MAY 1//GOLD DOWN $1.20 TO $1282.80 AT COMEX CLOSE//SILVER DOWN 23 CENTS//IN ACCESS MARKET: GOLD DOWN TO $1276//SILVER DOWN TO $14.67//FOMC: DANGEROUS: THE FEDS’ LOWER IOER AS COLLATERAL AROUND THE WORLD DISAPPEARS//CHINA HAS A HUGE PHARMACEUTICAL PROBLEM WITH A MAJOR REPORTING ON A MONSTROUS 4.4 BILLION USA ACCOUNTING ERROR//RIOTING ON THE STREETS OF VENEZUELA AND IN FRANCE//MORE SWAMP STORIES FOR YOU TONIGHT//BILL BARR DESTROYS THE DEMOCRATS IN HIS APPEARANCE BEFORE CONGRESS//

 

 

FINALIZED

 

 

 

 

 

 

 

 

GOLD: $1282.80 DOWN $1.20 (COMEX TO COMEX CLOSING)

Silver:  $14.74 DOWN 23 CENTS  (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  $1276.00

 

 

silver: $14.67

 

 

JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)

today RECEIVING: 21/38

EXCHANGE: COMEX
CONTRACT: MAY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,282.800000000 USD
INTENT DATE: 04/30/2019 DELIVERY DATE: 05/02/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
657 C MORGAN STANLEY 2
661 C JP MORGAN 21
690 C ABN AMRO 5 2
737 C ADVANTAGE 16 7
800 C MAREX SPEC 10 8
905 C ADM 5
____________________________________________________________________________________________

TOTAL: 38 38
MONTH TO DATE: 88

 

 

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 38 NOTICE(S) FOR 3800 OZ (0.1181 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  88 NOTICES FOR 8800 OZ  (.2737 TONNES)

 

 

SILVER

 

FOR MAY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

1294 NOTICE(S) FILED TODAY FOR 6.470,000  OZ/

 

total number of notices filed so far this month: 2153 for 10,765,000oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :$5355  UP $33

 

 

Bitcoin: FINAL EVENING TRADE: $5294 UP  56

 

 

end

 

XXXX

 

 

 

 

 

Let us have a look at the data for today

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IN SILVER THE COMEX OI FELL BY A SMALL SIZED 676 CONTRACTS FROM 197,286 DOWN TO 196,610 DESPITE YESTERDAY’S 5 CENT RISE IN SILVER PRICING AT THE COMEX. ,LIQUIDATION OF THE SPREADERS HAVE STOPPED NOW THAT WE HAVE FINISHED WITH FIRST DAY NOTICE. 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 WEAK SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

 0 FOR MAY, 0 FOR JUNE, 862 FOR JULY AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  862 CONTRACTS. WITH THE TRANSFER OF 862 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 862 EFP CONTRACTS TRANSLATES INTO 4.31 MILLION OZ  ACCOMPANYING:

1.THE 5 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.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

AND NOW 16.810 MILLION OZ STANDING FOR SILVER IN MAY.

 

 

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

862 CONTRACTS (FOR 1 TRADING DAYS TOTAL 862 CONTRACTS) OR 4,31 MILLION OZ: (AVERAGE PER DAY: 862 CONTRACTS OR 4.310 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF MAY:  4.310 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 0.615% 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:          755.56    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

APRIL 2019 TOTAL EFP ISSUANCE:                                              182.87  MILLION OZ.

 

 

RESULT: WE HAD A TINY SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 676 DESPITE THE 5 CENT RISE IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A TINY SIZED EFP ISSUANCE OF 862 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 BANKERS RESUMED THEIR LIQUIDATION OF THE SPREAD TRADES TODAY.

 

TODAY WE GAINED A TINY SIZED: 186 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 862 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 676  OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 5 CENT RISE IN PRICE OF SILVER AND A CLOSING PRICE OF $14.97 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 UNDER 1 BILLION oz i.e. 0.986 BILLION OZ TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 1294 NOTICE(S) FOR  6,470,000 OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.  

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

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ   JANUARY AT  5.825 MILLION OZ.AND FEB 2019:  2.955 MILLION OZ/ MARCH: 27.120 MILLION OZ/  APRIL AT 3.875 MILLION OZ/ AND NOW MAY:  16,810,000 OZ..
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT).

 

IN GOLD, THE OPEN INTEREST ROSE BY A CONSIDERABLE SIZED 2422 CONTRACTS, TO 430,011 WITH THE RISE IN THE COMEX GOLD PRICE/(AN INCREASE IN PRICE OF $4.30//YESTERDAY’S TRADING).  

 THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A FAIR SIZED 3072 CONTRACTS:

APRIL 0 CONTRACTS,JUNE: 3072 CONTRACTS DECEMBER: 0 CONTRACTS, JUNE 2020  0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 430,011. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A GOOD SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 5495 CONTRACTS: 2422 OI CONTRACTS INCREASED AT THE COMEX  AND 3073 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 5495 CONTRACTS OR 549,400 OZ OR 17.09 TONNES.  YESTERDAY WE HAD A GAIN IN THE PRICE OF GOLD TO THE TUNE OF  $4.30….AND WITH THAT RISE, WE  HAD A STRONG GAIN IN TONNAGE OF 17.09 TONNES!!!!!!.?????????????????????????????????????????? 

 

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 3073 CONTRACTS OR 307,300 OR 9.558 TONNES (1 TRADING DAYS AND THUS AVERAGING: 3073 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 1 TRADING DAYS IN  TONNES: 9.558 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS 9.558/3550 x 100% TONNES =0.269% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     1838,38 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

APRIL 2019 TOTAL ISSUANCE:                 456.10 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 CONSIDERABLE SIZED INCREASE IN OI AT THE COMEX OF 2422 WITH THE RISE IN PRICING ($4.30) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A  CONSIDERABLE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 3073 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 3073 EFP CONTRACTS ISSUED, WE  HAD A STRONG GAIN OF 5495 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

3073 CONTRACTS MOVE TO LONDON AND 2422 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 17.09 TONNES). ..AND THIS STRONG DEMAND OCCURRED WITH A RISE IN PRICE OF $4.30 IN YESTERDAY’S TRADING AT THE COMEX.

 

 

 

we had:  38 notice(s) filed upon for 3800 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $1.20  TODAY 

 

NO CHANGE IN GOLD INVENTORY AT THE GLD

 

 

INVENTORY RESTS AT 746.69 TONNES

 

 

TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD.  IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY

 

SLV/

WITH SILVER DOWN 23 CENTS TODAY:

NO CHANGE IN SILVER INVENTORY AT 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 TINY SIZED 676 CONTRACTS from 197,286 DOWNTO 196,610 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…..THE SPREADERS HAVE STOPPED THEIR LIQUIDATION.

 

 

 

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.”

 

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., 0 FOR MAY, FOR JUNE 0 CONTRACTS AND JULY: 862 CONTRACTS  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 862 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 676 CONTRACTS TO THE 862 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A TINY GAIN OF 186  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 0.930 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ STANDING IN DECEMBER , 5.845 MILLION OZ STANDING IN JANUARY. 2.955 MILLION OZ STANDING IN FEBRUARY,  27.120 MILLION OZ FOR MARCH., 3.875 MILLION OZ FOR APRIL AND NOW 16.810 MILLION OZ FOR MAY

 

 

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 5 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A SMALL SIZED 862 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

)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSE //Hang Sang CLOSED   /The Nikkei closed Australia’s all ordinaires CLOSED UP 52%

/Chinese yuan (ONSHORE) closed UP  at 6.7353 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 63.57 dollars per barrel for WTI and 72.06 for Brent. Stocks in Europe OPENED GREEN//  ONSHORE YUAN CLOSED DOWN // LAST AT 6.7353 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7279/ TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

3A//NORTH KOREA/ SOUTH KOREA

NORTH KOREA

 

 

 

b) REPORT ON JAPAN

 

3 China/Chinese affairs

i)China/USA

looks like the uSA has caved on the big issue of cyber theft as  Trump seeks a trade deal at any cost

( zerohedge)

ii)China/

What a mess:  large Chinese drug maker discloses that thy have a huge $4.4 billion accounting fraud in their company. This is going to hurt a lot of Chinese investors.

( zerohedge)

iii)Washington warns Beijing that Chinese paramilitary “fishing boats” will not be treated like combatants.
( zerohedge)

 

4/EUROPEAN AFFAIRS

i)ASSANGE/UK

Assange is sentenced to 50 weeks  (the maximum) for skipping bail. He will not receive a fair trial in his extradition hearings

( zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)IRAN
Seems that the Iranian sanctions are working.  There is $1 billion in Iranian crude stranded at the port of Dalian.
( zerohedge)

 

6. GLOBAL ISSUES

i)Tom Luongo discusses Iran and North Korea.  We all know full well that North Korea needs to build a nuclear war head and Iran is developing long range missile systems.  No doubt both will join in their technologies to produce a nuclear missile.  Both leaders are appealing to Trump himself to negotiate..something that he is not willing to do.

( TomLuongo)

ii)Jeffrey Snider argues that we have entered into Eurodollar crisis No 4 due to scarcity of dollars.  This obvious lack of collateral is playing havoc to  investments around the world.  Expect Powell to cave and cut rates
(courtesy Jeffrey Snider)

 

 

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA

Venezuela pulls CNN and BBC off air. Venezuela  is a mess!

( zero hedge)

ii)Second day of unrest with Maduro claiming victory (so far). Pompeo now threatens military intervention with both Russia and China present in Venezuela.
( zerohedge)

 

 

9. PHYSICAL MARKETS

i)Hugo is again pounding the table that the USA is losing its hegemony as the world’s reserve currency

(Hugo Salinas Price)

 

ii)The Fed is again tinkering with another mechanism for the markets exchanging treasuries for cash and that would lower the Fed’s balance sheet of bonds etc.

(Cox/CNBC)

 

iii)Both Hemke and Reik believe gold will rise and they explain why

( Hemke/Reik/GATA)

 

iv)We brought you this story yesterday that Soc Generale is getting out of the precious metals business.  I wonder why?”

( Reuters)

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

 

 

MARKET TRADING//early this morning/TRADING

 

 

ii)Market data

a)Soft data report ISM (but generally reliable) reports a plunging USA mfg data and the data is at 2016 Oct lows. The report seems skeptical that demand will persist

( zerohedge)

b)This is not good:  Mortgage refis have now collapsed the most in 6 years despite the reversal in the rise of rates:
(courtesy zerohedge)

 

ii)USA ECONOMIC/GENERAL STORIES

SWAMP STORIES

i)The truth behind that letter Mueller wrote to Barr…in a nutshell, Mueller states to Barr that there is nothing inaccurate in the report only the fact that the media misinterpreted the stuff on obstruction

( zerohedge)

 

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A CONSIDERABLE SIZED 2422 CONTRACTS.TO A LEVEL OF 430,011 WITH THE GAIN IN THE PRICE OF GOLD ($4.30) IN YESTERDAY’S // COMEX TRADING

WE ARE NOW IN THE NON  ACTIVE DELIVERY MONTH OF MAY..  THE CME REPORTS THAT THE BANKERS ISSUED A  STRONG SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 3073 EFP CONTRACTS WERE ISSUED:

0 FOR JUNE ’19: 3073 CONTRACTS , DEC; 0 CONTRACTS: 0 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  3073 CONTRACTS.

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

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 5495 TOTAL CONTRACTS IN THAT 3073 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A CONSIDERABLE SIZED 2422 COMEX CONTRACTS.

 

NET GAIN ON THE TWO EXCHANGES : 5495 contracts OR 549,500 OZ OR 17.09 TONNES.

 

We are now in the NON active contract month of MAY and here the open interest stands at 188 contracts, having LOST 36 contracts. We had 50 notices served yesterday so we gained 14 contracts or an additional 1400  oz will stand as they guys refused to morph into a London based forward as well as negating a fiat bonus

The next contract month after May is June and here the open interest rose by 10 contracts up to 297,348.  After June the next active month is August and here the OI rose by 1217 contracts up to 62,102 contracts.

 

 

 

TODAY’S NOTICES FILED:

WE HAD 38 NOTICES FILED TODAY AT THE COMEX FOR  3800  OZ. (0.1181 TONNES)

 

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And now for the wild silver comex results.

Total COMEX silver OI FELL BY A SMALL SIZED 676 CONTRACTS FROM 197,286 DOWN TO 196,610(AND FURTHER FROM THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S SMALL OI COMEX LOSS OCCURRED WITH A 5 CENT RISE IN PRICING.//YESTERDAY.

 

 

WE ARE NOW INTO THE  ACTIVE DELIVERY MONTH OF MAY.  HERE WE HAVE 2243 OPEN INTEREST STAND SO FAR FOR A LOSS OF 1119 CONTRACTS.  WE HAD 859 NOTICES SERVED UPON TODAY SO IN ESSENCE WE LOST 260 CONTRACTS OR AN ADDITIONAL 1,300,000 OZ WILL NOT STAND FOR DELIVERY AS THESE GUYS MORPHED INTO LONDON BASED FORWARDS AND AS WELL THEY ACCEPTING A FIAT BONUS. SILVER MUST BE SCARCE AT THE COMEX AS WELL.

 

 

THE NEXT MONTH AFTER MAY IS THE NON ACTIVE MONTH OF  JUNE.  HERE THIS MONTH LOST 67 CONTRACTS DOWN TO 621. AFTER JUNE IS THE ACTIVE MONTH OF JULY, (THE SECOND LARGEST DELIVERY MONTH OF THE YEAR FOR SILVER) AND HERE THIS MONTH LOST 130 CONTRACTS UP TO 148,543 CONTRACTS.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 1294 notice(s) filed for 6,,470.000 OZ for the MARCH, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  234,508  CONTRACTS 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  218,228  contracts

 

 

 

 

 

 

 

 

 

INITIAL standings for  MAY/GOLD

MAY 1 /2019.

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

oz

 

 

 

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

 

 

nil oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
38 notice(s)
 3800 OZ
(0.1181TONNES)
No of oz to be served (notices)
150 contracts
(15000 oz)
0.466 TONNES
Total monthly oz gold served (contracts) so far this month
88 notices
8800 OZ
.2737 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

We had 0 kilobar entries

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into everybody else:  zero oz

 

 

total gold deposits: nil  oz

 

 very little gold arrives from outside/ again zero amount arrived  today

we had 0 gold withdrawals from the customer account:

(maybe investors are taking our advice by not storing their gold at the comex.)

this will hurt our bankers as they need to replace leased gold as all gold stored at the gold comex is unallocated.

