively from their largely lacklustre trade overnight on a lack of news flow. Looking ahead in the session due to the market holidays for Easter, the Baker Hughes will be release early today April 18th at the usual time of 18:00 BST. Gold (+0.2%) has traded largely in-line with the dollar this morning on the aforementioned PMIs. Overnight, the yellow metal fell to fresh YTD lows around the USD 1271/oz level following positive US-China news flow from President Trump stating the deal is progressing nicely alongside reports that US-China have set a tentative timeline for trade talks; with the potential for a deal to be signed as early as May. Elsewhere, Antofagasta’s Chairman stated that copper demand will be supported by the ongoing fight against climate change, as the metal is critical to electric vehicle production.
Looking at the day ahead, we’ve got March retail sales, the April Philly Fed business outlook, the latest claims data, PMIs, February business inventories and March leading index. Away from the data the ECB’s Lane and Bostic speak this morning and this afternoon respectively, while Italy’s lower house begins debating on the government’s economic forecasts. Finally the earnings highlights include Philip Morris, American Express and Schlumberger.
US Event Calendar
- 8:30am: Retail Sales Advance MoM, est. 1.0%, prior -0.2%; Retail Sales Ex Auto MoM, est. 0.7%, prior -0.4%
- 8:30am: Philadelphia Fed Business Outlook, est. 11, prior 13.7
- 8:30am: Initial Jobless Claims, est. 205,000, prior 196,000; Continuing Claims, est. 1.72m, prior 1.71m
- 9:45am: Bloomberg Consumer Comfort, prior 59.8
- 9:45am: Markit US Manufacturing PMI, est. 52.8, prior 52.4
- 9:45am: Markit US Services PMI, est. 55, prior 55.3
- 9:45am: Markit US Composite PMI, prior 54.6
- 10am: Leading Index, est. 0.4%, prior 0.2%
- 10am: Business Inventories, est. 0.3%, prior 0.8%
DB’s Jim Reid concludes the overnight wrap
It’s my last day at work for a couple of weeks. I may need it to get over last night’s Champions League football. Never has a Liverpool game played second fiddle as much as last night. Nick Burns in my team is a Spurs season ticket holder and he’ll be unbearable today but secretly I’m very happy. Anyway I won’t have much rest on hols as two years after a random speculative visit to a house for sale – when my wife was delirious with double morning sickness carrying twins and I was swept away by it being opposite my golf club – next week we move in. We fell in love with the idea of it but maybe didn’t quite comprehend the enormity of the project despite having done a smaller scale one six years ago. After planning permission, architects, hiring builders and then 10 months of renovations we are mentally exhausted. The stress has at times been unbearable and given the state of the house last night when I went to see it it’s not over yet as the builders are working all of Easter. Given all the unforeseen costs if I were a corporate bond I would have been downgraded from solid investment grade to junk in this process. Those twins will have a lot to answer for in the years ahead. I’ll be off for the next two weeks unpacking boxes and when my wife isn’t looking heading off to the first tee where I can be 2 minutes after leaving my front door. You’ll be in the safe hands of Craig and Quinn while I’m off. See you on the other side.
Talking of taking on more debt, there was a lot of talk in the market yesterday about the latest credit fuelled China growth and activity data that was out just over 24 hours ago. Well today we’ll see if the Q1 boost in activity there can make an impact on the global flash PMIs. Of special interest will be the German and Eurozone manufacturing readings. The former slumped to 44.1 last month and the lowest since 2012. That’s also in contrast to what appears to still be a fairly solid services sector with the reading over 11 pts higher at 55.4. The gap is expected to close this month with the manufacturing reading expected to nudge up to a still very weak 45.0, and the services reading to moderate slightly to 55.0. For the Euro Area the consensus is for a 51.8 composite reading which would be slightly up from 51.6 last month, helped also by a slight climb in the manufacturing sector (48.0 expected from 47.5 last month) more than offsetting a modest pullback in the services data. At some point the manufacturing numbers should see a decent bounce in Europe, after declining for 14 out of the last 15 months, but whether it’s today remains to be seen. As a minimum we should see the first “b” of bounce. All this data is out between 8.15am BST and 9.00am BST this morning.
An interesting point that our China economists made after yesterday’s numbers was that total government spending rose by 23% in Q1 despite weak revenue growth of just 3%. They note that fiscal policy was eased by a fairly eye catching 6ppts of nominal GDP in Q1. This is important as it suggests that growth is being driven by more than just monetary policy. Our colleagues now expect monetary and fiscal policy to shift to neutral in Q2 and for the rapid credit and fiscal expansion to stabilise. That actually goes against a Bloomberg story which did the rounds yesterday suggesting that China might take more steps to inject more stimulus, specifically through bolstering sales of cars and electronics. Although this may be a more targeted measure. In any case, our team no longer forecast a RRR or interest rate cut for the rest of this year. The upside surprise in Q1 has also meant that they have pushed up their 2019 growth forecast from 6.1% to 6.3% although still expect a slowdown in H2 as fiscal support slows in line with revenue constraints. More in our colleagues report here.
That Bloomberg story about China bolstering sales of cars and autos – combined with another big rally for Qualcomm – actually saw the NASDAQ 100 close at a new all-time high after gaining +0.34%, while the full NASDAQ index fell -0.05% despite opening the session higher. There was a similar course of travel for the S&P 500 which ended -0.23% after a brighter start. After tepid moves on Monday and Tuesday, the S&P 500 has traded in a range of +/-0.78% over the last three sessions, the second narrowest of the year. Healthcare names struggled again yesterday with the sector dropping -2.89% as the fallout from concerns about “Medicare for All” continued. The sector has now lost -6.61% this month which compares to a +2.33% gain for the S&P 500.
Health care was also a drag in Europe however the STOXX 600 still eked out a +0.10% gain by the end of play as autos and banks rallied. The index is now at its highest level since August and back to within 5.91% of the all-time high from 2015. Just on autos, the sector gained +1.62% following that China story and is now up for five sessions in a row. European Banks rose +0.88% and are now at the highest since October as core European yields rose, with 10y Bunds up to 0.078% (+1.4ps). Treasuries ended little changed at 2.592% – although are down a couple of basis points this morning – while in commodities we saw copper rally +0.94% to reach the highest level since July.
This morning in Asia bourses have followed the S&P lower with the Nikkei (-0.68%), Hang Seng (-0.58%), Shanghai Comp (-0.23%) and Kospi (-1.06%) all in the red. The latter appears to be underperforming on the back of news that North Korea has tested a new “tactical weapon” according to state media. Sentiment more broadly in Asia also failed to get much of a lift from the news that US and China officials are aiming for an early May announcement on a trade deal, suggesting that this isn’t necessarily new news. Lighthizer and Mnuchin are expected to travel to Beijing from the week of April 29th to continue discussions. Elsewhere, in rates markets we should also note that China’s overnight repurchase rate is 16bps lower this morning having hit a headline inducing four-year high yesterday as cash supplies tightened. Longer dated 10y yields are steady this morning at 3.369% but are up over 30bps since the end of March.