 

Gold withdrawals;

i) zero withdrawals.

total gold withdrawals; nil

 

 

we had 2 adjustments… and they are indicative of a delivery
i) Out of JPMorgan:  40,620.560 oz was adjusted out of the dealer account and this landed into the customer account of jPMorgan
ii) Out of Scotia:  10,937.225 oz was adjusted out of the dealer account of Scotia and this landed into the customer account of Scotia

FOR THE MAY 2019 CONTRACT MONTH)

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 38 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 21 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

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To calculate the INITIAL total number of gold ounces standing for the MAY /2019. contract month, we take the total number of notices filed so far for the month (88) x 100 oz , to which we add the difference between the open interest for the front month of MAY. (188 contract) minus the number of notices served upon today (38 x 100 oz per contract) equals 23,800 OZ OR 0.7402 TONNES) the number of ounces standing in this NON active month of MAY

Thus the INITIAL standings for gold for the MAY/2019 contract month:

No of notices served (88 x 100 oz)  + (224)OI for the front month minus the number of notices served upon today (38 x 100 oz )which equals 23,800 oz standing OR 0.7402 TONNES in this NON active delivery month of MAY.

We gained 14 contracts or an additional 1400 oz will stand for delivery as they refused to morph into a London based forwards.

 

 

 

 

 

SURPRISINGLY LITTLE GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 7.254 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 0.7402 TONNES OF GOLD STANDING// THEY SEEM TO BE USING CONSIDERABLE GOLD VAPOUR TO SETTLE UPON UNSUSPECTING LONGS.

 

 

 

 

 

total registered or dealer gold:  233,228,928 oz or  7.254 tonnes
total registered and eligible (customer) gold;   7,782,015.791 oz 242.05 tonnes

 

 

FOR COMPARISON FIRST DAY NOTICE FOR APRIL 2018 AND FINAL STANDING APRIL 30 2018

 

 

AT FIRST DAY NOTICE MAY 1 2018: WE HAD 1.284 TONNES OF GOLD STAND.  BY MONTH’S END:  2.27 TONNES AS WE HAD ONE QUEUE JUMPING IN THE MIDDLE OF THE MONTH.

IN THE LAST 31 MONTHS 113 NET TONNES HAS LEFT THE COMEX.

 

THE GOLD COMEX IS NOW IN STRESS AS
1. GOLD IS LEAVING THE COMEX
2. GOLD IS LEAVING THE REGISTERED CATEGORY OF THE COMEX.

end

And now for silver

AND NOW THE  DELIVERY MONTH OF APRIL

INITIAL  standings/SILVER

MAY 1 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
39,748.811 oz
cnt
Delaware

 

 

 

 

 

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
422,213.900 oz
CNT
No of oz served today (contracts)
1294
CONTRACT(S)
(6,470,000 OZ)
No of oz to be served (notices)
949 contracts
4,745,000 oz)
Total monthly oz silver served (contracts) 2153 contracts

10,765,000 oz)

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

**

 

we had 0 inventory movement at the dealer side of things

 

total dealer deposits: nil  oz

total dealer withdrawals: nil oz

we had  1 deposits into the customer account

into JPMorgan:  nil

 

 

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

JPMorgan now has 149.469 million oz of  total silver inventory or 48.80% of all official comex silver. (149 million/305 million)

 

into CNT::  422,213.900 oz

 

 

 

 

 

 

 

 

 

total customer deposits today:  422,213.900 oz

 

we had 2 withdrawals out of the customer account:

 

i) Out of  CNT:  27,941.400 oz

ii) Out of Delaware:  11,807.34 oz

 

total withdrawals: 39,748.811. oz

 

we had 1 adjustment and it was a dilly:

out of CNT:  2,242,088.905 oz was adjusted out of the customer account and this landed into the dealer account and this silver will go somewhere.

 

i) Out of CNT

496,193.120 oz was adjusted out of the customer account and this landed into the dealer account of CNT..

 

total dealer silver:  94.286 million

total dealer + customer silver:  307.132 million oz

 

The total number of notices filed today for the MAY 2019. contract month is represented by 1294 contract(s) FOR  6,470,000  oz

To calculate the number of silver ounces that will stand for delivery in MAY, we take the total number of notices filed for the month so far at 2153x 5,000 oz = 10,765,000 oz to which we add the difference between the open interest for the front month of MAY. (2244) and the number of notices served upon today (1294 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY/2019 contract month: 2153(notices served so far)x 5000 oz + OI for front month of MAY( 2243) -number of notices served upon today (1294)x 5000 oz equals 15,510,000 oz of silver standing for the MAY contract month.

We lost 260 contracts or an additional 1,300,000 oz will not stand as these guys morphed into London based forwards as well as accepting a fiat bonus for their efforts.

 

 

 

FOR COMPARISON VS LAST YEAR:

 

 

 

 

ON FIRST DAY NOTICE APRIL 30/2018 (FOR THE MAY 2018 CONTRACT MONTH) WE HAD 24.11 MILLION OZ STAND FOR DELIVERY.  BY MONTH END WE HAD HUGE QUEUE JUMPING AND THUS 36.285 MILLION OZ EVENTUALLY STOOD FOR DELIVERY.

 

 

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TODAY’S ESTIMATED SILVER VOLUME:  72,183 CONTRACTS (

 

 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 66,587 CONTRACTS..

 

..

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 65,587 CONTRACTS EQUATES to 332 million  OZ 47.5% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

 

end

 

 

 

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NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -4.19% (MAY 1/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -2.19% to NAV (MAY 1/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -4.19%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.74 TRADING 12.16/DISCOUNT 4.57

END

And now the Gold inventory at the GLD/

MAY 1/WITH GOLD DOWN $1.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES

APRIL 30/WITH GOLD UP $4.30 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES//

APRIL 29/WITH GOLD DOWN $7.00: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 746.69 TONNES

APRIL 26/WITH GOLD UP $9.2//ANOTHER BIG CHANGE IN GOLD INVENTORY AT THE GLD; A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD.//INVENTORY LOWERS TO 746.69 TONNES TONNES

APRIL 25//WITH GOLD UP $.05 TODAY  (BASICALLY FLAT) NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 747.87 TONNES

 

APRIL 24 WITH GOLD UP  $6.00 TODAY// TWO TRANSACTIONS: 1)A HUGE WITHDRAWAL OF 2.05 TONNES FROM THE GLD AND THEN II) ANOTHER WITHDRAWAL OF 1.76 TONNES//INVENTORY RESTS AT 747.87 TONNES

APRIL 23./WITH GOLD DOWN $4.45 TODAY: NO CHANGES AT THE GLD/INVENTORY RESTS AT 751.68 TONNES//

APRIL 22/WITH GOLD UP $1.75//A SMALL WITHDRAWAL OF .59 TONNES OF GOLD FROM THE GLD INVENTORY//INVENTORY RESTS AT 751.68 TONNES

APRIL 18/WITH GOLD DOWN $.45 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT752.27 TONNES

APRIL 17/WITH GOLD DOWN $0.10 TODAY: ANOTHER HUGE WITHDRAWAL OF 1.76 TONNES AT THE GLD WHICH WAS USED IN YESTERDAY’S RAID/INVENTORY RESTS AT 752.27 TONNES

APRIL 16/WITH GOLD DOWN $13.60 TODAY: A HUGE WITHDRAWAL OF 3.82 TONNES AT THE GLD/INVENTORY RESTS AT 754.03

APRIL 15/WITH GOLD DOWN $3.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.85 TONNES

APRIL 12/WITH GOLD UP $2.10 TODAY:NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757..85 TONNES

APRIL 11/WITH GOLD DOWN $19.85 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.85 TONNES

APRIL 10/WITH GOLD UP $5.45 AGAIN TODAY, THE CROOKS AGAIN RAIDED THE COOKE JAR BY 2.64 TONNES/INVENTORY RESTS AT 757.85 TONNES

APRIL 9/WITH GOLD UP AGAIN BY $6.40/THE CROOKS RAIDED THE COOKIE JAR AGAIN BY 1.18 TONNES/INVENTORY RESTS AT 760.49 TONNES

APRIL 8/WITH GOLD UP AGAIN BY $6.40: THE CROOKS RAIDED THE COOKIE JAR AGAIN BY .88 TONNES//INVENTORY RESTS TONIGHT AT 761.67 TONNES.

APRIL 5/WITH GOLD UP$1.35: ANOTHER WITHDRAWAL OF 1.74 TONNES OF PHYSICAL GOLD FROM THE GLD INVENTORY: INVENTORY RESTS AT 762.55 TONNES

APRIL 4/WITH GOLD DOWN 90 CENTS TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.29 TONNES

APRIL 3:WITH GOLD DOWN 20 CENTS: ANOTHER WHOPPER OF A WITHDRAWAL: 3.81 TONNES FROM THE GLD//INVENTORY RESTS AT  764.29 TONNES

APRIL 2//WOW! WE LOST A WHOPPING 16.16 TONNES OF GOLD WITH A RISE IN PRICE OF $1.80//INVENTORY RESTS AT 768.10

APRIL 1/WITH GOLD DOWN $3.80: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 784.26 TONNES

MARCH 29/WITH GOLD UP $2.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 784.26 TONNES

MARCH 28/WITH GOLD DOWN $20.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 784.26 TONNES

 

MARCH 27/SURPRISING! WITH GOLD DOWN AGAIN BY $4.05, THE CROOKS NEEDED TO PUT GOLD BACK INTO THE GLD: THEY ADDED 3.23 TONNES OF GOLD INTO THE GLD//INVENTORY RESTS AT 784.26 TONNES

MARCH 26/WITH GOLD DOWN $7.30 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 781.03 TONNES

MARCH 25/WITH GOLD UP $9.85: A STRONG 2.94 TONNES DEPOSIT INTO THE GLD/INVENTORY RESTS AT 781.03 TONNES

MARCH 22/WITH GOLD UP $5.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 778.09 TONNES

MARCH 21/WITH GOLD UP $7.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 778.09 TONNES

March 20/WITH GOLD DOWN $5.15 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 778.09 TONNES

 

 

 

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MAY 1/2019/ Inventory rests tonight at 746.69 tonnes

*IN LAST 590 TRADING DAYS: 18.28 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 490 TRADING DAYS: A NET 21.44 TONNES HAVE NOW BEEN LOST INTO THE GLD INVENTORY.

WE MUST BE GETTING CLOSER TO THE BOTTOM OF THE BARREL FOR PHYSICAL GOLD AT THE GLD.

 

end

 

Now the SLV Inventory/

MAY 1/WITH SILVER DOWN 23 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ////

APRIL 30/WITH SILVER UP 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ/

APRIL 29/ WITH SILVER DOWN 13 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ.

APRIL 26//WITH SILVER UP 12 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ//

APRIL 25/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 24/WITH SILVER UP 15 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ//

APRIL 23./WITH SILVER DOWN 21 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 22/WITH SILVER UP 4 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 18/WITH SILVER FLAT TODAY: A SHOCKING 2.8122 MILLION PAPER OZ WERE ADDED INTO SLV INVENTORY: INVENTORY RESTS AT 311.979 MILLION OZ/

APRIL 17/WITH SILVER UP ONE CENT TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 16/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ//

APRIL 15: WITH SILVER DOWN ONE CENT TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 750,000 OZ//INVENTORY RESTS AT 309.167 MILLION OZ.

APRIL 12 WITH SILVER UP 11 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.917 MILLION OZ.

APRIL 11/WITH SILVER DOWN 37 CENTS TODAY: A DEPOSIT OF 750,000 OZ INTO THE SLV/INVENTORY RESTS AT 309.917 MILLION OZ//

April 10/WITH SILVER UP 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ.

APRIL 9/WITH SILVER DOWN ONE CENT: NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 8/WITH SILVER UP 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 5/WITH SILVER DOWN 2 CENTS: NO CHANGES IN SILVER INVENTORY:  THE CROOKS CANNOT RAID ANY SILVER BECAUSE THERE IS NONE: INVENTORY RETS AT 309.167 MILLION OZ//

APRIL 4/WITH SILVER FLAT TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ/

APRIL 3/WITH SILVER UP TWO CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ/

APRIL 2/ WITH SILVER DOWN ONE CENT TODAY: A SMALL WITHDRAWAL OF 134,000 OZ FROM THE SLV TO PAY FOR FEES/INVENTORY RESTS AT 309.167

APRIL 1/WITH SILVER DOWN ONE CENT TODAY: A SMALL WITHDRAWAL OF 656,000 OZ FROM THE SLV/INVENTORY RESTS AT 309.301 MILLION OZ//

MARCH 29/WITH SILVER UP 12 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.957 MILLION OZ/

MARCH 28/WITH SILVER DOWN 31 CENTS TODAY: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 469,000 OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 309.957 MILLION OZ/

MARCH 27/WITH SILVER DOWN 12 CENTS; NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.488 MILLION OZ//

MARCH 26/WITH SILVER DOWN 13 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.488 MILLION OZ//

MARCH 25/WITH SILVER UP 15 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.488 MILLION OZ////

MARCH 22/WITH SILVER DOWN 7 CENTS TODAY: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.356 MILLION OZ///INVENTORY RESTS AT 309.488 MILLION OZ///

MARCH 21/WITH SILVER UP 15 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 310.848 MILLION OZ/

March 20/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES  IN SILVER INVENTORY//INVENTORY RESTS AT 310.848 MILLION OZ//

 

MAY 1/2019:

 

Inventory 311.979 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

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

YOUR DATA…..

6 Month MM GOFO 2.17/ and libor 6 month duration 2.62

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

G0LD LENDING RATE: + .45/

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.46%

LIBOR FOR 12 MONTH DURATION: 2.71

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.25

end

 

PHYSICAL GOLD/SILVER STORIES

 

end
i) GOLDCORE BLOG/Mark O’Byrne

Italy Is Latest Country Seeking To Bring Their People’s Gold Home

Gold Is A “Reserve Of Safety” – Mario Draghi

by Virginia Filder for Gold Telegraph

European Central Bank’s President Mario Draghi recently announced that the ECB would be required to approve any management of gold reserves within the euro zone countries.

The statement was specifically directed at two Italian members. Why was Italy singled out?

According to the Wall Street Journal, Italian citizens are preparing to take control of Italy’s gold reserves. During the past few years, a multitude of small investors lost billions of dollars due to the failure of several Italian banks. The Bank of Italy is seen as an elitist, inefficient entity indifferent to the needs of ordinary people. Deputy Prime Minister Luigi Di Maio is leading the attack against Italy’s central bank, along with the “5 Star Movement” and the nationalist “League,” all of whom blame the countries financial woes on the incompetence of the central bank.

The 5 Star Movement is asking Italy’s Parliament to approve measures that would allow private banks to sell their share in The Bank of Italy at 1930’s prices. Taking it a step further, they are also demanding that ownership of the Bank of Italy’s 2,451.8 tons of gold be taken over by the country’s citizens and spent on populist policies. The current value of these gold reserves is $102 billion.

If these laws are passed, investors would be able to sell gold and greatly deplete the central bank’s reserves. As Giorgia Meloni of the Brothers of Italy states, “The gold belongs to the Italians, not the bankers.”

Italy’s lawmakers hold a different view and are warning against any action that will upend the sovereignty of the central bank’s policies. Such expropriation of government gold would not be tolerated.

But the 5 Star Movement and the League are determined to return ownership of the country’s gold to the public. Approximately 60 percent of lawmakers support the movement, guarantying the law will be enacted. There is also rumbling about nationalizing the Central Bank of Italy entirely.

In the realm of global commerce, gold has become a most potent weapon.

Italy is not the only country embracing gold. Romania has plans to repatriate gold reserves currently being held by the Bank of England. Romania currently has around 103.7 tons of gold, valued at $3.84 billion. Sixty-five percent of the yellow metal is being kept in storage at the Bank of England. According to a new law, only 5 percent of the country’s gold may be stored abroad. The rest will be repatriated. While the current leadership approves of the repatriation, the National Bank of Romania does not. Mugur Isarescu, director of the central bank, insists that the gold is for economic emergencies and should remain where it is.

Another European country, Germany, has quietly called back 674 tons of gold from France and the U.S. Federal Reserve to its central bank, the Bundesbank. Ninety-eight percent of Germany’s gold was stored abroad during the height of the Cold War to keep it out of the reach of Russia. With the weakening of the Euro, Germany wants the gold closer to home. The Bundesbank now has half of the country’s gold in safe storage.

Following the trend to keep gold close to home, the National Bank of Hungary will be recalling 100,000 ounces of gold from the Bank of England. Hungary has traditionally kept its gold reserves low, with only 50 tons being held in 1989. The global 2008 financial crisis had Hungary rethinking its approach to gold. Now, it wants its gold reserves home for safekeeping in the event of a geopolitical crisis.

Gold is seen by central banks as a way to maintain financial trust during economic upheaval. The move by global central banks to repatriate their gold may be a sign that an economic crisis could be looming in the near future.

Must Read Guide: 7 Real Risks to Your Gold Ownership

News & Commentary

Trump calls on Fed to cut rates by 1% and urges more quantitative easing (CNBC)

Gold finishes higher, but logs a third straight monthly loss (Marketwatch)

Gold firms on as dollar weakens with Fed policy meet in focus (Reuters)

Societe Generale resigns as London gold and silver market maker – (Reuters)

Theresa May Faces Triple Brexit Questions as She Runs Out of Moves (Bloomberg)

Pressure Building For Gold To Break Above $1,300 – Reik ( King World News )

World’s Monetary Reserves and the End of an Era ( Plata.com)

US Stock Market: Wave Counts Of Danger (321gold.com)

President Trump Just Called The Fed Out (Again) To Slash Interest Rates And Print More Money (Silver Doctors)

Young workers feel anxious about the future – Rightly so (David McWilliams)

Recent Market Updates

– Newstalk Interview: Investors Looking To Store Gold In Dublin Rather Than London

– Australia and Many Property Markets To Crash Like Ireland?

– Death of Inflation and the Death of Equities?

– SWOT Analysis: Venezuela Sells $400 Million Worth Of Gold Bullion

– World’s Central Banks Want More Gold – India May Buy 1.5M Ounces In 2019

– Russia’s 2019 Gold Rush Continues: Buys 600,000 Ounces of Gold In March

– When Should You Sell Your Gold and Silver? (GoldCore Video)

– Understanding Gold: A Step By Step Guide To Gold As An Asset Class

– World Trade Suffers Biggest Collapse Since Financial Crisis

Mark O’Byrne
Executive Director

GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.

Hugo is again pounding the table that the USA is losing its hegemony as the world’s reserve currency

(Hugo Salinas Price)



iii) Other Physical stories

LBMA etc.

 

 

 

 

 

Good Afternoon Bill/Harvey, (from Johannesburg)
A few minutes ago the LBMA updated the total gold in storage in loco London as at 31st January 2019.Ever since these disclosures (90 days in arrears) commenced in 2016,the figures have been metronomically consistent.The most recent figure was a total of 7,557 tonnes of which 5,048 tonnes  related to the BOE and GLD (allegedly) held 823 tonnes on 31st January 2019, so the residual LBMA hoardings were a microscopic 1,686 tonnes. These figures never ever change outside maximum parameters of 1% either way (indeed a 1% movement would represent a veritable tsunami of motion). Why am I just about the only regular observer of this monthly release of data,which serially proves that the promulgated figures of LBMA daily physical trading is nothing more than the churning of paper contracts in a zero sum farce. Since Harvey started monitoring the EFP fraud in January 2018, the total as of last night was 9,138 tonnes of EFP obligations accumulated in the last 16 months-that is why I refer to the LBMA residual vault gold as ‘microscopic’. Apparently, despite all GATA”s work, there are some demented individuals who still believe in the concept of allocated gold safely held by LBMA custodians,just awaiting instructions for onward delivery
Clearly the only material amount of physical gold in play is globalized mine supply, and we should all know by now that Chinese and Russian supply is never ever exported. Russia Today (RTV) covered the huge one belt one road conference in Beijing last week but there was not even a mention of this massive ‘coming together’ on those other non African channels available to me (CNN, BBC and Sky News). The resurrection of the old Silk Road trading empire is gathering an immense crescendo. Eventually (and probably quite soon) this resurrected trading bloc will cover about 75% of the world’s population.Even many of the established western European nations are now looking East.All this gargantuan volume of trade is not going to be settled by reference to the USD ponzi scheme, If you don’t already have a reasonable idea as to what is coming in the near future in respect of a  non fiat alternative to the current MMT solution, then go back to sleep.
Regards

-END-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A federal judge tells traders that they can combine cases (with the other 6 banks) as they accused JPMorgan of rigging the precious metals market
(courtesy CNBC)

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.

71671201

Spencer Platt | Getty Images

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

March 4.2019

Parker City News

JP Morgan faces potential class action lawsuit after guilty pleas by a former metals trader

Traders from across the U.S. are banding together to accuse J. P. Morgan Chase of manipulating precious metals markets for years.

At least six lawsuits, all making similar allegations against the nation‘s largest bank, have been filed in New York federal court in the past month, since federal prosecutors in Connecticut with a former J. P. Morgan Chase metals trader.

The cases could potentially include thousands of people who traded in the precious metals market. The White Plains, N.Y., law firm Lowey Dannenberg is asking the court to combine the cases and name it as the lead.

The law firm‘s commodities group is led by Vincent Briganti, the attorney who filed the first lawsuit on behalf of Dominick Cognata, a New York resident who alleges he suffered losses due to J. P. Morgan‘s trading conduct in the silver and gold futures and options markets.

A combined case, seeking class action status, would include anyone who purchased or sold futures contracts or an option on NYMEX platinum or palladium or COMEX silver or gold between at least Jan. 1, 2009, and Dec. 31, 2015. The lawyers believe that “at least hundreds, if not thousands” of traders would be eligible to join the case.

Named as defendants in all of the lawsuits are John Edmonds, a 36-year old former metals trader at J. P. Morgan, a group of yet-to-be-identified precious metals traders and the bank.

Edmonds, a New York resident, pleaded guilty in October to one count of conspiracy to defraud the market and manipulate prices of precious metals futures contracts and one count of commodities fraud. In the criminal plea, Edmonds admitted that he and other “unnamed co- conspirators” at J. P. Morgan, fraudulently manipulated precious metals markets from 2009 to 2015, the same time frame covered in the class action suits.

Briganti filed the initial class action on Nov. 7, just one day after the Justice Department unsealed Edmonds‘ plea in the U.S. District Court of Connecticut.

Edmonds admitted in his guilty plea that he deployed the illegal trading scheme hundreds of times with the direct knowledge and consent of his immediate supervisors. Plaintiffs say they have suffered economic injury, including monetary losses, as a direct result of actions by Edmonds and the other unnamed J. P. Morgan metals traders in the futures and options contracts.

One of the suits alleges that “the number of unlawful trades that JP Morgan traders executed in precious metals futures markets is at least in the thousands.”

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

The Justice Department‘s criminal investigation is still ongoing and recently caused a separate related civil case to be put on hold for at least six months while the government continues its investigation. That civil lawsuit, which also accuses J. P. Morgan of rigging the precious metals market, was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders.

After reviewing the details of the plea agreement, David Kovel, the attorney for Shak‘s suit, sought to re- interview Edmonds, along with two other current and former senior traders at the bank. However, the government argued that reopening questioning would be detrimental to the ongoing criminal investigation. The federal judge overseeing the proceedings ordered a six-month stay in the civil case.

Kovel declined to comment.

Edmonds was originally scheduled to be sentenced in Hartford, Conn., on Wednesday, Dec. 19, but a court filing on Nov. 27 shows the sentencing has been postponed until June. A spokesman for the U.S. Attorney for Connecticut could not elaborate on why the sentencing was postponed since the court filing is under seal.

-END-

Justice Department stalls another class action in gold market rigging, this one against JPM

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

Proceedings in the federal class-action anti-trust lawsuit against JPMorganChase charging the investment bank with manipulating the gold and silver futures markets —

http://www.gata.org/node/18844

— have been suspended for three months at the request of the U.S. Justice Department, just as the department has arranged suspension of proceedings in the class-action anti-trust lawsuit against Deutsche Bank charging similar market manipulation.

… 

In both cases the Justice Department has told U.S. District Court for the Southern District of New York that proceedings would jeopardize its criminal investigation into market rigging, which has been admitted by a former JPMorganChase trader, John Edmonds, who awaits sentencing.

According to court filings, the White Plains, New York, law firm representing the plaintiffs against JPMorganChase, Lowey Dannenberg, concurred in the government’s request to suspend proceedings. The stay is to continue for three months and may be extended.

The Justice Department’s motion, granted by the court on February 26 —

http://www.gata.org/files/JPMorganChaseClassActionStay.pdf

— said “the government is not seeking an open-ended stay that could indefinitely postpone this matter and thus jeopardize the parties’ interests in a timely resolution.” The motion added, “Any developments in the criminal case during the period the consolidated action is stayed may reduce or completely resolve the need to litigate certain issues in the consolidated action.”

Much of the Justice Department’s motion is redacted to conceal from the public evidence still under investigation. Edmonds has said he and other traders manipulated the gold and silver markets for years with the knowledge of their supervisors at JPMorganChase. In its motion to conceal that evidence, also granted by the court on February 26, the Justice Department said disclosure “could lead to destruction of evidence, flight from prosecution, and otherwise interfere with the government’s ability to conduct its investigation”:

http://www.gata.org/files/JPMorganChaseClassActionStaySeal.pdf

Monetary metals investors may be skeptical of the Justice Department’s stalling the Deutsche Bank and JPMorganChase cases, since the department and the U.S. Commodity Futures Trading Commission do not seem ever to have responded conscientiously to complaints of gold and silver market rigging until the class actions commenced.

How much time will the court give the Justice Department to delay getting to the bottom of the issue? The court might hasten matters if enough monetary metals mining companies protested the harm done to them and their shareholders by market rigging, but of course most monetary metals mining companies don’t mind at all.

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

* * *

 

end

* * *

Your early WEDNESDAY 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: 6.7343/

//OFFSHORE YUAN:  6.7279   /shanghai bourse CLOSED

HANG SANG CLOSED

 

2. Nikkei closed

 

 

 

3. Europe stocks OPENED GREEN

 

USA dollar index FALLS TO 97.37/Euro RISES TO 1.1237

3b Japan 10 year bond yield: FALLS TO. –.04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.30/ 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:: 63.57 and Brent: 72.06

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

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

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

3h Oil 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 +01%/Italian 10 yr bond yield DOWN to 2.56% /SPAIN 10 YR BOND YIELD DOWN TO 1.00%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.55: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 3.37

3k Gold at $1281.80 silver at: 14.88   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 2/100 in roubles/dollar) 64.64

3m oil into the 63 dollar handle for WTI and 72 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 111.30 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 1.0159 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1415 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 NEGATIVE territory with the 10 year FALLING to +0.01%

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 2.50% early this morning. Thirty year rate at 2.93%

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

6.  TURKISH LIRA:  UP  TO 5.9635.. VERY DEADLY

Futures Jump On Apple Surge; Fed Looms In Holiday-Muted Session

The tremors unleashed by Google’s earnings debacle and China’s disappointing PMIs just over 24 hours ago are now long forgotten as trader focus shifts to Apple’s strong guidance (if not 17% drop in iPhone sales and 22% plunge in China revenues), helping push the global rally into a fifth month and US equity futures to a fresh record high, even as potential disappointment looms should the FOMC come out more hawkish than expected. At least there will be fewer traders to be disappointed: most of Asia and Europe was shut for the May day holiday. Meanwhile, not all is well as treasury yields slumped below 2.50% again, while the dollar dipped ahead of the Federal Reserve’s policy decision.

The MSCI world equity index was up 0.1% in early trading after rising to its highest since early October, although May Day holidays across Asia and Europe meant trading was thinner than usual with China, Hong Kong, India, Japan, Singapore, South Korea and Taiwan all shut, and only the UK and Denmark open in Europe.

In a sign of the growing appetite for riskier assets, Australian shares ended just shy of an 11-year peak and London’s blue chip FTSE 100 was up 0.2 percent after solid earnings from supermarket chain Sainsbury’s.

Apple’s strong guidance which came against a disappointing background of the second consecutive revenue decline…

… helped rally US index futures and Apple’s global suppliers and pointed to a rebound for American technology shares, which had slumped in the wake of Google’s revenue miss. Stocks in the U.K. turned lower after data showed manufacturing growth slowed in April, though the pound held gains. Australian equities climbed, while the New Zealand dollar fell after unexpectedly weak labor data.  In the UK, Pearson fell after US textbook peers McGraw-Hill Education and Cengage Learning were said to plan a merger. The pound rose to fresh gained to fresh 2 week highs against the dollar.

For those traders who did make it to work today, there is plenty to keep them busy: Beijing and Washington began their latest talks aimed at ending a bitter trade war and Fed chairman Jerome Powell was due to speak later following the central bank’s two-day policy meeting.

Indeed, all eyes turn to the Marriner Eccles building at 2pm today, and Powell’s subsequent press conference following the U.S. rate decision. “The risk for this Fed meeting is that, unless the FOMC meets the market’s dovish expectation for their stance, we would expect another leg higher in USD,” Mizuho strategists said in a note. As we previewed last night, the Fed expected to leave US rates unchanged amid a “goldilocks” economy, although there is a modest chance of an IOER cut. That said, the market remains convinced a rate cut is coming by December 2019.

A call from U.S. President Donald Trump for a cut in interest rates will likely be unheeded when the results of the Fed’s two-day meeting are released, but the unorthodox comments made on Twitter will increase focus on Powell at his press conference shortly after.

“We expect the Fed to reiterate their still patient stance, as they announced at the start of the year,” Stifel chief economist Lindsey Piegza told Bloomberg TV. “We also expect the Fed to re-characterize their expectation for growth at a somewhat tempered level, but still very positive.”