Back to PMIs where we’ll also get the US flash numbers this afternoon alongside the March retail sales report. For the PMI, consensus expectations are for the manufacturing index to rise to 52.8 from 52.4, but for the services index to fall to 55.0 from 55.3. On the retail numbers, our US economists expect sales excluding autos to have climbed +0.5% mom which is slightly below the market consensus (+0.7% expected) however our colleagues also note that there may be weather related downside risk to the March numbers as well given that the so-called “bomb cyclone” event affected large swaths of the country in the middle of the month. However, the fact that the March employment report and the aforementioned auto sales data did not show meaningful weather effects indicates that this distortion may be limited. Also today, the Attorney General Barr is releasing the redacted Mueller report at a press conference at 9:30am ET/2:30pm BST which has the scope to generate headline volatility.
Returning again to yesterday, where the latest earnings reports can only really be described as mixed. Morgan Stanley shares closed up +2.64% after beating earnings expectations but disappointing on revenues. Balancing that out were poor results from Abbot Labs (-4.61%), which beat headline expectations but failed to impress with their guidance amid the healthcare rout, and Bank of New York Mellon (-9.52%), which saw weak net interest income and fall in deposits. US Bancorp (+0.78%) posted in-line results.
In other news, the ECB’s Hansson was quoted yesterday as saying that “there are some signs of hope for the second half of 2019 at the moment”, pointing specifically to a solution between the US-China in their trade conflict. Nowotny did however also hint at it not being time to introduce tiering for the ECB. There was a similar story from MNI and combined with the recent commentary, there appears to be a bias towards the ECB not going down this route for now if it’s all is to be believed.
Staying with Europe, as expected Germany’s economy ministry slashed its forecast for 2019 growth to 0.5% with the ministry still expecting a weak first half. That matches our economists’ forecast for this year.
In the US, Philadelphia Fed President Harker reiterated his prior views in favour of one more rate hike this year followed by one in 2020. Separately, St. Louis Fed President Bullard gave a presentation in favour of nominal GDP targeting. He is one of the most dovish members of the committee, but there certainly seems to be a growing contingent of policymakers in favour of changes to the Fed’s operating framework. Later in the session, the Fed’s beige book said that there was “some strengthening” in conditions and “reports on manufacturing activity were favorable.” However, there was some “trade-related uncertainty” and “labor markets remained tight.” On inflation, prices were reported to “have risen modestly.” So nothing really new to shake the Fed’s current views.
As for the data that was out yesterday, March UK CPI was soft, as the yoy figures for headline and core inflation both missed expectations by -0.1pp, coming in at 1.9% and 1.8%, respectively. That should give the BoE some more breathing room, though the forward rates curve didn’t move much in response to the data. The retail price index rose 2.4% versus expectations for 2.6%, though PPI output rose 2.4% versus the expected 2.1%. In the euro area, March CPI was confirmed at 1.4% headline and 0.8% core, while Italy’s final print was also unchanged at 1.1%. In the US, the February trade deficit came in at -$49.4 billion, narrower than expected as exports performed strongly, rising 1.1% versus a more tepid 0.2% rise in imports.
To the day ahead now, where the obvious focus this morning in Europe is on those April flash PMIs. Away from that we’ll also get March PPI in Germany and March retail sales in the UK. The BoE’s credit conditions and bank liabilities survey is also out this morning. Meanwhile in the US this afternoon we’ve got March retail sales, the April Philly Fed business outlook, the latest claims data, PMIs, February business inventories and March leading index. Away from the data the ECB’s Lane and Bostic speak this morning and this afternoon respectively, while Italy’s lower house begins debating on the government’s economic forecasts. Finally the earnings highlights include Philip Morris, American Express and Schlumberger.
end
3. ASIAN AFFAIRS
i)THURSDAY MORNING/ WEDNESDAY NIGHT:
SHANGHAI CLOSED DOWN 12.92 POINTS OR 0.40% //Hang Sang CLOSED DOWN 161.42 POINTS OR 0.54% /The Nikkei closed DOWN 187.85 POINTS OR 0.84%/ Australia’s all ordinaires CLOSED DOWN .01%
/Chinese yuan (ONSHORE) closed DOWN at 6.7062 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 63.85 dollars per barrel for WTI and 71.78 for Brent. Stocks inEurope OPENED GREEN// ONSHORE YUAN CLOSED DOWN // LAST AT 6.7062 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7013 / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED
3 a NORTH KOREA/
The real story with respect to North Korea as they now face towards Russia trying to fend off sanctions. It is clear that Russia has had enough of the rhetoric coming out of Washington
(courtesy Tom Luongo)
3 b JAPAN AFFAIRS
3 C CHINA/CHINESE AFFAIRS
China/
end
4/EUROPEAN AFFAIRS
Italy/Unicredit
This is going to hurt Unicredit as it must fork over $1.3 billion dollars in a sanctions probe. Unicredit engaged with Iran and thus the fine. This hit goes straight against their bottom line
(courtesy Associated Press)
and special thanks to Robert H for sending this to us.
US Fines Italian Bank $1.3 Billion in Sanctions Probe
MILAN (AP) — Italian bank UniCredit will pay $1.3 billion to settle charges by the U.S. government that it violated sanctions against Iran and other countries.
UniCredit, which operates in several European countries, said Tuesday that its German subsidiary, UniCredit Bank AG, agreed to plead guilty in U.S. federal court to sanctions violations involving Iran.
A U.S. Depart of Treasury statement said the fine resolves an investigation by its foreign assets control office into violations of U.S. sanctions, including related to the proliferation of weapons of mass destruction.
It cited the processing of over $500 million in payments in 2,000 operations from 2007 to 2011, a period during which UniCredit operated a U.S.-dollar account for the Iranian state-owned shipping company.
UniCredit said it had booked provisions beyond the settlement.
end
My goodness, this is fast. Farage started his new Brexit party last week and now he is already leapfrogging past the Tories to lead in the new European election polls.
(courtesy zerohedge)
Farage’s Brexit Party Leapfrogs Tories To Lead European Election Polls
Support for the Tories is plunging following Theresa May’s latest Brexit can-kick (a six-month extension until Halloween), and as cross-party talks for a Brexit compromise stall, it appears Nigel Farage’s newly formed Brexit Party is emerging as the biggest winner from all the Brexit chaos.