Corporate earnings and developments in the trade conflict between America and China are also on the radar, with U.S. Treasury Secretary Steven Mnuchin calling the latest round of meetings “productive.” Bullish investors are looking for fresh reasons to push the S&P 500 Index higher after it closed Tuesday at another record.

Additionally, with the whole “sell in May” mantra at their backs, trader caution is building ahead of the summer lull with investors questioning how much longer the rally across global equities can last with better economic data and a stabilization in earnings priced in. “Historically the more difficult half of the year starts today,” said Ian Williams, economics and strategy research analyst at Peel Hunt. “The next six months will present plenty of geo-political challenges.”

In FX, the U.S. dollar was down slightly, trading in a tight range after hitting a one-week low ahead of the Fed news. The Swiss franc and pound led gains among G-10 currencies as the dollar reversed an earlier advance ahead of the FOMC decision. Moves were muted as many markets in Europe and Asia were closed for holidays and traders were in a holding pattern before the Fed. The New Zealand dollar fell after weaker-than-forecast labor-market data caused investors to increase bets on an interest-rate cut as soon as next week.

Elsewhere, commodities were mixed with base metals prices rising on hopes of a breakthrough in the U.S.-China talks, while crude oil prices eased as data showed a rise in U.S. inventories. Brent crude oil futures were at $71.55 per barrel, down 0.8 percent, while U.S. West Texas Intermediate (WTI) crude futures were down 1.1 percent at $63.23 per barrel.

The Federal Reserve’s policy decision is due, along with manufacturing data from ISM and Markit. Scheduled earnings include Qualcomm, CVS Health and Estee Lauder.

Market Snapshot

  • S&P 500 futures up 0.4% to 2,959.25
  • STOXX Europe 600 up 0.09% to 391.70
  • MXAP up 0.2% to 162.60
  • MXAPJ up 0.3% to 539.76
  • Nikkei down 0.2% to 22,258.73
  • Topix down 0.2% to 1,617.93
  • Hang Seng Index down 0.7% to 29,699.11
  • Shanghai Composite up 0.5% to 3,078.34
  • Sensex down 0.09% to 39,031.55
  • Australia S&P/ASX 200 up 0.8% to 6,375.89
  • Kospi down 0.6% to 2,203.59
  • German 10Y yield rose 1.0 bps to 0.013%
  • Euro up 0.1% to $1.1227
  • Brent Futures down 0.8% to $71.48/bbl
  • Italian 10Y yield fell 2.9 bps to 2.184%
  • Spanish 10Y yield fell 1.2 bps to 1.001%
  • Brent Futures down 1.8% to $71.48/bbl
  • Gold spot down 0.2% to $1,281.13
  • U.S. Dollar Index down 0.04% to 97.44

Top Overnight Highlights

  • The latest round of U.S.-China talks wrapped up in Beijing, with U.S. Treasury Secretary Steven Mnuchin calling the meetings “productive” in a tweet. Negotiations will continue in Washington next week, Mnuchin said after Wednesday’s round concluded slightly later than scheduled
  • Fed policy makers may decide Wednesday that falling inflation reinforces a message of caution on interest-rate moves, rather than bowing to President Donald Trump’s demands for drastic action to boost the U.S. economy
  • U.S. Attorney General William Barr will face new scrutiny from lawmakers on Wednesday after a revelation surfaced that he misrepresented Special Counsel Robert Mueller’s findings about whether Trump obstructed justice
  • The U.K.’s main opposition Labour Party predicted Prime Minister Theresa May will have to accept a customs union with the European Union as the price for getting her Brexit deal ratified in Parliament
  • New Zealand hiring unexpectedly fell in the first quarter and wages rose at a slower pace, adding to signs that the jobs market isn’t generating significant inflation pressure

A quiet tone was observed in Asia-Pacific amid closures in nearly all the major regional bourses for Labour Day, although US equity futures were underpinned after-hours following Apple earnings in which the tech giant beat on top and bottom lines, authorized an additional USD 75bln share repurchase and raised its dividends by 5%. ASX 200 (+0.8%) was positive with the index led higher by tech on contagion from Nasdaq futures and with financials buoyed as ANZ shares rallied nearly 3% after its H1 results, while reports that the US dropped a key demand regarding cyber theft in an effort to accelerate a trade deal with China also added to the optimism although most of the region failed to capitalize with China, Hong Kong, India, Japan, Singapore, South Korea and Taiwan all shut.

Top Asian News

  • Mnuchin, Lighthizer Conclude ‘Productive Meetings’ With China
  • Japan’s New Emperor Naruhito Ascends World’s Oldest Monarchy
  • China Further Opens Financial Industry on Eve of Trade Talks
  • Qantas CEO Alan Joyce Commits to Three More Years at the Helm

Mass closures in Europe have extended the quiet tone seen across Asia, with only UK and Danish markets open today in the EU. The FTSE 100 (-0.1%) is relatively flat with sectors also showing no clear standouts. In terms of movers, Sainsbury’s (+4.7%) rose to the top of the index amidst optimistic revenue and profit numbers, alongside a net debt reduction which is ahead of target. To the downside, Persimmon (-1.8%) shares suffer after fire issues were found in houses developed by the company, the company is addressing the issue. State-side, Apple reported earnings aftermarket wherein the tech giant topped estimates on both top and bottom line, whilst Q3 guidance was also above analyst consensus, despite a sharp drop in Q2 iPhone sales. Apple shares spiked higher in excess of 5% post-earnings.

Top European News

  • Lloyds Gets Capital Relief From Bank of England Risk Change
  • Sainsbury Gets Boost as CEO Clings On After Asda Failure
  • U.K. Mortgage Approvals Decline, Consumers Rein In Borrowing
  • U.K. Manufacturing Growth Slows as Firms Reduce Stockpiling Pace

In FX, Cable extended gains through more chart resistance levels on the way to circa 1.3073, like the 30 DMA (1.3052), a Fib (1.3053) and daily tech formation (1.3065), eyeing 1.3090 next (55 DMA) before the 1.3100 handle. A broadly in line and less stockpile-inflated UK manufacturing PMI amidst mixed BoE mortgage and consumer data was largely shrugged off, but Sterling also eked more upside vs the Euro as the cross eased a bit further below 0.8600 to test bids just ahead of a 50% retracement (0.8583) following more reports about constructive cross party Brexit talks as discussions are put on hold due to Thursday’s local elections. More immediately, focus on the Fed before the BoE tomorrow – see the Ransquawk headline feed for detailed previews of the 2 events. Conversely, weaker than forecast NZ jobs data has raised the stakes in terms of RBNZ rate cut expectations for next week and Nzd/Usd retreated in response through 0.6650, as the Aud/Nzd cross rebounded firmly from around 1.0560 to just over 1.0600. However, the Kiwi has pared some losses since with the probability of an ease still close enough to 50% for reasonable doubt.

  • CHF – Another major outperformer or rather beneficiary of a deeper pull-back in the Dollar ahead of the FOMC, as the Franc edges towards 1.0150 and DXY slips to 97.359, very close to a 97.355 Fib and nearer the 30 DMA (97.216).
  • AUD/EUR – Also firmer vs the Greenback as Aud/Usd consolidates recovery gains around 0.7050 and the single currency builds a foothold above 1.1200. Eur/Usd has eclipsed Fib resistance at 1.1217 and is now approaching convergence at 1.1242 (another Fib and 30 DMA) before 1.1250 and 1.1275 (latter roughly coincides with the 50 DMA).
  • JPY/CAD – Both narrowly mixed vs the Usd, as the Yen attempts to breach the 30 DMA (111.40) and retest Tuesday’s peaks, while the Loonie continues its recovery from yesterday’s post-Canadian GDP lows within a 1.3400-1.3375 range in advance of the manufacturing PMI and more from BoC’s Poloz and Wilkins.

In commodities, the energy market had a stellar performance in April as the benchmarks climbed over 6% amidst intensifying tensions in Venezuela, tightening US sanctions on Iran and ongoing OPEC supply cuts. Ahead of the end of Iranian oil waivers later, oil Journalist Reza Zandi notes that Iranian officials are reportedly discussing three potential Iranian scenarios in OPEC:  1) Iran suspends its membership in OPEC until sanctions are removed, 2) Iran departs from OPEC and 3) Iran continues its membership. In today’s trade, oil prices have reversed a bulk of the April gains following a much wider-than-forecast build in API crude stockpiles (6.8mln vs. Exp. 1.5mln), marking the 4th stock build in April. PVM analysts also highlight the uptrend in US stockpiles which is described as a “deepening pocket of weakness” amid a host of a bullish catalysts. WTI and Brent futures have thus retreated back below/around USD 64/bbl and USD 72/bbl respectively ahead of today’s EIA data wherein the market is geared for a headline build of 1.485mln barrels.  Elsewhere, gold remains within a relatively tight range around 1280/oz ahead of the FOMC rate decision (preview available in the Research Suite) whilst copper mirrors the humdrum tone with most the region away on holiday. Finally, aluminium prices remain pressured following on from the weaker-than-forecast Chinese manufacturing data coupled with producers revising down their demand growth estimates for the year.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -7.3%
  • 8:15am: ADP Employment Change, est. 180,000, prior 129,000
  • 9:45am: Markit US Manufacturing PMI, est. 52.4, prior 52.4
  • 10am: ISM Manufacturing, est. 55, prior 55.3;
  • 10am: Construction Spending MoM, est. 0.0%, prior 1.0%
  • 2pm: FOMC Rate Decision (Upper Bound), est. 2.5%, prior 2.5%
  • Wards Total Vehicle Sales, est. 17m, prior 17.5m

DB’s Jim Reid concludes the overnight wrap

Welcome to May, a month which traditionally has been associated with the adage of ‘sell in May and go away’. However, with the S&P 500 having not seen a negative May performance since 2012 and the US expansion now only one more month away from matching the longest expansion ever at 120 months, it feels like it would take a brave person to do that now. The first day of a new month also means we have our latest performance review which you’ll find as a separate document to this and in your inboxes a short while ago. Needless to say April was another strong month for risk assets, and it means we’ve now seen the strongest start to a year through the first four months in the post-GFC era.

The end of the month saw the S&P 500 stick to the playbook after advancing a modest +0.10% yesterday despite some earnings headwinds and intensified concerns over trade. However, the NASDAQ did fall -0.81% as Alphabet tumbled -7.50% and the most since 2012 following that softer than expected earnings report late on Monday. That move erased more than $69 billion of Google’s market cap, which is equal to more than 3x the median S&P 500 company. On the other hand, Pfizer had reported earnings and revenue that beat expectations, propelling the stock up +2.58% and helping the DOW gain +0.15%. After markets had closed, Apple reported strong sales and profits as well, with iPhone sales notably healthy after recent concern over the product’s outlook. The company’s shares were nearly +5% higher overnight, helping NASDAQ futures advance +0.73% this morning. That’s all to report this morning with most of Asia not trading due to public holidays. Meanwhile, the STOXX 600 ended yesterday close to flat (+0.01%) with banks partially retracing their rally from Monday (-0.35%). Peripheral equities and bonds outperformed, led by Spain’s IBEX and Italy’s FTSE MIB, which gained +0.56% and +0.43%, respectively.

Not helping sentiment also was a WSJ article suggesting that the US favoured leaving punitive tariffs in place as a way of enforcing any trade deal. During the US session, Acting White House Chief of Staff Mulvaney said that talks “won’t go on forever” and if they can’t reach a deal soon then “you throw up your hands and say ‘this is never going anywhere.’” So things certainly seem to be approaching an inflection point, but to be fair we’ve heard similar rhetoric before. USTR Lighthizer and Secretary Mnuchin are in Beijing today negotiating, with the Chinese team set to return to the US next week to continue talks. In other US political news, congressional Democrats met with President Trump yesterday to discuss an infrastructure deal and agreed to meet again in three weeks to discuss funding options. That will be the key area of disagreement, since Senate Minority Leader Schumer has already called for a partial rollback of Trump’s signature tax reforms, while Majority Leader McConnell has already rejected that idea. The sides at least agreed that $2 trillion should be the target for the overall plan, which would certainly be a positive for the economy if realized.

While that should hover in the background, the good news is that we’ve got the welcome distraction of a Fed meeting to look forward to this evening. No policy change is expected and our US economists anticipate that the meeting statement and press conference will reflect the dichotomy of improving growth prospects and easy financial conditions on the one hand, and softening inflation pressures on the other. As such our colleagues believe patience in assessing any adjustments to the policy stance will remain the order of the day for the foreseeable future. However the wildcards are further announcements about balance sheet normalization and the potential for a cut to the IOER. The latter became a bit more likely after yesterday’s fed funds fixing rose to 2.45%, which takes it within 5bps below the top of the target range. That’s the level which has prompted the Fed to lower the IOER in the past. For what it’s worth, President Trump was vocal about the Fed again yesterday, criticizing them for “incessantly” lifting rates amid “wonderfully low inflation” and suggested that the US economy would soar “like a rocket” if they cut rates by a full point and did more QE. Anyway, you can see our economists’ full Fed preview here.

Coming back to yesterday, where the other story was the contrasting slew of data releases on both sides on the pond. It started in Europe with a better than expected Q1 GDP reading for the Euro Area at +0.4% qoq (vs. +0.3% expected). The unrounded reading was +0.38% qoq with the data getting a boost from country level readings for France, Spain and Belgium before. At the same time the March unemployment rate also ticked down to 7.7% which is in fact the lowest in the current cycle now, having peaked at 12.1% in 2013. For what it’s worth, the 2007 low was 7.3%. So the labour market is seemingly still extremely robust, which as our European economists noted reduces the chances of manufacturing sector weakness being transmitted to services through an income-induced hit to domestic demand. We should note that Italy also reported a +0.2% qoq GDP reading yesterday which officially means it has emerged from recession.

Also generating some airtime yesterday morning were the country level April inflation readings. There wasn’t any great surprises for the data in France, Spain, or Italy, however the big positive surprise came in Germany where the +1.0% mom print smashed expectations for just +0.5%. That left the annual rate at +2.1% yoy compared to +1.4% in March. There was talk of an unusually large increase in prices for packages around the Easter holidays as explaining the upside surprise, which may result in some payback next month. Nevertheless, Bunds got as high as 0.046% intraday before fading slightly to close +0.9bps higher on the session at 0.011%.

In any case, stronger growth and higher inflation is certainly food for thought for the ECB even if the data in Europe remains a bit noisy at the moment. Meanwhile, there was no shortage of data in the US yesterday either. It started with a +0.7% qoq reading for the employment cost index which matched expectations, while the breakdown didn’t reveal any great surprises, however the private wages and salaries component was a little firmer at +0.8%. Overall, another fairly benign inflation reading however. Even softer though was the April Chicago PMI which tumbled -6.1pts to 52.6 compared to expectations for 58.5. That is the weakest reading since January 2017 which perhaps paints some downside risk for the 55.0 consensus for today’s ISM print, though it’s interesting to note that the Chicago reading has moved in the opposite direction as the ISM in every month so far this year.

The other data out in the US yesterday included consumer confidence, which rose +5pts to 129.2, remaining near its cyclical high. Pending home sales rose +3.8% mom versus expectations for +1.5%, which is the second highest rate since 2010, only eclipsed by January’s print. Some further evidence of firming activity in the housing market, though on the other hand an index of US house prices rose only +3.0% yoy, which was its slowest pace since 2012. Since shelter prices make up 40% of core CPI, this will definitely be an area to watch moving forward.

The end result of all that was for 10y Treasuries to trade in a 4.9bps range but ultimately settle -2.4bps lower at 2.503%. Elsewhere, BTPs rallied -3.0bps. Though there wasn’t a clear driver, euro area inflation expectations also repriced notably higher. The 5y-5y forward inflation swap rate rose +7.2bps, its biggest move since 2015, though it remains somewhat depressed at 1.42%. The USD (-0.39%) faded with EM FX ending +0.18% higher. Speaking of EM, there was some focus on Venezuela yesterday after opposition leader Juan Guadio called for the military to join with him to overthrow the Maduro regime. He was reportedly seen with national guardsmen, but Madura said on Twitter that the military remains loyal to him. Brent crude oil spiked as high as +1.71% before ending the session +1.05% higher, however it has since given up most of that move this morning.

Looking at the day ahead, the obvious focus is on the aforementioned Fed meeting tonight however it’s also another busy day of data releases with March money and credit aggregates data due in the UK this morning along with the April manufacturing PMI, before we get the April ADP employment change reading in the US along with the April ISM and manufacturing PMI, March construction spending and April vehicle sales. Away from that we’re due to hear from the ECB’s Guindos while US Attorney General Barr is due to testify before the Senate on the 2016 election and specifically Russian interference. The earnings highlights today include Qualcomm, GlaxoSmithKline and Kraft Heinz.

end

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSE //Hang Sang CLOSED   /The Nikkei closed Australia’s all ordinaires CLOSED UP 52%

/Chinese yuan (ONSHORE) closed UP  at 6.7353 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 63.57 dollars per barrel for WTI and 72.06 for Brent. Stocks in Europe OPENED GREEN//  ONSHORE YUAN CLOSED DOWN // LAST AT 6.7353 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7279/ TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/SOUTH KOREA

NORTH KOREA
end

3 b JAPAN AFFAIRS

 

end

3 C CHINA/CHINESE AFFAIRS

i)China/USA

looks like the uSA has caved on the big issue of cyber theft as  Trump seeks a trade deal at any cost

(courtesy zerohedge)

White House Reportedly Caves On Cybertheft Demands As Trump Seeks Trade Deal At Any Cost

For weeks now, those who can see past the White House’s ‘cautious optimism’ regarding the potentiality of the ongoing trade talks with Beijing have probably understood that the year-long trade war with China could end one of two ways: Either Trump walks away from the deal, risking a brutal correction in stocks (which, according to some, is the only barometer of his performance in office that matters to Trump) or cave on several of the administration’s most unpalatable demands.

So far, the White House has already purportedly punted on enforcement (though nothing is set in stone) and backed away from demands that Beijing scrap industrial subsidies.

And according to a just-released report in the FT, Trump has instructed his negotiators, who are presently engaged in talks in Beijing, to drop a demand that China halt the instances of cybertheft that have become such a widely publicized point of contention between China and the West.

Trump

To what we imagine is the frustration of Robert Lighthizer, the lead trade negotiator, who has insisted that the US take advantage of its ‘leverage’ to exact the best possible deal or simply walk away and wait, one source told FT that Trump “wants a deal.” End of story.

Donald Trump has dropped a central demand from trade negotiations with China that it halt alleged instances of commercial cyber theft, in order to end a long-running tariff dispute. Mr Trump has softened his administration’s opening position on what it originally characterized as “Chinese government-conducted, sponsored, and tolerated cyber intrusions into US commercial networks,” according to several people briefed on the negotiations. The US is instead likely to accept a watered-down commitment from Beijing as an alternative.

“A lot of issues are being jettisoned from this negotiation because President Trump wants a deal,” one of the people said.  The absence of strong provisions against Chinese theft of US trade secrets will raise concerns that the Trump administration is prepared to settle for limited progress on crucial “structural” reforms in the trade agreement.

Beijing has denied accusations of state-sponsored cyber espionage, and claims that it has been fully compliant with a promise it made to President Barack Obama in 2015. When it comes to the trade deal, the Chinese are adamant that language condemning cyber espionage not be included, per the FT’s source.

“With regards to enforceable benchmarks [on cyber theft], there will be nothing that goes beyond Xi Jinping’s broken promise at the White House in September 2015. They are just going to ignore a core feature of the original [US trade complaint],” the person said.

And now that the White House has caved, it’s time for some revisionist history as one trade official said the US never expected Beijing to agree to its demands in the first place.

James Green, former head of the USTR’s Beijing office, said it was always unlikely that the trade talks would resolve the two sides’ bitter charges and countercharges over alleged commercial cyber theft. “I don’t think the administration seriously thought that trade talks or tariffs would curb those activities,” said Mr Green, who is now a senior adviser at McLarty Associates. “We could highlight the practice, but it would need to be law enforcement and national technical means that would actually do something,” he said.

Contrary to Mick Mulvaney’s insistence that Trump would only accept a great deal, the FT hinted that the US will be caving on other key demands as the White House scrambles to ensure that the next round of talks in Washington next week will be the last.

In the final stretch of talks, Mr Lighthizer and Mr Mnuchin are expected to try to eke out some eleventh-hour pledges from China in a number of areas, from biotech approvals, to cloud computing, to data protection for drug companies. They will also attempt to finalise the agreement on the enforcement mechanism to ensure compliance with the deal, and the fate of existing tariffs, with the US administration insisting to maintain some of its levies on $250bn of Chinese imports until Beijing meets certain implementation benchmarks.Although Mr Trump has frequently promised that a big trade deal with China was around the corner, US officials insisted that he might still walk away.

If this report is accurate, then the trade pact might end up resembling Lighthizer’s worst nightmare: An agreement to significantly lower punitive tariffs and drop most of the US’s big demands in favor of a promise by Beijing to buy billions of dollars in agricultural goods – something that Trump could at least take home to America’s suffering farmers.

end

China/

What a mess:  large Chinese drug maker discloses that thy have a huge $4.4 billion accounting fraud in their company. This is going to hurt a lot of Chinese investors.

(courtesy zerohedge)

Chinese Drugmaker Discloses $4.4 Billion Accounting Fraud

It looks like China’s unstoppable default tsunami is about to claim its latest corporate victim…and thanks to lax oversight that allowed the company to get away with what appears to be a staggering accounting fraud, thousands of unsuspecting investors might be left holding the bag.

According to Bloomberg, Kangmei Pharmaceutical Co., one of China’s largest listed drugmakers, revealed on Tuesday that it had overstated its cash holdings by $4.4 billion. Unsurprisingly, the revelation, which immediately exposed the company to be teetering on the brink of insolvency, sent its shares and bonds tumbling. Its shares, which are a constituent of MSCI’s global index, plunged by the 10% daily limit. Its 2.4 billion yuan ($356 million) notes due in 2022 dropped by as much as 60 yuan (about $9).

Yuan

It’s just the latest example of why investors must be wary of Chinese companies due to lax regulations, even as its equity and bond markets are becoming increasingly internationalized. The company’s revelation came four months after it revealed that Chinese authorities had launched an investigation into the company.

One of BBG’s sources said the restatement is ‘unprecedented’ in the history of Chinese security markets.

The immense size of Kangmei’s restatement, described by one securities lawyer as unprecedented for China, puts a spotlight on disclosure practices in a country where companies are defaulting at a record pace and several instances of questionable accounting have emerged in recent months. The issue has become increasingly important for global investors and securities firms as they gain unprecedented access to China’s gargantuan stock and bond markets.

“Investors have to be more careful about Chinese firms’ reporting,” said Andrew Lam, a director at BDO, an international accounting firm. “They will have to do real homework, examining closely companies’ financial reporting for any potential irregularities.”

The China Securities Regulatory Commission, which in recent years has been pushing the nation’s stock exchanges to delist companies that provide inaccurate disclosures, didn’t immediately reply to a faxed request for comment. The Shanghai Composite Index rose 0.5 percent at 1:36 p.m. local time.

Though the company could face de-listing over the fraud, it said it will try and raise more capital to meet an upcoming bond obligation due Sept. 3. All of this is happening after Beijing’s decision to start allowing companies to fail led to a record number of Chinese corporate defaults.

Kangmei, based in China’s southern Guangdong province, said it faces forced delisting if the CSRC classifies its behavior as a major legal violation, according to a company notice on risks related to its ongoing CSRC investigation. The drugmaker’s upcoming bond maturities include a 750 million yuan note due Sept. 3. Kangmei plans to sell as much as 20 billion yuan of bonds to replenish working capital and repay debt, the firm said in a filing on Tuesday.

Other companies that have faced similar scrutiny from regulators include Kangde Xin Composite Material Group Co., which defaulted on a bond in January after reporting cash levels just four months earlier that were enough to pay the debt 15 times over. The CSRC began investigating Kangde Xin in October.

But as one analyst points out, this isn’t the first time a Chinese company has displayed a high cash balance while selling bonds, then the cash just disappeared.

“We have seen a number of Chinese companies with high cash balances still seek funding from investors, and later on the cash just disappears,” said Raymond Chia, head of credit research for Asia excluding Japan at Schroder Investment Management Ltd. “We should really question borrowers.”

While investors will be watching the CSRC, one of China’s most powerful securities regulators, to see how it handles the case, whatever the result, one investor said the Kangmei will likely ‘struggle to win back the confidence of investors’ – which sounds to us like the understatement of the century.

Investors will watch the CSRC for more details on what went wrong at Kangmei, according to Guo Feng, head of the wealth management department at Northeast Securities Co. Whatever the result, the company may struggle to win back investor confidence, said Shen Chen, a partner at Shanghai Maoliang Investment Management.

“This scandal could narrow their refinancing channels as investors flee,” Shen said.

Though BBG reported that this was the largest cash discrepancy on record, a bankruptcy from earlier this year suggests that this might not be true.

Back in January, the bankruptcy of Jiangsu-based Kangde Xin Composite Material Group, took investors by surprise when it failed to pay a 1 billion yuan ($148 million) local note due Jan. 15 due to a liquidity crunch, according to the company. The shocking punchline? As research analyst Tim Yup pointed out,  as of end-September Kangde Xin reported that it had 15.4 billion yuan in cash and equivalents, more than double the total amount of its short-term debt, and more than 15 times the amount of debt that it just defaulted on.

Clearly, when it comes to the balance sheets of indebted Chinese companies, no cash balances can be taken as a certainty.

 

end
Washington warns Beijing that Chinese paramilitary “fishing boats” will not be treated like combatants.
(courtesy zerohedge)

Washington Warns Beijing: ‘Paramilitary’ Fishing Boats Will Now Be Treated Like Combatants

As the US continues its increasingly daring and extremely provocative “freedom of navigation” operations in the Strait of Taiwan and South China Sea, it’s also growing more vocal about challenging China’s increasingly expansionary military presence in the Pacific. Over the weekend, the US has warned Beijing that the US military would aggressively respond to provocative acts by China’s coast guard and fishing boats in the same way it reacts to the Chinese navy.

China

The threatening posture is aimed at curbing Beijing’s increasingly sharp-elbowed approach not just to the South China Sea, which it already effectively dominates, despite the rival claims of several of its neighbors (claims that have been validated by international courts), but in the Pacific more broadly, the FT reports.

Admiral John Richardson, head of the US Navy, said he told his Chinese counterpart, vice-admiral Shen Jinlong, in January that Washington would not treat Chinese fishing boats that work with the People’s Liberation Army-Navy any differently from actual Navy ships. This warning wasn’t unprovoked: On several occasions, Chinese fishing boats have blocked vessels belonging to the US, Vietnam and the Philippines. They have even rammed and harassed ships, blocked access to lagoons, and participated in the seizure of reefs and shoals.

“I made it very clear that the US navy will not be coerced and will continue to conduct routine and lawful operations around the world, in order to protect the rights, freedoms and lawful uses of sea and airspace guaranteed to all,” Adm Richardson told the Financial Times.

China’s informal marine militia has been expanding since 2015, when it established a headquarters on the Paracel Islands.

The maritime militia has been strengthened since 2015, when it created a headquarters in the China-administered Paracel Islands, a disputed area in the South China Sea that is also claimed by Vietnam and Taiwan. It has also received training alongside the Chinese navy and coast guard. In its last annual report on the Chinese military, the Pentagon said the fleet “plays a major role in coercive activities to achieve China’s political goals without fighting.”

China has increasingly used the maritime militia because fishing boats are less likely to prompt a military response from the US. But the latest warning significantly raises the stakes for China’s non-navy vessels engaging in aggressive acts.

Defense analysts have long warned about the need for a more effective strategy to counter Beijing’s expansionary aims in the Pacific, and Andrew Erickson, a maritime militia expert at the US Naval War College, recently called for the US to “deal with China’s sea forces holistically” by demanding that both military and paramilitary ships follow international rules. He added that the US must “accept some friction and force Beijing to choose” between de-escalating or inflaming tensions.

James Stavridis, a retired US admiral and former NATO commander, said Richardson made the right call.

“It is a warning shot across the bow of China, in effect saying we will not tolerate ‘grey zone’ or ‘hybrid’ operations at sea,” said Mr Stavridis. “A combatant is a combatant is the message, and the CNO (Chief of Naval Operations) is in the right place to warn China early and often.”

As is now customary whenever the US ratchets up the pressure on the Chinese Navy, don’t be surprised too see a retaliatory show of forcein the coming days and weeks.

end

4/EUROPEAN AFFAIRS

ASSANGE/UK

Assange is sentenced to 50 weeks  (the maximum) for skipping bail. He will not receive a fair trial in his extradition hearings

(courtesy zerohedge)

Assange Sentenced To 50 Weeks In UK Prison For Skipping Bail

Julian Assange has been sentenced to 50 weeks in a UK prison – close to the maximum sentence – for skipping bail in 2012 to seek refuge in the Ecuadorian embassy, setting off a seven-year showdown with UK law enforcement and the US that ended with his arrest earlier this month, WSJ reports.

Judge Deborah Taylor said during the sentencing that it would be difficult to find a more serious example of the offense.

Assange

Mark Simmons, who represented Assange on Wednesday, said the WikiLeaks founder skipped bail and sought refuge in the embassy because he was afraid of being renditioned to the US from Sweden.