According to the latest YouGov poll, the second in two days, Farage’s newly formed party, which enjoyed its official coming-out party on Friday during a rally in Coventry, has leapfrogged both establishment parties in the upcoming European Parliamentary elections.
That poll put the Brexit Party at 23%, Labour at 22% and the Conservatives at 17%. Change UK, the group of MPs who defected from the Conservatives and Labour earlier this year, were at 8%, just behind the Green Party, 10%, and the Liberal Democrats, 9%.
Intriguingly, the report suggest the Brexit Party has drawn supporters from UKIP following Farage’s departure – after quitting UKIP late last year, Farage slammed the party as Islamophobic.
This is an improvement from polls carried out just days ago, which showed support for the Brexit Party climbing, though it was still behind the two dominant parties and UKIP.
According to the latest reading, a large number of Brexit Party backers are former Tories who are furious at Theresa May.
During the party’s launch, Farage, who was flanked by Aunnunziata Rees-Mogg, the sister of Jacob Rees-Mogg, said: “I do believe that we can win these European elections and that we can again start to put the fear of God into our members of parliament in Westminster. They deserve nothing less than that after the way they’ve treated us over this betrayal.”
Farage heralded the latest poll results on Twitter:
Nigel Farage
✔@Nigel_Farage
There is a long way to go, but it is clear that there is a desire to change politics for good.
Positive vibes!
Britain Elects@britainelectsEuropean Parliament voting intention:
BREX: 27%
LAB: 22%
CON: 15%
GRN: 10%
LDEM: 9%
UKIP: 7%
CHUK: 6%via @YouGov, 15 – 16 Apr
Anthony Wells, YouGov’s director of political research, attributed the party’s popularity to ‘good branding.’
“They’ve got very good branding – it does what it says on the tin. If you want to say ‘I support Brexit’ you’ve got a party there that is called the Brexit Party. That probably does help them in away that Change UK does not help The Independent Group.”
He also credited the bump to publicity from their launch.
“Some of the surge is that people didn’t realise that Nigel Farage is now the Brexit Party not Ukip, but some of it might be that it is in the immediate aftermath of them getting lots of publicity from their launch.”
Farage led UKIP to victory in the 2014 European Parliament elections, when it topped the poll with 26.6% of the vote. But the party’s popularity has plunged under new leader Gerard Batten.
If Farage succeeds in leading the Brexit Party – which he said has dozens of candidates ready to participate in the race – to victory, then Brussels will have a serious problem on its hands: A coalition of anti-establishment eurosceptics from Italy, Hungary, Poland, the UK and elsewhere who will form a significant plurality in the European Parliament.
end
Germany/Deutsche Bank
The world’s largest derivative player Deutsche bank and hopelessly offside on many of those trades is scrambling for another plan with the abandonment of the Commerzbank merger
(courtesy zerohedge)
Deutsche Bank Is Scrambling For A ‘Plan B’ To Justify Abandoning Commerzbank Merger Talks
The fraught, government-assisted courtship of troubled German banking giants Deutsche Bank and Commerzbank has hit yet another snag. According to a series of reports published Thursday morning, concerns about a mass defection of mutual clients moving some, or all, of their business is giving Deutsche Bank – long reputed to be the more reluctant partner – cold feet.
Deutsche CEO Christian Sewing is reportedly trying to devise a ‘Plan B’ to pitch to investors who support the tie-up. These investors are reportedly demanding that if Deutsche doesn’t go ahead with the merger, it must come up with a plan to turnaround its struggling business as its streak of declining revenue is widely expected to continue.
However, while investors are demanding that the bank try ‘something different’, the options reportedly under consideration (as described by Bloomberg) sound like more of the same: They include a) more cost cuts, focusing on DB’s investment bank and b) a nebulous ‘strategy shift’ that would involve more upfront costs. However, Sewing must at least find a way to paint the turd gold, so to speak, since a return to his original strategy simply ‘wouldn’t be credible’.
In another sign that the deal could be headed for the rocks, BBG noted that after five weeks of talks, the two banks are apparently no closer to a deal. Meanwhile, more Social Democrats, the party of finance minister Olaf Scholz – who is perhaps the biggest proponent of a merger, which he hopes will create a new German ‘national champion’ to support its industrial sector – are siding with the labor unions from the two banks, which have warned that a merger could lead to the loss of 40,000 jobs.
Yet even after senior ECB policymakers reportedly expressed skepticism about the deal, the talks have continued, perhaps because two other European lenders, Italy’s Unicredit and Dutch ING, have expressed an overt interest in buying Commerzbank.
Deutsche Bank Supervisory Board Chairman Paul Achleitner has said DB will give an update by April 26, when DB’s Q1 earnings are due out. Commerzbank has been pushing for an earlier update.
But in a sign that critics of the deal (of which there are many, including the Qatari wealth funds that are among the biggest shareholders in the two banks) are making headway in trying to stop it, the Financial Times reported that the prospects for ‘revenue attrition’ are why DB is suddenly getting nervous. BBG added that doubts about cost savings and the battle to raise capital to finance the deal are also among the bank’s concerns.
In another area where the two banks don’t see eye to eye, Deutsche Bank’s estimates for how much revenue would be lost as a consequence of the deal are significantly higher than Commerzbank’s.
Deutsche Bank and Commerzbank are at odds over how many clients would ditch the Frankfurt-based rivals if they merged, highlighting one of the many obstacles to a deal that could transform the face of German banking. Many companies in Germany are clients of both Deutsche and Commerzbank.
Some of them are expected to move parts of their business to rival lenders if the merger happens to avoid becoming overly dependent on a single lender. Deutsche’s internal estimates suggest that this would result in lost revenue of slightly more than €1bn a year, or about 3.5 per cent of the two lenders’ combined pro forma revenue of €33.5bn.
Commerzbank’s view is much more benign, however. It expects that the merged group will suffer only about half of the revenue losses its larger rival is predicting, people familiar with the matter told the Financial Times.
For what it’s worth, JPM’s estimates are more in line with Commerzbank’s.
Kian Abouhossein, analyst at JPMorgan, estimated earlier this year that about 2.5 per cent of joint revenue — or just under €900m by 2021 — would disappear “due to [an] overlap in clients and businesses”. He estimated the merged group would have its “biggest overlap in Mittelstand, followed by international corporates, financial institutions and small business customers”.
But in a ironic twist, it’s looking increasingly plausible that Deutsche Bank’s track record of being “the biggest money laundering bank in the world” – as Maxine Waters so eloquently put it – might end up sinking the deal that its CEO so clearly doesn’t want. According to a separate report in the FT citing internal Deutsche Bank sources, the bank has reportedly estimated that it processed at least €175 million ($197 million) of dirty money for Russian criminals between 2011 and 2014. The bank is bracing itself for fines and litigation. And this doesn’t include the €160 billion ($180 billion) in ‘suspicious’ money that it processed on behalf of Danske Bank’s Estonian branch.
Regulatory concerns about AML might be one potential out for DB. But if the bank really must come up with a ‘Plan B’ if it wants to justify abandoning the talks without risking shareholder backlash, well, we can only think of one realistic alternative: Let Deutsche Bank fail.
5.RUSSIAN AND MIDDLE EASTERN AFFAIRS
TURKEY
I am moving the scale to Defcon One on Turkey.
You will recall that last month, we highlighted that fact that Turkey burnt through 1/3 of its reserves. Then miraculously their reserves rose from $25 billion up to $28 billion upon which we witnessed a slight rally in the Lira. However what Erdogan did was borrow dollars from the banks to shore up his reserves and moved the liability off balance sheet. The true total of these swaps: 13 billion dollars. As of last night Turkey has about 11 billion dollars of true reserves if we subtract the swaps which are owed to Turkish banks. I am moving to Defcon I as Turkey does not have enough dollar assets to pay for 177 billion dollars of liabilities coming due this year.
Also, part of the 11 billion dollar reserves is gold. Turkey has 261 tonnes of gold to its credit (see below) and that works out to 10 billion dollars. It means that if you subtract the 10 billion dollars from the 11 billion in total net reserves, Turkey is now done to its last one billion dollars.
Turkey is of eastern set find with respect to gold. They would rather default on their USA dollar obligations than sell their gold in total contrast to that bozo, Maduro in Venezuela
this a is why I am moving to Defcon 1 in Turkey.
(courtesy zerohedge)
“They Don’t Have Enough”: How Turkey Is Misrepresenting Its FX Reserves By 100%
Three weeks ago, when Turkey was scrambling to defend the lira ahead of local municipal elections, a potentially destabilizing event which saw significant selling of the currency (and which ended up badly for Erdogan’s ruling AKP party, which lost control of the two most important cities, Ankara and Istanbul), we reported that “the Turkish central bank had burnt through at least a third of its foreign reserves in March in an effort to stem a plunge in the lira”,in a repeat of the crisis that engulfed the lira last summer and triggered a blast of inflation and the first recession in a decade, and was “putting the country on path to a full-blown currency and funding crisis.”
And despite what was a clear, continued central bank defense of the Turkish lira since then, Turkey’s official reserves actually appeared to rise, in what was meant to telegraph confidence in the currency and give the impression that the lira was stable without continued central bank support.
There was just one problem: the central bank appears to have been if not lying, then grossly misrepresenting the true state of the country’s foreign reserves .
As it turns out, Turkey has been pulling a financial trick popularized by China’s PBOC for the past several years, and according to the FT, the country’s central bank was propping up its foreign currency reserves with billions of dollars of short-term borrowed money, “raising fears among analysts and investors that the country is overstating its ability to defend itself in a fresh lira crisis.”
After tumbling from a recent high of $34 billion to $25 billion at the end of March, Turkey reported that the net foreign reserves held by the central bank stood at $28.1 billion in early April — a sum which the FT notes was already believed to be inadequate because of Turkey’s heavy need for dollars to cover debt and foreign trade. But what the Financial Times uncovered is that this total was “enhanced” by a surge in the use of swaps, or short-term borrowings, since March 25. Stripping those swaps out, the total is an alarmingly low $16 billion, an amount which could be depleted in just months, if not weeks,especially if the news of the CB’s plunging reserves creates a self-fulfilling prophecy in which lira holders rush to convert their currency before the central banks runs out of dollars.
The chart below shows two sets of numbers: Turkey’s true net foreign reserves, and the number that the central bank had used for public consumption, which includes the nominal amount of swaps.
Confirming the FT’s analysis, a former senior official at Turkey’s central bank, who did not wish to be named (as it would mean an instant prison sentence by the country’s “executive president”), said the extra dollars had been borrowed, not earned. “This is not an orthodox [approach to] central bank reserve build-up.”
To be sure, the Turkish currency market has been a shitshow for the past month: at the end of March, just days ahead of the elections, Turkey pulled another popular Chinese trick, when in an attempt to crush speculators and lira shorts, it briefly pushed up its overnight swap rates to 1350%, a level which resulted in swift condemnation from the international finance community which was furious at the ridiculous tricks pulled by the Erdogan government, as it instantly locked up the local financial system making international currency transfers impossible.
Then, once the central bank realized it couldn’t keep swap rates at stratospheric levels for long, it decided to change its approach, and opted to lie about its reserve situation instead. So, starting roughly around the time the overnight swap rate collapsed back to normal on March 28…
… the central bank’s use of swaps exploded, rising from virtually nothing to as much as $13bn by April 8, and a sharp increase from January 1 — March 25, when borrowing never exceeded $500m, according to the central bank’s own figures. And as one would expect, when adding the impact of the swaps, the bank’s reserve figures started to climb again… but as shown in the top chart, the real number excluding the borrowings, was far lower.
What exactly are these swaps? Stated simply, this is money that Turkey borrowed from the country’s commercial banks, which just so happens, are flush with dollars after individuals and companies flocked to hard currency as a haven.
For those following the fund flows, this circular arrangement was a delightfully Machiavellian construct by Erdogan: first, as a result of its collapsing reserves, the central bank prompted fears among the local population that its funding situation was unsustainable, forcing a surge in lira to dollar conversions among the local population (and foreign speculators). However, since the dollars that were received following the conversion were parked with the local banks, the central bank had easy access to use them – in the form of swaps – and as it received more dollars from the commercial banks, it not only could defend the lira further, using the people’s money against them, but also misrepresent the true level of its net foreign reserves!
To be sure, if and when this check kiting scheme was exposed, it would lead to even greater panic as a second wave of lira selling would ensue, as not only was the true level of reserves lower, but the central bank was in effect leveraging commercial banks’ own dollar holdings in its defense of the currency. In doing so, if and when this valiant defense – which most likely will culminate with another IMF bailout – fails, then the commercial banks would go down too, as bank clients, realizing all their dollar deposits had been quietly carted over to the central bank, would be, how should we say it… furious.
This also explains why, as the FT further note, “five other investors and analysts who have closely studied the bank’s activities in recent weeks spoke on condition of anonymity to the FT about their concerns over the reserves. Several of them were fearful of speaking out on the issue after Turkish regulators launched probes into JPMorgan last month over its advice to clients to sell the lira.”
Investors said they were worried about this practice of using one-week currency swaps, in which liras are exchanged for US dollars with local banks with an agreement to later reverse the transaction. They believe that this borrowing has flattered the central bank’s reserves data.