After arriving at the Southwark Crown Court on Wednesday, Assange defiantly raised his fist to rally his supporters. A judge declared during an earlier hearing that Assange’s case could warrant the maximum sentence after he was found guilty shortly after his arrest.

On Twitter, Wikileaks blasted the sentence for being “as shocking as it is vindictive” and questioned whether Assange would receive a fair extradition hearing.

WikiLeaks

@wikileaks

Julian Assange’s sentence is as shocking as it is vindictive. We have grave concerns as to whether he will receive a fair extradition hearing in the UK.

Assange skipped bail in 2012 to avoid being extradited to Sweden over an investigation into allegations of sexual assault.

The Wikileaks founder is facing a separate court hearing on Thursday over a US extradition request. If he is extradited, he could face a maximum of 5.5 years over charges that he conspired to break into a government computer.

end
Chaos erupts in Paris on this May day holiday as protesters riot
(courtesy zerohedge)

Chaos Erupts In Paris As “Armageddon” Protesters Riot During French Holiday

Tens of thousands of protesters took to the streets of Paris and other French cities on Wednesday to mark International Workers’ Day (also known as Labor Day), only to clash with French riot police. The demonstrators included Yellow Vests, trade unionists, climate change protesters and Black Bloc (antifa) – which posted on social media that they wanted an “Armageddon” rally that would turn Paris into the “Riot Capital of Europe,” according to the Daily Mail.

More than 7,400 police, gendarmes and soldiers were on hand to quell the more violent protesters. Interior Minister Christophe Castaner said “‘There’s no question of dramatising anything, it is a question of being prepared,” adding that “1,000 to 2,000 extremists” were expected to join the protests.

Embedded video

François Launay@francoislaunay

Les Marianne Lilloises ont rejoint le cortège en silence

Marching alongside labor unions, pensioners, students and others, the protesters were hit with large amounts of tear gas, baton strikes and other crowd control measures.

Embedded video

AFP news agency

@AFP

VIDEO: 🇫🇷 Clashes have broken out in Paris between police and “black bloc” protesters who joined “yellow vest” demonstrators at the front of the march before the official start of the trade union demonstration on

Embedded video

Ian56@Ian56789

Thread:
Macron Regime Riot Police fire Tear Gas and Stun Grenades as they Baton Charge protesters at the start of the traditional May Day parade in .

Compact News 🌐@NewsCompact

🇫🇷 💥 : the Police actually want to split the with tear gas again during in the French capital

Embedded video

Compact News 🌐@NewsCompact

🇫🇷 💥 : As a result of the tensions in the French capital during manifestation, the front window of a police van was destroyed by crap

Embedded video

According to The Localover 200 people have been arrested around Paris’s Montparnasse neighborhood. Of those, 148 remain in police custody. Police have performed over 12,400 checks on protesters, according to the report.

Clashes with police began in Paris around 1pm, as numerous hooded and masked troublemakers were spotted.

nonouzi@Gerrrty

calls on the to “calm down” after police fire teargas on a small number of demonstrators including some

Embedded video

nonouzi@Gerrrty

Two injured protesters were quickly evacuated from the procession

Embedded video

24 people are talking about this

The founder and former leader of France’s right-wing Front National (FN) party, Mean-Marie Le Pen delivered a May 1 speech at the Place des Pyramides during a rally to honor Jeanne d’Arc.

“Let’s have the courage to be nationalists,” he told the crowd, predicting “serious social and political dramas” to come.

Meanwhile in the southern French city of Toulouse, over 1,000 protesters made their way through the streets of la ville en rose, however local media has yet to report any violence according to The Local.

Embedded video

FranceBleuLoireOcéan

@bleuloireocean

à : plusieurs milliers de manifestants, syndicats en tête de cortège, les derrière, suivis de et

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

tom Luongo discusses Iran and North Korea.  We all know full well that North Korea needs to build a nuclear war head and Iran is developing long range missile systems.  No doubt both will join in their technologies to produce a nuclear missile.  Both leaders are appealing to Trump himself to negotiate..something that he is not willing to do.

(courtesy TomLuongo)

Good Will’-Hunting By Iran & North Korea

Authored by Tom Luongo,

When all else fails with Donald Trump try flattery. That’s exactly what Iranian Foreign Minister Javad Zarif did on Sunday. Because for Iran and North Korea that is, honestly, all that is left.

First it was North Korea, saying talks could resume but only if President Trump’s staff were no longer around.

This weekend Iran took to the airwaves with an interview on Trump’s favorite network, Fox, likely the only thing he’s allowed to watch along with CNN. Good cop/bad cop as it were.

Zarif made his way around the Sunday talk show circuit to make his case to the U.S. establishment. These appeals were to Trump himself to come out from behind his staff and broker honestly with both countries.

“They have all shown an interest in dragging the United States into a conflict. I do not believe that President Trump wants to do that, I believe President Trump ran on a campaign promise of not bringing the United States into another war. But I believe President Trump’s intention to put pressure, the policy of maximum pressure on Iran in order to bring Iran to its knees so that we would succumb to pressure, is doomed to failure.”

IRANIAN FOREIGN MINISTER JAVAD ZARIF ON FOX NEWS SUNDAY

At the same time Iran and North Korea both understand that if Trump doesn’t do this they are moving on with their lives regardless of what the U.S. does next.

Russia is openly preparing for war if need be.

Since the beginning of the Trump administration there has been almost zero interaction between U.S. and Iranian foreign offices. The lack of diplomacy and professionalism of the Trump administration has been quite evident from the beginning.

Any attempt to engage in diplomacy was roundly rejected by Trump himself. Why do you think Rex Tillerson was fired? It wasn’t because he called Trump an “Idiot.” Though Rex was right about that.

He was fired because he actually engaged in diplomacy with both North Korea and in intervening to stop the Saudis from invading Qatar in 2017.

He was also a supporter of the JCPOA, knowing that that deal was as good as it would get until the U.S. stopped all regime change activities around the world. And that was the breaking point.

It was time for the neocons, specifically Sheldon Adelson, the Saudis and the UAE, to push for a new foreign policy. They had to stop Trump from making a deal of substance with North Korea because it would undermine the goal of destroying Iran.

Peace might have broken out in the Middle East and U.S. troops might have come home. The Horror. The Horror.

Remember North Korea and Iran are linked in the minds of the Israelis, Trump and the Neocons because of North Korea’s nuclear weapons program.

Donald J. Trump

@realDonaldTrump

Iran just test-fired a Ballistic Missile capable of reaching Israel.They are also working with North Korea.Not much of an agreement we have!

These are the most important 140 characters Donald Trump has written in the past two years. It underscores and puts paid why he is so dead set on pushing the situation with North Korea and Iran to its crisis point.

Readers of this blog know that myself and Halsey English have been saying for months that Iran and North Korea divided up their nuclear weapons ambitions between them. This way they could adhere to the letter of their international agreements while violating the spirit of them.

WHY TRUMP’S TWEET SIGNALS NUCLEAR END-GAME, 9/24/2017 Pompeo and Bolton were installed to rein in Trump and accelerate the antagonism of Iran on behalf of Israel. They were installed to scuttle Korean reunification and make unreasonable demands on every one of Israel’s enemies — Lebanon, Syria and Iran — to ensure non-compliance and justify sanctions.

This is why the JCPOA was the ‘worst deal ever.’ It didn’t preclude the outsourcing of the two halves of the nuclear weapon — the warhead developed by North Korea and the ballistic missile developed by Iran.

This is why Benjamin Netanyahu wants to cripple Iran’s ballistic missile program. And why he is so obsessed with ‘proving’ the Iranians are still making a warhead.

There is no solution to the intractable mess of this situation if the U.S. is dead set on unilateral ultimatums of the kind Bolton and Pompeo only seem capable of.

This is why it is so significant that first Kim Jong-un and now Javad Zarif are trying to cleave Trump away from his advisors handlers and appeal to him directly to de-escalate the situation.

Last week Kim sat down with Russian President Vladimir Putin and affirmed a close relationship while elevating Putin to that of equal partner in any future talks between the U.S. and North Korea.

Putin understands that North Korea would “rather eat dirt” than give up their nukes at this point. They know what happens to countries that negotiate with Americans like John Bolton.

Kim knows like Putin does that “Presidents change, policy doesn’t.” And the U.S. policy on subjugating its adversaries is not open for discussion.

So any agreement between Trump and Kim isn’t likely to last a decade. This is the consequence of Trump’s tearing up every treaty he can get his hands on he doesn’t like.

At some point, like it or not, you honor your agreements or accept that there are no deals possible.

Kim rightly refuses to be treated like an underling and now will only deal with other heads of state. Zarif knows that Trump watches Fox News and so does Fox’s executives who allowed this interview.

The fact that both Kim and Zarif have to go through these channels to get their message across is beyond embarrassing. And not for them.

They both come across here as statesmen while Pompeo continues to look like a buffoon, blundering his way around preparing the world for the Rapture he so clearly thinks is necessary.

Zarif understands that the moves made in the past couple of weeks by Trump through Bolton have the potential for outcomes Trump himself doesn’t want.

Trump wants to win the hand and get his Middle East deal of the century across the finish line. If Bolton has sold him on the notion that the only way to stop Iran and save Israel is to invade and destroy them then the die has been cast and we’d better get out the body counters.

As Scott Ritter points out in the American Conservative the move to nominate the IRGC as a ‘Foreign Terrorist Organization’ was a de facto declaration of war against Iran which makes thousands of U.S. troops vulnerable in Iraq and Syria where they fight side-by-side against ISIS.

It is well past time for Trump to decide who runs his administration and what his legacy is going to be. Zarif appealed to candidate Trump, a man no longer in existence, who sold his presidency to the neocons to stay in power back in 2017 when he doubled down in Afghanistan.

He’ll never have more political capital to break free of Bolton et.al. than he does now with RussiaGate over and the Democrats in disarray.

Too bad he’s such a coward he can’t see that.

*  *  *

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END
Jeffrey Snider argues that we have entered into Eurodollar crisis No 4 due to scarcity of dollars.  This obvious lack of collateral is playing havoc to  investments around the world.  Expect Powell to cave and cut rates
(courtesy Jeffrey Snider)

“The Collateral Call Creeps Closer” – Bonds And Economists Are At It Again

Authored by Jeffrey Snider via Alhambra Investment Partners,

Federal funds is up again. As of yesterday, the 29th, the effective rate (EFF) is now 5 bps above IOER. That takes it to within 5 bps below the top of the Federal Reserve’s policy range. According to FRBNY, the 1st percentile in yesterday’s session was 2.40%, meaning that almost the entire federal funds market is paying more than IOERWhere are the dealers?

If a scramble for liquidity shows up here, what is it like everywhere else where it does matter? The federal funds market is nothing more than leftover pocket change of the FHLB’s. But with these rates, there should be more than that going on. There is opportunity for any enterprising dealer to take advantage of risk-free spreads, to make something more than what it is.

And the profit opportunities just sit there.

It’s not just here where the dealers publicly demonstrate their hoarding. If EFF is up you pretty much know what’s going on in the repo market. There is no obvious reason why month-end in repo should be so dry. We’ve become accustomed (though only during these Euro$ squeeze periods) to quarter-end runups in the GC rates. Month-end is something else.

That’s just what happened yesterday. The final trading day of a middle month in Q2 2019 for some reason became extra special hard in terms of repo market liquidity. It’s not nearly the insanity experienced at the very end of 2018, but the GC rate for UST collateral was fixed today at 2.807% (DTCC). That’s nearly 56 bps above RRP (literally off the chart below), and a lot more than yesterday’s 2.534%. The GC rate for MBS was even higher, 2.915%.

The few who do notice these vitally important indications will keep talking about T-bills or some other technical-sounding excuse. Meanwhile, going back to the original outbreak last year, the world keeps coming apart. The global economy’s minus signs keep piling up and proliferating.

If you are a big leveraged player, meaning just about every large financial entity on the planet, you can’t afford to be so sanguine or to keep your head stored so firmly, deeply in the sand. As illiquidity escalates with these warnings, the chance of the most dreaded phone call in finance rises.

The collateral call creeps ever closer, the one that can terminate your career and your firm if due care is not exercised. The lingering lesson of Bear.

Given this situation, it doesn’t matter one bit that you might agree with Economists. Let’s say you are ultra-positive on the economy. The unemployment rate in the US is the true picture of the domestic situation, inflation has to therefore rise. The world isn’t going to keep buying all the US federal debt, not with the economy on the rise and demand for UST’s dropping against that rising supply.

It’s going to be really bad for especially duration (meaning long end UST holders) – at some point.

Those factors, however, don’t mean a damn thing today. All that does matter is EFF and repo (and interest rate swaps, as well as FX). Liquidity is primary over everything. The more these “benign” problems continue forward and intensify, the less relevant those other parameters will be. The bond market massacre can easily wait. A long time. 

And that’s if you actually believe Economists.

They are thinking something else because they don’t get bonds. CNBC’s chief Economist Steve Liesman sent out a survey to a lot of others like him. Guess what? Surprise of all surprises, the Economists almost uniformly believe that Economists are right and the bond market must be wrong.

Almost two-thirds of them. 63% are still forecasting another Fed rate hike by the end of this year. Whereas bond and money markets continue to betting trillions on a cut perhaps more, not these guys. They are sticking with their econometric models where the unemployment rate cannot possibly be so faulty (again).

“The markets are irrationally pessimistic about the future. There is no recession coming,” wrote Chris Rupkey, chief financial economist at MUFG. “Cutting rates for low inflation at this time is ill-advised…The Fed should restart its gradual pace of rate hikes later on this year.” [emphasis added]

For them, green shoots and an overblown growth scare. It doesn’t matter that, according to the same survey, these same Economists had last year expected the 10-year UST yield to rise to 3.5% or more but now only expect 2.75% by the end of 2019. The difference is just transitory stuff. China trade tensions that will go away when a trade deal is done.

But that’s the thing. Here we are one-third of 2019 in the books already and EFF keeps showing up Jay Powell; repo keeps doing remarkably disruptive things. And the economic data continues to follow the obviously illiquid nature of global money – as do bond yields. Even the US economy’s biggest (purported) boom in a long time has proved vulnerable, pulling up especially lame recently in all the key components (income most of all).

None of these Economists ever studied Bill Dudley.

We’ve been here before, of course. What I wrote in May 2014could’ve easily been written today:

That sets up another “titanic” struggle between economists and money markets – academic models against those with actual money positions. The economist side sees taper as a signal that the economy is going to take off (as intended under the Bernanke scenario of influencing expectations), whereas the credit and dollar markets may be coming around to taper as optimal control, preserving policy margins ahead of economic turbulence.

We know which side stocks are betting on.

Stocks didn’t care, outside of seven months starting August 2015, that Economists got it wrong for the third time in the last almost twelve years dating back to Bill Dudley’s first ugly encounter with the curves in 2007. There was no recovery and acceleration in 2015, no big liftoff as had been planned by Economists and central bankers in 2014.