Some investors argue that the borrowed money should be stripped out of net foreign reserve data, leaving a remaining sum that is well below $20bn.
Responding to the FT, the central bank reluctantly confirmed that dollars borrowed in the first part of these transactions are added to the balance sheet. The obligation to later repay the dollars is recorded as an “off balance sheet item”, which is precisely why Turkey is doing this entire scheme to make its reserves appear far greater than they are in reality.
Naturally, the use of such reserve-masking swaps “sharpened fears that began to gather last month that the bank was burning through its hard currency to hold the lira steady in the run-up to local elections on March 31. The central bank declined to comment on whether it has intervened in this way.”
The impact of the swaps transactions is most vividly illustrated in the central bank’s daily balance sheet, which contains figures for foreign assets and liabilities that have been intensely scrutinised by analysts in recent weeks. Another way of representing the chart up top, net foreign assets — calculated by subtracting the bank’s foreign liabilities from its assets and converting into dollars — have risen and fallen in parallel with the amount borrowed through swaps. The net foreign assets figure — a proxy for how much assets Turkey has to continue defending the onslaught of lira sellers — slumped by $9.4bn between March 6 and March 22 to $19.5bn, the lowest level on a US dollar basis since 2007.
Where things get interesting is what happened next: by April 5, the net reserve figure had swelled to $23.6BN, boosted by an increase in swaps. However, excluding swaps, net foreign assets have stood at less than $11.5bn during the entire month of April, down from $28.7bn at the start of March on the same basis.
In other words, Turkey is officially misrepresenting its current reserves by as much as 100% just to give the impression that it can continue defending the lira, when in reality is it using the very same dollars – swapped out from commercial banks – that the local population had converted into dollars as part of their flight away from the lira.
The condemnation from the analyst community was brutal: Piotr Matys, an emerging market currency strategist at Rabobank, said the use of swaps seemed to be “some sort of window dressing” to create the impression of higher reserves.
Furthermore, it is very likely that Turkey has been using these very swaps to support the lira. The central bank did not directly respond to an FT question about the use of funds, nor to a question about whether it used measures to prop up the currency since March 31 elections. However, it did say “a variety of factors could account for the shifting total.”
With little left in its defense, the central bank has demanded that analysts are wrong to focus on a net international reserves figure that is published once a week, and instead stressed that international reserve adequacy measures used the gross figure to test a country’s preparedness. And while Turkey’s gross foreign reserves stood at around $77BN in the first week of April, that number too is irrelevant considering the elephant in the room which we discussed last summer: Turkey has $177bn in short-term external debt coming due in the next 12 months; it has nowhere near the funds to repay it, virtually assuring some form of default and IMF bailout is inevitable.
“There’s a general unease about what’s going on behind the scenes,” said Tim Ash, an emerging markets strategist at BlueBay Asset Management. A lack of transparency was undermining the bank’s already fragile credibility, he warned.
“The bottom line is that they don’t have enough, whether it’s net or gross,” Ash added. “Everyone in the market knows that Turkey doesn’t have enough foreign currency reserves to mount a sustained and credible defence of the lira.”
The only question is when will the price of the lira, which at the current level of 5.75 vs the dollar is wildly overvalued, start reflecting Turkey’s dismal situation.
Gold Reserves in Turkey increased to 261.10 Tonnes in the first quarter of 2019 from 253.50 Tonnes in the fourth quarter of 2018. Gold Reserves in Turkey averaged 126.59 Tonnes from 2000 until 2019, reaching an all time high of 261.10 Tonnes in the first quarter of 2019 and a record low of 116.10 Tonnes in the third quarter of 2001.
6.GLOBAL ISSUES
7 OIL ISSUES
8. EMERGING MARKETS
INDIA//BOEING/USA
Jet Airways will no doubt head into bankruptcy court as their banks pull liquidity. What is worth noting is that Jet airways has orders for 75 Boeing 737 Max 8 planes worth billions and that will certainly have a devastating effect on future production at Boeing
(courtesy zerohedge)
India’s Formerly Largest Airline Plummets As Banks Pull Liquidity, Bankruptcy Imminent
Jet Airways, once India’s largest airline by market cap, has been forced to immediately halt operations after Indian banks refused to furnish emergency funds, leading to a liquidity crisis that looks to have bankrupted the airline.
The Indian carrier said in a statement Wednesday that it would suspend all flights, capping weeks of speculation over the airlines fate. The news sent its shares plunging 34% in Mumbai on Thursday as bankruptcy appeared unavoidable.
In its statement, Jet Airways said it was informed by a consortium of government-run lenders on Tuesday that the airline’s request for emergency funds had been refused. The decision could create problems for Prime Minister Nahrendra Modi, who is in the middle of the ‘largest election in history’ as 900 million Indians take to the polls to decide whether a coalition led by his Bharatiya Janata party will remain in power (though early results suggest that it will, and if Modi truly felt vulnerable, he could always stir up some more trouble with Pakistan to shore up support). Modi’s opponents have latched on to his failure to create jobs and bolster India’s economy. If Jet does shut down, it would put 20,000 jobs at risk.
“Above all, the airline would like to express its sincere gratitude to all its employees and stakeholders that have stood by the company in these trying times,” it said in its statement.
At this point, the only way the airline could be saved would be if a private buyer swoops in to buy 75% of the company and recapitalize it. Jet’s banks are working with the company to find such a suitor, but whether it happens remains to be seen. Abu Dhabi’s national carrier Etihad Airways, which bought a 24% stake in Jet six years ago, has been rumored as a possible buyer, though it has problems of its own after losing about $4.9 billion in three years. Etihad said it would help accommodate passengers affected by Jet’s cancellations.
“We continue to work with Jet management, lenders and key stakeholders in the context of the lender-managed effort to restructure the company,” an Etihad spokesperson added.
Jet isn’t India’s only troubled airline. Air India, the country’s national carrier, is subsisting on billions in taxpayer money following an aborted privatization attempt last year.
Jet Airways✔@jetairways
With deep sadness and a heavy heart we would like to share that, effective immediately, we will be suspending all our domestic and international flight operations.
More: http://Bit.ly/9WImportantUpdate …
But there’s another dimension to Jet’s problems. In November 2016, Jet Airways ordered 75 Boeing 737 MAX 8s. Only a few of them have been delivered (Jet was the first airline to deploy the 737 in India). That could spell big trouble for Boeing, because most of those planes were still on back-order, and the fate of that order is now uncertain. This could amount to billions of dollars of lost revenue for Boeing at a time when new orders for the planes have stopped amid a global grounding of flights, forcing Boeing to cut back on production.
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 AM….
Euro/USA 1.1254 DOWN .0042 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /GREEN EXCEPT LONDON
USA/JAPAN YEN 111.93 down .108 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…
GBP/USA 1.3013 DOWN 0.0024 (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//
USA/CAN 1.3374 UP .00024 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)
Early THIS THURSDAY morning in Europe, the Euro FELL by 42 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1254 Last night Shanghai COMPOSITE CLOSED DOWN 12.92 POINTS OR 0.40%.
//Hang Sang CLOSED DOWN 161.85 POINTS OR 0.84%
/AUSTRALIA CLOSED DOWN .01%// EUROPEAN BOURSES //GREEN EXCEPT LONDON
The NIKKEI: this THURSDAY morning CLOSED DOWN 187.85 POINTS OR 0.84%
Trading from Europe and Asia
1/EUROPE OPENED GREEN EXCEPT LONDON
2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 161.42 POINTS OR 0.54%
/SHANGHAI CLOSED DOWN 12.92 POINTS OR 0.40%
Australia BOURSE CLOSED DOWN .01%
Nikkei (Japan) CLOSED DOWN 187.85 POINTS OR 0.84%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1275.35
silver:$14.97
Early THURSDAY morning USA 10 year bond yield: 2.56% !!! DOWN 3 IN POINTS from WEDNESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%.
The 30 yr bond yield 2.97 DOWN 2 IN BASIS POINTS from WEDNESDAY night.
USA dollar index early TUESDAY morning: 97.30 UP 29 CENT(S) from WEDNESDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \12: 00 PM
Portuguese 10 year bond yield: 1.17% DOWN 4 in basis point(s) yield from WEDNESDAY/
JAPANESE BOND YIELD: -.03% DOWN 2 BASIS POINTS from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.07% DOWN 4 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 2.60 DOWN 1 POINTS in basis point yield from WEDNESDAY/
the Italian 10 yr bond yield is trading 153 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: RISES +.02% IN BASIS POINTS ON THE DAY//
THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.58% AND NOW ABOVE THE THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…
END
IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1239 DOWN .0057 or 57 basis points
USA/Japan: 111.95 DOWN 0.088 OR YEN UP 9 basis points/
Great Britain/USA 1.3004 DOWN .0034 POUND DOWN 34 BASIS POINTS)
Canadian dollar DOWN 25 basis points to 1.3375
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The USA/Yuan,CNY closed AT 6.7090 0N SHORE (down)
THE USA/YUAN OFFSHORE: 6.7080 (YUAN DOWN)
TURKISH LIRA: 5.8029..
the 10 yr Japanese bond yield closed at -.03%
Your closing 10 yr USA bond yield DOWN 3 IN basis points from WEDNESDAY at 2.56 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2,97 DOWN 2 in basis points on the day /
Your closing USA dollar index, 97.38 UP 37 CENT(S) ON THE DAY/1.00 PM/
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 12:00 PM
London: CLOSED DOWN 8.64 0.12%
German Dax : UP 59.55 POINTS OR 0.93%
Paris Cac CLOSED UP 13.94 POINTS OR 0.25%
Spain IBEX CLOSED UP 27.40 POINTS OR 0.29%
Italian MIB: CLOSED DOWN 44.29 POINTS OR 0.20%
WTI Oil price; 63.64 1:00 pm
Brent Oil: 71.75 12:00 EST
USA /RUSSIAN / ROUBLE CROSS: 63.91 THE CROSS HIGHER BY 0.09 ROUBLES/DOLLAR (ROUBLE LOWER BY 9 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +.02 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 : 64.00
BRENT : 71.94
USA 10 YR BOND YIELD: … 2.56… STILL DEADLY//
USA 30 YR BOND YIELD: 2.96..STILL DEADLY
EURO/USA 1.1229 ( DOWN 67 BASIS POINTS)
USA/JAPANESE YEN:111.97 UP .060 (YEN DOWN 6 BASIS POINTS/..
USA DOLLAR INDEX: 97.45 UP 44 cent(s)/
The British pound at 4 pm: Great Britain Pound/USA:1.2983 DOWN 55 POINTS
the Turkish lira close: 5.7925
the Russian rouble 63.93 DOWN 11 Roubles against the uSA dollar.( DOWN 11 BASIS POINTS)
Canadian dollar: 1.3385 DOWN 34 BASIS pts
USA/CHINESE YUAN (CNY) : 6.7090 (ONSHORE)/
USA/CHINESE YUAN(CNH): 6.7097 (OFFSHORE)
German 10 yr bond yield at 5 pm: ,+0.02%
The Dow closed UP 110.00 POINTS OR 0.42%
NASDAQ closed UP 1.98 POINTS OR 0.02%
VOLATILITY INDEX: 12.17 CLOSED DOWN .43
LIBOR 3 MONTH DURATION: 2.591%//
FROM 2.600
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
Trump Pumps, Dow Jumps, Small Caps Slump, Healthcare Dumps
Fun-durr-mentals…
Just seemed timely… YOU WILL ENJOY THIS TAPE FROM YEARS AGO!
For the second day in a row, Chinese markets flatlined…
Volatile day in European stocks to end the short-week as PMIs hit. Italy was weaker on the day and Germany best on the week…
Small Caps suffered on the week as Trannies and The Dow managed gains ahead of the long weekend…
This was the 2nd worst week for Small Caps relative to Mega Caps in 5 months…
Technology’s role as the best-performing equity sector during this year’s ferocious rally has it trading at more than 19.2 times forward 12-month earnings, a level it hasn’t reached since 2007.
As Bloomberg notes, valuations are a notoriously poor tool for market timing, and forward earnings estimates could prove to be too low, so this alone shouldn’t necessarily serve as a sell signal. However, notice the divergence in fortunes between tech and health care that’s left the former trading at almost 1.4 times the forward valuation of the latter. That’s a rather extreme divergence that seems like a good candidate for mean reversion.
The Healthcare sector continued to puke today, making it the worst week since 2018, but we note that it found support at the 100DMA…
Breadth is starting to fade and yesterday was an outside day closing lower…
Treasuries round-tripped early week losses with yields tumbling the last 24 hours back to unchanged on the week…
The Dollar Index (DXY) surged today (by the most in a month) bouncing off the 97.00 level once again as German Manufacturing disappointed sending the EUR tumbling…
Crytpos continue to have a good week with Ethereum and Litecoin best today…
Gold had an ugly week as silver broke-even, copper tumbled today…
Gold’s 3rd worst week in 5 months (Silver best week relative to gold since the start of the year), back in the red for 2019…
WTI has traded sideways for almost two weeks – unable to break the Fib61.8% retracement…
Gas prices are up a record 65 days in a row…
Finally, US economic is the worst in the world as China’s soars…
Probably nothing!!
end
MARKET TRADING/ EARLY AFTERNOON TRADING
ii)Market data/
Retail sales were expected to rebound in March and it did..it rose by 1.6%
(courtesy zerohedge)
US Retail Sales Surge Most Since 2017
Having re-slumped in February, after bounding back from December’s plunge, US Retail Sales were expected to rebound solidly in March (as analysts projected auto sales and a bounce in gas prices would help) and it did.