Even The New York Times two years too late finally fessed up and acknowledged what did happen instead.

Bonds were right. Euro$ #3 pushed the US economy very, very close to recession while the rest of the world suffered a variably intense nightmare. The way the markets are positioned now, that’s actually the upside to today’s confirmed Euro$ #4, the least worst case. If bonds are specifically right about rate cuts, that’s more of a downside still.

Then again, Economists and their models could just get lucky for once. That’s about all they have going for them at this point. When does it ever just work out great once all the biggest financial institutions in the world, despite what the Economists working for them say, all pile in on liquidity preferences? Pretty much never, especially when the reasons they are and have been are right there in front of everyone.

end

7  OIL ISSUES

 

end

8. EMERGING MARKETS

VENEZUELA

Venezuela pulls CNN and BBC off air. Venezuela  is a mess!

(courtesy zero hedge)

Venezuela Pulls CNN, BBC Off Air After Military Vehicles Plow Into Protesters

CNN and the BBC were quickly taken off the air in Venezuela on Tuesday by the government amid an apparent coup by forces loyal to National Assembly Leader Juan Guaidó.

As reported by CNN, “DirecTV, Net Uno, Intercable, and Telefónica all received orders from Venezuela’s government regulator Conatel to block CNN. (DirecTV and CNN are both owned by AT&T.)” while a spokesperson from the BBC told CNN that BBS Global News had been similarly taken off air by the South American country.

Embedded video

Jhomar Lóp[e]z@JhomarLopez

Momento exacto cuando el gobierno dictador saca del aire a CNN (en inglés) de la parrilla de programación por cable (canal 706) y censura aún más con Conatel.

¿Alguno tiene duda de que la libertad de expresión no existe en Venezuela?

Earlier Tuesday, CNN broadcast footage of military vehicles running over protesters in the capital city of Caracas.

Embedded video

Alerta News 24@AlertaNews24

🇻🇪 | REBELIÓN EN VENEZUELA: Tanquetas militares arrollan a grupo de manifestantes en Caracas:

Meanwhile US Secretary of State Mike Pompeo claims that Venezuelan President Nicolas Maduro was willing to leave the country for Cuba, only to be talked out of it by Russia.

“We’ve watched throughout the day, it’s been a long time since anyone’s seen Maduro,” said Pompeo in an interview with CNN‘s Wolf Blitzer.

“He had an airplane on the tarmac, he was ready to leave this morning as we understand it and the Russians indicated he should stay,” he added, noting “He was headed for Havana.

Embedded video

Jason K. Morrell

@CNNJason

Secretary Pompeo just told CNN’s Wolf Blitzer that Maduro had a plane on the tarmac ready to go earlier today… but Russia talked him out of it

wow.

END
Second day of unrest with Maduro claiming victory (so far). Pompeo now threatens military intervention with both Russia and China present in Venezuela.
(courtesy zerohedge)

Pompeo Threatens Military Intervention After Maduro Declares Victory Over ‘Attempted Coup’

Update (7:16 am ET): Here we go again…

Now that the months long simmering rebellion against Maduro has exploded into a full-fledged uprising – one that’s in danger of being brutally suppressed by the Maduro regime – it’s time for the US to revive its threats of military intervention with the added subtext of ‘this time, we mean it’.

After footage from yesterday’s riots showed regime tanks brutally crushing opposition supporters, Mike Pompeo appeared on Fox Business this morning and said that the US hasn’t ruled out military intervention.

  • U.S. SECRETARY OF STATE POMPEO SAYS MILITARY ACTION IN VENEZUELA IS POSSIBLE ‘IF THAT’S WHAT’S REQUIRED’, WOULD PREFER PEACEFUL TRANSITION -FOX BUSINESS INTERVIEW

His comments come as supporters of the regime and opposition prepare to take to the streets for another wave of massive demonstrations on Wednesday.

* * *

Venezuelan opposition leader and self-proclaimed president Juan Guaido has called for a second day of street protests on Wednesday, but after the Venezuelan government successfully beat back the Guaido-led “popular uprising” – as the vast majority of Venezuela’s military remained loyal to Nicolas Maduro – it’s looks like the Russia- and China-backed socialist regime has resisted this latest challenge to its rule.

The coup attempt was hardly bloodless – there were horrifying incidences of extreme violence – but for all the jawboning from President Trump, Vice President Mike Pence, Secretary of State Mike Pompeo and NSA John Bolton, it appears Guaido’s most prolific attempt yet to force Maduro from power was a spectacular failure. Some members of the military defected, but Maduro by and large retained control over the military and other levers of power. Presenting a surprising lack of confidence in Guaido, opposition supporters celebrated the release of Leopoldo Lopez from house arrest, the former opposition leader immediately sought refuge in the Chilean embassy.

Late on Tuesday, Maduro took to twitter to thank the supporters of his regime who took to the streets to help suppress the rebellion, and the leaders who stood up for the Bolivarian revolution.

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

Nicolás Maduro

@NicolasMaduro

Agradezco a todo el pueblo venezolano, su valentía, coraje y conciencia frente a este intento de golpe de Estado frustrado. Han demostrado que un pueblo movilizado es garantía de tranquilidad para la Patria. ¡Venezuela es Territorio de Paz e Independencia!

View image on Twitter

Nicolás Maduro

@NicolasMaduro

Saludo a los líderes, lideresas, gobiernos, movimientos sociales e intelectuales del mundo por sus pronunciamientos, muestras de solidaridad y apoyo a la Constitución, a la democracia y al Gobierno Bolivariano que presido. ¡El Pueblo de Venezuela les Agradece!

Flanked by military leaders, Maduro delivered a speech where he demanded that all opposition supporters who participated in the day’s violent skirmishes must be identified and arrested, and he bragged that the military base at La Carlota resisted a takeover attempt.

In honor of May Day, widely celebrated as International Workers Day, Maduro called for supporters to take to the streets for a ‘millions-strong march’.

“Tomorrow, the first of May, we will have a large, millions-strong march of the working class,” Maduro said in a Tuesday “We have been confronting different types of aggression and attempted coups never before seen in our history.”

Forming an  unusual alliance, it appears CNN has joined the Trump administration in spreading disinformation about the events in  Venezuela to try and destabilize the regime.

Alan MacLeod@AlanRMacLeod

CNN uses picture of pro-Guaido soldiers shooting (note the blue armbands) as proof of Maduro government “mowing down” its own citizens. Standard.

Jake Tapper

@jaketapper

CNN live in Venezuela as Maduro government mows down citizens in streets @StePozzebon reports @TheLeadCNN https://cnn.it/2IRMvkQ

View image on Twitter

Still, Guaido hasn’t given up yet, calling for his “Operation Liberty” to continue on Wednesday, he asked opposition supporters to take to the streets for the ‘largest march in history’ (though, after seeing footage of opposition supporters being crushed by a tank on Tuesday, we imagine that some might have second thoughts).

Juan Guaidó

@jguaido

Mañana continuamos con la ejecución de la . Iniciamos la fase final y estaremos de forma sostenida en las calles hasta lograr el cese de la usurpación.

¡Vamos con todo, con más fuerza y determinación! https://youtu.be/Vv5_V4YEAAU

Meanwhile, Russia’s foreign ministry has said Pompeo’s claim that Moscow had convinced Maduro to resist the coup and cling to power was “fake news”.

Pompeo said Tuesday that Maduro had intended to step down, but Russia had convinced him to stay. “Washington tried its best to demoralise the Venezuelan army and now [has] used fakes as a part of an information war,” Moscow spokeswoman Maria Zakharova told CNN on Wednesday.

As Venezuelans prepare for a second day of unrest, the number of dead and wounded in Tuesday’s clashes hasn’t yet been reported.

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 AM….

Euro/USA 1.1237 UP .0022 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 111.30  DOWN .091 (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 1.3068   UP   0.0003  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3396 UP .0006 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 WEDNESDAY morning in Europe, the Euro ROSE BY 22 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1237 Last night Shanghai COMPOSITE CLOSED UP 15.84 POINTS OR 0.52%.

 

 

 

 

//Hang Sang CLOSED 

 

 

 

/AUSTRALIA CLOSED UP 52// EUROPEAN BOURSES GREEN EXCEPT LONDON

 

 

 

 

 

 

The NIKKEI: this WEDNESDAY morning CLOSED  

 

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED GREEN EXCEPT LONDON/

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED 

 

 

 

 

 

/SHANGHAI CLOSED 

 

 

 

 

 

 

 

 

 

Australia BOURSE CLOSED UP .75% 

 

 

Nikkei (Japan) CLOSED 

 

 

 

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1282.00

silver:$14.88

Early WEDNESDAY morning USA 10 year bond yield: 2.50% !!! UP 0 IN POINTS from TUESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.93 UP 0  IN BASIS POINTS from YESTERDAY night.

USA dollar index early WEDNESDAY morning: 97.37 DOWN 11 CENT(S) from  TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing  WEDNESDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.12%  DOWN 0 in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: -.04%  DOWN 0   BASIS POINTS from TUESDAY/JAPAN losing control of its yield curve/

 

SPANISH 10 YR BOND YIELD: 1.00% DOWN 0   IN basis point yield from TUESDAY

ITALIAN 10 YR BOND YIELD: 2.56 DOWN 0  POINTS in basis point yield from TUESDAY/

 

 

the Italian 10 yr bond yield is trading 156 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES +.01%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.55% 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 WEDNESDAY

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

Euro/USA 1.1247 UP     .0033 or 33 basis points

 

USA/Japan: 111.15 DOWN 0.246 OR YEN UP 25 basis points/

Great Britain/USA 1.3088 UP .0049 POUND UP 49  BASIS POINTS)

Canadian dollar DOWN 23 basis points to 1.3417

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed AT 6.7343    0N SHORE  (UP)

THE USA/YUAN OFFSHORE:  6.7266  (YUAN UP)

TURKISH LIRA:  5.9510 EXTREMELY DANGEROUS LEVEL.2

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

 

 

 

Your closing 10 yr USA bond yield DOWN 3 IN basis points from TUESDAY at 2.47 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.89  DOWN 6 in basis points on the day

Your closing USA dollar index, 97.28 DOWN 20  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 WEDNESDAY: 12:00 PM 

London: CLOSED DOWN 34.26  0.46%

German Dax :  CLOSED

Paris Cac CLOSED

Spain IBEX CLOSED

Italian MIB: CLOSED UP

 

 

 

 

 

WTI Oil price; 63.11 1:00 pm

Brent Oil: 71.67 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    64.75  THE CROSS LOWER BY 0.13 ROUBLES/DOLLAR (ROUBLE HIGHER BY 13 BASIS PTS)

 

TODAY THE GERMAN YIELD RISES  TO +.01 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 :  63.61

 

 

BRENT :  72.14

USA 10 YR BOND YIELD: … 2.50…   VERY DEADLY//

 

 

 

 

 

 

 

 

USA 30 YR BOND YIELD: 2.91..VERY DEADLY

 

 

 

 

EURO/USA 1.1192 ( DOWN 17   BASIS POINTS)

USA/JAPANESE YEN:111.42 UP .020 (YEN DOWN 2 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.66 UP 18 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.3048 UP 9 POINTS

 

the Turkish lira close: 5.9623

 

the Russian rouble 64.81   DOWN 19 Roubles against the uSA dollar.( DOWN 19 BASIS POINTS)

Canadian dollar:  1.3444 DOWN 54 BASIS pts

USA/CHINESE YUAN (CNY) :  6.7343  (ONSHORE)/

 

USA/CHINESE YUAN(CNH): 6.7336 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,+0.01%

 

The Dow closed  DOWN 162.77 POINTS OR 0.61%

 

NASDAQ closed DOWN 45.75 POINTS OR 0.57%

 


VOLATILITY INDEX:  14.80 CLOSED UP 1.68

 

LIBOR 3 MONTH DURATION: 2.575%//

 

 

 

FROM 2.579

 

 

 

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

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

 

Stocks, Bonds, & Bullion Slammed As Powell Pivots “Transitorily” Hawkish

Despite his best efforts, Fed Chair Powell managed to spoil the party with his use of one of The Fed’s favorite words – “transitory” – signaling that expectations for rate-cuts predicated on inflation staying low are perhaps not as set in stone as the market believes.

The hawkish tilt was very evident in the market’s implied rate-change pricing…

Additionally, Powell commented on “elevated (but not extreme) asset values.”

David Rosenberg@EconguyRosie

If Powell is so sure the decline in core inflation is transitory, why wasn’t this mentioned in the press statement?

The Dollar spiked, and bonds, stocks, and gold slipped on the “transitory” comment…

 

Trannies were worst performers on the day, but Powell’s comments dragged stocks broadly lower on the day…

 

VIX and Stocks continue to decouple…

 

Credit spreads blew out quite notably Powell’s “transitory” comments…

 

Treasury yields ended the day higher…with the short-end dramatically so…

 

Not that the weak ISM and initial Fed statement sent yields lower before Powell’s “transitory” comment…

 

The dollar followed a similar path, dropping initially and then spiking on “transitory”…

 

Ugly day for Dr.Copper…and Silver…

 

Gold pumped initially, then dumped as the dollar spike on “transitory” comments…

 

Silver snapped below its 200DMA…

 

 

Finally, with today’s ugliness in ISM, ‘soft’ survey data has fallen below its ‘hard’ data…

 

 

END

Market trading:/FOMC//

trouble as the patient Fed cuts the rate that it pays the banks.  However it ignores soaring asset prices.  Bond yields should start tumbling!!

“Patient” Fed Cuts IOER, Leaves Fed Funds Flat, Ignores Soaring Asset Prices

With employment and economic growth data shining even as inflation disappoints, and the gap between the market and The Fed remaining vast in terms of next actions, today’s FOMC statement (and press conference) is expected to be as ‘patient’ as possible with Powell desperately sticking to his script.

The market is pricing in 32bps of rate cuts for 2019 and more for 2020…

Since the last FOMC meeting (March 20th) confirmed The Fed’s dovish tilt, stocks have soared, gold has dropped, and the dollar and bonds have gained modestly…

At the same time, the yield curve has flattened notably…

And today is expected to confirm no change whatsoever, and no new economic projections, the main event will likely be Powell’s press conference.

Here are Bloomberg’s Key Takeaways from the FOMC decision:

  • For third straight meeting, the Fed leaves federal funds target range unchanged at 2.25 percent to 2.5 percent, as forecast; it repeats language pledging to be “patient” on rate changes amid global economic and financial developments, muted inflation pressures.
  • The FOMC adjusts its language on the economy, characterizing economic growth and job gains as “solid” while saying consumer spending, business investment slowed in the first quarter; the Fed acknowledges both overall and core inflation have declined and are running below 2 percent.
  • The statement shows central bank still reluctant to signal a policy bias in either direction, despite Trump’s call for an interest-rate cut — something projected by financial markets.
  • The decision is unanimous at 10-0; there have been no FOMC dissents since Powell became chairman in February 2018.