Headline retail sales rose 1.6% MoM in March (crushing the 1.0% expected) – the strongest monthly surge since Sept 2017.
Under the hood, every single category rose in April except sporting goods, hobby, and book stores…
While Autos and gas stations soared…
Core retail sales (ex autos and gas stations) rebounded notably in March after it plunged in February…
Everything is awesome again – like it was in January, remember?
US Services PMI Crashes To 2-Year Lows, Signals GDP Slump
While all eyes focused on retail sales rebound in March, the flash US composite PMI plunged to 31-month lows in April,led by a collapse in the Services economy, catching down to the Manufacturing side.
- Flash U.S. Composite Output Index at 52.8 (54.6 in March). 31-month low.
- Flash U.S. Services Business Activity Index at 52.9 (55.3 in March). 25-month low.
- Flash U.S. Manufacturing PMI at 52.4 (52.4 in March). Unchanged.
So it seems ‘hard data’ was right after all and ‘soft’ surveys wrong…
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:
“The US economy started the second quarter with its weakest expansion since mid-2016 as businesses reported a marked slowing in output, new orders and hiring.
“The survey indicates that the manufacturing downturn seen in the first quarter has persisted into April, but growth in the service sector has now also slumped to a two-year low as the malaise showed further signs of spreading beyond the factory sector.
“April also saw firms become more reluctant to hire as a result of weaker order book growth, pushing jobs growth to a two-year low. The survey’s headline employment index is indicative of non-farm payrolls growing by 130,000 in April, well below the 198,000 average indicated in the first quarter.
“A drop in price pressures meanwhile suggests that inflationary pressures continued to moderate,signalling that annual consumer price inflation could drop below 1% in coming months, as pricing power fades alongside weaker demand.
“While the overall rate of growth and job creation being signalled remain relatively solid, the slowdown likely has further to run. Companies’ expectations of future growth slid to one of the lowest levels seen since comparable data were first collected in 2012. Only mid-2016 has seen gloomier business prospects.”
And finally, Williamson notes that GDP is expected to slow dramatically…
“The April surveys are consistent with GDP rising at an annualised rate of just under 2%, with the official measure of manufacturing production remaining in decline.
end
The soft data Philly Fed Manufacturing Index for April declines and we are at a 3 yr low
(courtesy Market Watch)
Philly Fed manufacturing index declines in April as outlook drops to three-year low
Apr 18, 2019 8:36 a.m. ET
MarketWatch
The numbers: The Philadelphia Fed said its manufacturing index for April declined to a reading of 8.5 in April from 13.7 in March.
Economists polled by MarketWatch expected a reading of 11. Any reading above zero indicates improving conditions.
What happened: While the new-orders index jumped, climbing 14 points to a reading of 15.7, the current shipments fell 2 points, and deliver times fell to its negative reading in 30 months. The current inventory index fell by 15 points to 2.6.
The index on the outlook for future activity fell to its lowest reading since February 2016.
The big picture: Manufacturing has struggled of late, with the Federal Reserve reporting that industrial production in the first quarter was the weakest since the third quarter of 2017, as the New York Fed said the outlook for manufacturing in its region was “subdued.”
The combination of a strong dollar, weak overseas growth, trade tensions and diminishing fiscal impetus have held manufacturing back.
-END-
iii)USA ECONOMIC/GENERAL STORIES
Zero hedge echos Michael Snyder as we see bricks and mortar operations collapse in 2019
(courtesy zerohedge)
Shopocalypse Now! 5,994 Stores Already Closed In 2019, Blowing Past 2018’s Full Year Total
2018 ended on an optimistic note for retailers with strong consumer spending “data” and what was widely considered to be an unexpected comeback for many brick and mortar stores. While that may have been fun while it lasted, the carnage and pressure on the retail sector has once again been ramped backed up, resulting in a breakneck pace for store closings to start 2019.
In a start to the year that can only be described as absolutely demoralizing for the industry, 5,994 stores have closed in the US so far this year, which is already more than last year‘s total of 5,864, according to Real Deal and WSJ. And retail sales have begun falling again recently, down 0.2% in February from a month earlier, after being up 0.7% in January. Retail sales fell 1.2% in December.
Mall vacancy rates ticked up in the first quarter to 9.3% from 9% in the fourth quarter of 2018.
Ana Lai, an analyst at S&P Global Ratings said: “I don’t think malls are out of the woods yet.”
S&P still has a negative outlook on the United States retail sector overall and predicts that roughly 12 of the 136 retailers that it rates will wind up defaulting this year. This is an astonishing four times the average annual rate.
And as retailers continue to struggle, mall owners are also facing financial difficulties. Some malls have even pushed back their opening dates. For instance, the opening of the American Dream retail and entertainment center in the Meadowlands in New Jersey, which was originally supposed to open in the spring, has already been pushed back to late summer. The Empire Outlets shopping center on Staten Island is now scheduled to open in May, after it was initially planned to open last fall.
Finally, one of the country’s largest malls, Destiny USA in Syracuse, recently saw its mortgage taken over by a special servicer. And even though the mall owner, Pyramid Management Group, says that it is trying to discuss an extension, the servicer is expecting a default from the owner in June.
A Pyramid spokesperson said:
“Destiny USA has experienced tenant closures, just as other properties across the country have on the brick and mortar front. We have and will continue to fill those spaces with new and exciting uses as we work to ensure the health, vibrancy and longevity of the center.”
Just four months into 2019, we have already seen bankruptcies or store closings from companies like Payless Shoesource, Gymboree and Charlotte Russe.
UBS has estimated that another 75,000 stores will have to close by 2026 if online retail continues to rise from its current 16% market penetration to its expected 25%.
We documented in early March when major chains such as Gap, JCPenney, Victoria’s Secret and Foot Locker all announced massive closures, totaling more than 465 stores over the course of just 48 hours. Back in February, we noted that default rates on retail junk bonds had risen to 10.2% as of December, according to Fitch Ratings, more than double the level from the same period in 2017.
END
With Bernie Sanders gaining in popularity, the USA populace seem to want the Canadian “Medicare” system. Trust me..it is not good as you must wait months for specialized procedures. And I can vouch for that personally. However once you get procedures done..the medical care is A one.