No comment whatsoever on markets or valuations amid this asymmetrical dovish bias.

Most notably with Fed funds are trading above interest on excess reserves, The Fed cut IOER by 5bps to 2.35% hoping to push banks to lend rather than parking cash at the central bank.

This is the third time in a year that the Fed has adjusted the gap between IOER and fed funds; the Fed cites a desire to foster trading in federal funds “well within the FOMC’s target range.”

To be clear, the IOER is a direct response to the relatively increasing scarcity of reserves (liquidity shortage) amid the balance sheet runoff.

As BMO explains:

The most important development from the FOMC this afternoon was the cut of IOER to 2.35%; a drop of 5 bp while the Committee maintained the target Fed funds range of 2.25-2.50%.

The front-end of the curve is intuitively outperforming on this ‘fine-tuning’ cut and the curve, which has been grinding flatter on the day, has snapped back steeper. This also has created an outside-day steeper for the curve (very rare), which projects to at least 28 bp in 2s/10s.

Very little was changed in the statement, other than to ‘downgrade’ the current state of inflation to “On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2 percent.” The emphasis on lowflation puts the onus on core CPI/PCE to drive the next move for the Fed — hike or cut. We’ll be listening to hear more from Powell at the press conference on this topic.

Bespoke Investment Group macro strategist George Pearkes weighs in:

Focus will be on the change in tone around inflation language and “slowed” first quarter numbers but to me that seems to be a justification for the “patience” rather than a forecast given multiple FOMC members have commented on upside data surprise ahead of the blackout.

As Bloomberg notes, a Fed hold could be music to the stock market’s ears. Bespoke Investment Group notes that the S&P 500 Index’s forward one-month returns after Fed meetings since 1994 have been best when the central bank has stood pat.

*  *  *

Redline below…

Which looks a lot like Goldman’s…

 

end

Lo and behold:  bond yields are tumbling: the real problem is the scarcity of dollars (eurodollars) i.e. collateral

(courtesy zerohedge)

Banks, Bond Yields, & Rate-Cut Beliefs Tumble After Fed Cuts IOER

The market has instantly priced in an even more dovish Fed (now expecting 37bps of rate cuts to the end of 2019) as the IOER cut has dragged down bank stocks and bond yields broadly…

 

Bond yields are lower…

 

And bank stocks are sliding…

 

As BMO explains:

The most important development from the FOMC this afternoon was the cut of IOER to 2.35%; a drop of 5 bp while the Committee maintained the target Fed funds range of 2.25-2.50%.

The front-end of the curve is intuitively outperforming on this ‘fine-tuning’ cut and the curve, which has been grinding flatter on the day, has snapped back steeper. This also has created an outside-day steeper for the curve (very rare), which projects to at least 28 bp in 2s/10s.

To be clear, the IOER is a direct response to the relatively increasing scarcity of reserves (liquidity shortage) amid the balance sheet runoff.

end

ii)Market data/

Soft data report ISM (but generally reliable) reports a plunging USA mfg data and the data is at 2016 Oct lows. The report seems sceptical that demand will perisis

(courtesy zerohedge)

ISM Plunges To Oct 2016 Lows As US “Manufacturers Seem Sceptical That Demand Will Persist”

Following Canada’s Manufacturing PMI plunge into contraction in April, Markit reported US Manufacturing saw a very modest rebound in April (from 52.4 to 52.6) despite the slowest growth in employment in two years.

ISM was considerably worse, plunging to its weakest since October 2016

 

The gauge for export orders fell below 50 for the first time in three years while imports missed the threshold for the first time in two years, the latest evidence President Donald Trump’s trade wars are weighing on factories.

The measure for new orders also slipped to near the weakest since 2016, indicating softer demand. At the same time, the inventories gauge increased, suggesting stockpiles continue to expand, a trend that will likely eventually reverse and be a drag on growth.

ISM’s employment gauge fell to near a two-year low, signaling weakness ahead of Friday’s U.S. jobs report.

The index of prices paid dropped to 50, a signal that inflation pressures are likely to remain muted.

Chris Williamson, Chief Business Economist at IHS Markit said:

“Although the PMI ticked higher in April, the survey remains consistent with manufacturing acting as a drag on the economy at the start of the second quarter, albeit with the rate of contraction easing. Historical comparisons indicate that the survey’s output gauge needs to rise above 53.5 to signal growth of factory production. As such, the data add to signs that the economy looks set to slow after the stronger than expected start to the year.

 

Employment growth also disappointed as hiring slipped to the lowest for nearly two years,albeit in part due to firms reporting difficulties finding staff amid the current tight labour market.

“There was better news on the order book front, however, with inflows of new business rising and firms signalling an improved export performance. Unfortunately, on balance, manufacturers seem sceptical that the rise in demand will persist, with future expectations of output growth slumping lower in April.

“Both input cost and factory gate price inflation rates meanwhile eased further, down to the lowest for over one and a half years, hinting that consumer price inflation rates will have continued to cool in April.”

So, probably best for Jay Powell to ignore the hard data and focus on the weak surveys to provide cover for his dovishness.

end
This is not good:  Mortgage refis have now collapsed the most in 6 years despite the reversal in the rise of rates:
(courtesy zerohedge)

Party’s Over – Mortgage Refinancings Collapse Most In 6 Years Despite Falling Rates

The party’s over. Despite a reversal of the modest rise in mortgage rates in early March, mortgage applications continue to collapse.

Overall, mortgage applications fell 4.3% on the week, following last week’s 7.3% plunge; but refis tumbled 5.0% on the week…

 

In fact this is the biggest four-week crash in refinancings since March 2013…

Is the housing market really this sensitive to mortgage rates? If so, Jay Powell is in an even more serious box here than even he knows.

And with the market pricing in 30bps of rate-cuts in 2019, where can Powell go from here?

iii)USA ECONOMIC/GENERAL STORIES

 

SWAMP STORIES

The truth behind that letter Mueller wrote to Barr…in a nutshell, Mueller states to Barr that there is nothing inaccurate in the report only the fact that the media misinterpreted the stuff on obstruction

(courtesy zerohedge)

About That Letter That Mueller Wrote To Barr…

 

Another deep state “leak” has hit the tape, and as usual it has gone to the WaPo and NYT almost at the exact same time… but this it’s even more laughable than usual.

In what the WaPo breathlessly reports late on Tuesday was a rebuke and “complaint” to Attorney General William Barr, special counsel Robert Mueller sent a letter to the AG in late March, just days after Barr sent out his summary to Congress, in which Mueller stated that Barr’s 4-page summary to Congress on the sweeping Russia investigation failed to “fully capture the context, nature, and substance” of Mueller’s work and conclusions, citing a copy of the letter it had obtained using its trusted deep intel sources.

This is what Mueller said to Barr, according to the leaked NSA intercept:

There is now public confusion about critical aspects of the results of our investigation. This threatens to undermine a central purpose for which the Department appointed the Special Counsel: to assure full public confidence in the outcome of the investigations.”

And if one reads just that, it certainly does not look good for Attorney General Barr, especially just one day before his first official Congressional hearing on the topic of the Mueller report: so bad that even the absolute lunatic fringe of conspiracy gate – which had mercifully shut up for the past month with its daily predictions that this member of the Trump clan is going to jail, or that website will be shut down – has roared back into life with the sage assessment that “this is bad.”

Pouring more fuel on the fire, the always pithy Axios adds that “this revelation about Mueller’s dissatisfaction with the characterization of his report will likely escalate the growing rift over Barr’s handling of the special counsel’s investigation. House Democrats, who have expressed distrust in the attorney general, are set to vote on Wednesday to allow House Judiciary Committee lawyers to question Barr at Thursday’s hearing.”

Or maybe not, and perhaps the WaPo/NYT report is not “so bad” if one actually reads it, because once the breathless WaPo finally does come up for air, we get to paragraph 13 – a point by which most readers have turned out – to read the following real punchline in the WaPo report:

When Barr pressed Mueller on whether he thought Barr’s memo to Congress was inaccurate, Mueller said he did not…

So, Mueller felt there was confusion… but he did not think the memo was inaccurate. Wait, what’s going on here and how is this even a story? Well, if we read the rest of the above sentence, we find the true object of Mueller’s “complaint”:

[Mueller] felt that the media coverage of it was misinterpreting the investigation, officials said.

Which means that, as the WaPo itself reports, what Mueller was really angry with was the coverage of his report by media such as… the WaPo and the NYT?? The irony, it burns.

But wait, because if one reads even further – and yes, we know most Russiagaters have troubles getting beyond sentence one so they are excused – we find that throughout a subsequent 15 minutes telephone conversation between the special counsel and the attorney general, Mueller’s main worry was “that the public was not getting an accurate understanding of the obstruction investigation.”

This goes back to what Mueller’s letter requested: “that Barr release the 448-page report’s introductions and executive summaries, and made some initial suggested redactions for doing so, according to Justice Department officials,” the WaPo writes.

What happened then? A few weeks later Barr did just that, and absent occasional redactions – some of which apparently revealed that Russia had taped Bill Clinton having phone sex with Monica Lewinsky – he did just that.

So if Mueller thought Barr’s memo was not inaccurate, and his ire was instead targeted at the media for “misinterpreting the investigation” – although it remains unclear just how they did this, after all Mueller does not dispute that there was no collusion (yes, Russiagaters, that means you) and did not dispute Barr’s conclusion of no obstruction – then what is the point of these two rather confused pieces? Well, as noted above, tomorrow Barr is scheduled to testify on Wednesday before the Senate Judiciary Committee about the investigation, and the entire article is meant to focus on the headlines of the WaPo (and NYT) article, and certainly not on paragraph 13 which, not only refutes the prevailing tone that Barr did something wrong, but in fact exonerates him. But that won’t have any impact on tomorrow’s hearing which is now assured to be a complete kangaroo court.

As for tonight’s really big, if unspoken, story – if this is the best leak Mueller has to defy Barr and the president, then Trump has indeed won.

end

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

 

White House’s Mulvaney says China trade talks will be resolved one way or another within two weeks   https://www.cnbc.com/2019/04/30/mick-mulvaney-says-trump-china-trade-talks-will-be-resolved-in-two-weeks.html

The incentive to game April performance induced the usual suspects to engineer a ‘V’ rally on Tuesday.

While manipulators pushed stocks and ESMs higher to game April performance, Apple remained about 2% lower at midday on concern that its earnings would be disappointing.

Trump uses verbal intervention to boost the stock market at convenient times – like expiration and when actors want to push stocks higher.  DJT did it yesterday afternoon with another Fed bashing.

@realDonaldTrump: China is adding great stimulus to its economy while at the same time keeping interest rates low. Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go up like a rocket if we did some lowering of rates, like one pointand some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small! [‘Stupid is, as stupid says!’ – Forrest Trump]

The Forrest Trump rally was short lived.  After his bombastic, stocks traded sideways from 13:40 until someone juiced ESMs on the close.

Trump drops cyber theft demands in bid for swift trade deal with China

US set to accept watered-down security pledge from Beijing to reach summer signing target

https://www.ft.com/content/3cb5bfda-6b0e-11e9-80c7-60ee53e6681d

Mastercard Sticks With Forecast Even as Spending Growth Cools

Card spending climbed 12 percent through March to $1.48 trillion, just below the $1.49 trillion analysts in a Bloomberg survey were expecting and the slowest growth since the third quarter of 2017

https://www.bloomberg.com/news/articles/2019-04-30/mastercard-sticks-with-forecast-even-as-spending-growth-cools

The fear among current and former Fed high officials is palpable.  Why?  The greatest debt and sovereign bond bubble in the history of civilization

The Fed Should Dump Its Interest-Rate Target: Bill Dudley [ex-NY Fed President]

The federal funds rate has outlived its usefulness.

    For one, the Fed’s securities purchases — known as quantitative easing — have left banks with ample excess reserves… So banks no longer have much need to borrow or lend federal funds. This has caused the market to shrink significantly. It now consists largely of lending from institutions that aren’t allowed to earn interest on cash balances held at the Fed, such as Fannie Mae and Freddie Mac…

    The interest rate on reserves has become the Fed’s most effective tool of monetary policy, putting a floor under the interest rates at which banks are willing to lend… setting a target for the federal funds rate has become superfluous, and at times even a nuisance. Over the past year, for example, the Fed has had to make small technical adjustments to the interest rate on reserves to reduce the risk that the federal funds rate might inadvertently climb above the top end of the Fed’s target range…  https://www.bloomberg.com/opinion/articles/2019-04-30/the-fed-should-dump-its-interest-rate-target

Fed’s Key Rate Edging Closer to Top of Band as Repo Rates Surge

Borrowing costs in one of the key U.S. funding markets soared on the final trading day of April, with the rate on overnight general collateral repurchase agreements climbing to levels unseen since the end of the first quarter. The rate reached around 2.88 percent in early New York trading hours, up from roughly 2.57 percent on Monday, ICAP data show…

https://www.bloomberg.com/news/articles/2019-04-30/u-s-funding-rates-squeezed-higher-as-april-draws-to-a-close

@paulsperry_ [issues an allegation]: FusionGPS founder Glenn Simpson’s alcohol-fueled reckless past & history of run-ins w federal & other law enforcement raise new questions about the FBI relying on a dossier created by one of his subcontractors to support investigations & wiretaps of the Trump campaign

 

Mark Meadows: Republicans Eyeing Criminal Referrals for ‘Two or Three’ Individuals Connected to Fusion GPS    https://dailycaller.com/2019/04/30/mark-meadows-criminal-referrals-fusion-gps/

 

Sanders suggests Disney should use ‘Avengers’ profits to ‘pay all of its workers a middle class wage

https://thehill.com/homenews/senate/441237-sanders-suggests-disney-should-use-avengers-profits-to-pay-all-of-its-workers

 

@ABC: Pres. Trump’s slogan is “Make America Great Again.” Asked what his slogan may be, Joe Biden tells @RobinRoberts, “Make America Moral Again. [You can’t make this up!]  https://abcn.ws/2ZJqcmA

 

Biden Swims Naked, Upsetting Female Secret Service Agents, Book Claims

https://www.usnews.com/news/blogs/washington-whispers/2014/08/01/biden-swims-naked-upsetting-female-secret-service-agents-book-claims

 

@AnnCoulter [stirring the pot]: Americans used to brag that we were such a rich country that our women didn’t HAVE to work. Now, that’s a luxury only for the rich, like private planes and designer bags.  Only women with jobs like “Senator” or “Trump’s Favorite Daughter” think it’s great that families are so stretched that wives HAVE to work.  Pro Tip: Most jobs suck.

 

-END-

 

I WILL SEE YOU THURSDAY NIGHT
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