(courtesy zerohedge)
Healthcare’s Hemorrhaging As Medicare-For-All Massacre Continues
For the fifth day of the last six, healthcare stocks are getting hammered as fears that ‘Socialist Democrats’ great experiment with ‘Medicare for All’ are growing…
As we noted previously, the slide, as Bloomberg notes, started on Tuesday when insurance giant and sector bellwether UnitedHealth Group waded into the debate over “Medicare for All,” which would expand government-administered coverage to most of the population and rewrite the businesses of U.S. health insurers, hospitals and doctors.
And while this socialist policy is still a longshot to become law – despite the backing of some prominent contenders for the Democratic presidential nomination such as Bernie Sanders – the proposal threatens to upend company stock prices.
end
The important trucking data, Cass Freight Shipment index contracts for the 4th consecutive month. This confirms that the USA economy started to contract around November 2018
(courtesy Mish Shedlock)
U-Turn In Trucking: Cass Freight Shipment Index Contracts For 4th Consecutive Month
Authored by Mike Shedlock via MishTalk,
The Cass Freight Index, a measure of truck shipments is down for the fourth consecutive month year-over-year.
Please consider the Cass Freight Index Report for March 2019.
The Cass Freight Index was one of the first freight flow indicators to turn positive (in October 2016) and confirm our prediction of a recovery in the U.S. economy. Beyond our concern that the Cass Freight Shipments Index has been negative on a YoY basis for the fourth month in a row. Bottom line, the data in coming weeks will indicate whether this is merely a pause in the rate of economic expansion or the beginning of an economic contraction.
- We are concerned about the severe declines in international airfreight volumes (especially in Asia) and the recent swoon in railroad volumes in auto and building materials
- We are reassured by the sequential increase in the Cass Freight Shipments Index (up 2.0%) and the volumes in U.S. domestic trucking (especially in truckload dry van)
- We are closely watching the volumes of chemicals and other shipments via railroad, as they have lost momentum in recent weeks and may give us the first evidence of the global slowdown spreading to the U.S.
Shipments vs GDP
U-turn in Trucking
J.B. Hunt, the largest US trucking company had this to say: “Volume, or lack thereof, is obviously the main story.” The inventory pile-up hurts. And the driver shortage is ending.”
Wolf Richter provides excellent commentary.
Wolf Richter@wolfofwolfstLargest US Trucking Company Details U-Turn of Trucking Boom. J.B. Hunt: “Volume, or lack thereof, is obviously the main story.” The inventory pile-up hurts. And the driver shortage is ending.https://wolfstreet.com/2019/04/16/largest-us-trucking-company-details-u-turn-of-trucking-boom/ …
Orders, Miles Sink
Reuters reports Truck Drivers See Orders, Miles Fall in Latest U.S. Slowdown Signal.
“There’s no doubt that we have been seeing a deceleration in volumes,” said Bob Costello, chief economist for the American Trucking Associations (ATA).
“This is an indication that the economy is decelerating.”
Life Support
The global economy is on life support. We have simultaneous slowdowns in the US, China, and the EU.
Trump’s tax cuts were a year too early to help his election chances, but he might win anyway.
A trade deal with China will not affect this picture.
END
SWAMP STORIES
This ought to be good…It seems that the FBI during the Obama Presidency drafted a secret and highly classified memo regarding the sending of classified emails on Hillary Clinton’s server. Somehow the FBI did not send the memo to Sally Yates. Senate leaders want to know why. They have now sent the letter off to Michael Horowitz for his investigation
(courtesy Sara Carter)
China Considers Stimulus to Boost Consumers, Ease Trade Risk
Officials are drafting measures to bolster sales of cars and electronics, according to people familiar with the matter… The proposals include subsidies for new-energy vehicles, smartphones and home appliances, and are at a consultation stage with other government branches, with no guarantee that they’ll be approved, the people said. The National Development and Reform Commission, which is said to have drafted the plan, didn’t immediately respond to a fax seeking comment…
Last night on “Hannity”, John Solomon said the plot to get Trump was hatched in January 2016 at a White House meeting – and he will report on this next week.
Trump has probably withheld declassification of FISA warrants and other documents for four reasons.
1) To thwart any trumped up Team Mueller/Weissmann chicanery
2) To decisively rebut Mueller’s Report
3) Prevent claims of obstruction
4) Political benefit: Ensure that any ugliness in the documents impacts the 2020 election
After today, the window for FISA and other sensitive document declassification opens.
@realDonaldTrump: Wow! FBI made 11 payments to Fake Dossier’s discredited author, Trump hater Christopher Steele. @OANN @JudicialWatch The Witch Hunt has been a total fraud on your President and the American people! It was brought to you by Dirty Cops, Crooked Hillary and the DNC.
Ex-SDNY prosecutor @AndrewCMcCarthy: Finding it very hard to listen to people who sneered ‘collusion’ for 2 yrs now complain that ‘spying’ has a sinister connotation.
Solomon: Ten post-Mueller questions that could turn the tables on Russia collusion investigators
Horowitz, my sources tell me, has interviewed between 50 and 100 witnesses in his exhaustive probe…
President Trump reportedly is readying an order to declassify five key buckets of documents on alleged FBI abuses… https://thehill.com/opinion/white-house/439234-ten-post-mueller-questions-that-could-turn-the-tables-on-russia-collusion
Senate Leaders Want Information on ‘Highly Classified’ FBI Memo about Clinton
The FBI drafted a secret and ‘highly classified’ memo in May 2016 regarding the bureau’s Midyear investigation into Hillary Clinton’s use of a private server that she used to send classified government emails but never submitted it to then Deputy Attorney General Sally Yates…
https://saraacarter.com/senate-leaders-want-information-on-highly-classified-fbi-memo-about-clinton/
Florida prosecutors say they will release video of Patriots owner Robert Kraft at massage parlor
[For no reason except to embarrass Kraft – another instance of prosecutorial abuse]
The Palm Beach prosecutor’s office initially said that sex trafficking occurred and was the basis for the investigation of the massage parlor.
Human trafficking ‘evil in our midst,’ Aronberg says in announcing prostitution arrests
A few days ago, the nefarious prosecutors’ office retracted claims of sex trafficking. So, the little men with badges will try to boost their big egos by gratuitously shaming Kraft, who is close friend of DJT. Aronberg, the prosecutor, is a Dem with designs on higher office according to the below article.
BBG: Beto O’Rourke defends his charitable giving after he released a tax return showing he and his wife donated about 0.3% of their income in 2017 [Gave his time & too many small payments to tract]
END
JUST A LITTLE NOTE WISHING ALL OF YOU A VERY HAPPY AND SAFE EASTER HOLIDAY WEEKEND
AND ALSO TO OUR JEWISH FRIENDS: A HAPPY AND KOSHER PASSOVER
harveyorganblog.com 