June 19/FOMC DOVISH BUT DO NOT CUT RATES//GOLD DOWN $1.65 COMEX/COMEX CLOSE BUT JUMPS 16 DOLLARS ON THE DOVISH FED//ACCESS PRICE GOLD: $1360.50//SILVER CLOSES DOWN 3 CENTS BUT JUMPS 16 CENTS IN ACCESS MARKET: $15.16//CHRIS MARCUS INTERVIEWS ME WITH THE INTERVIEW BEING LAST THURSDAY//HUGE INCREASE IN OPEN INTEREST IN SILVER AS THE CROOKS TRY AND CONTAIN THE SILVER PRICE FROM BREAKING $15-15.06//HUGE NUMBERS OF EXCHANGE FOR PHYSICALS UNDERWRITTEN AND THIS IS A DANGER TO THE BANKERS IF THESE ARE EXERCISED// .CHINA’S INTERBANKING SYSTEM IS NOW FROZEN/APPLE THINKING OF MOVING 30% OF PRODUCTION FROM CHINA////.TRUMP READY TO SANCTION TURKEY ON THE S 400 PURCHASE//ONE SWAMP STORY FOR YOU TONIGHT//

 

GOLD: $1345.15  DOWN $1,85 (COMEX TO COMEX CLOSING)

Silver:  $14.98 DOWN 3 CENTS  (COMEX TO COMEX CLOSING)//

 

Closing access prices:

Gold : $1360.50

 

silver:  $15.16

 

 

 

 

 

COMEX DATA

 

 

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

today RECEIVING 8/19

EXCHANGE: COMEX
CONTRACT: JUNE 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,346.600000000 USD
INTENT DATE: 06/18/2019 DELIVERY DATE: 06/20/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
624 C BOFA SECURITIES 7
661 C JP MORGAN 8
737 C ADVANTAGE 19 4
____________________________________________________________________________________________

TOTAL: 19 19
MONTH TO DATE: 2,133

 

 

I wrote the following in yesterday’s commentary;

“TOMORROW IS THE BIG FOMC MEETING.  DRAGHI PREEMPTED POWELL TODAY BY UNLEASHING POSSIBLE QE IN EUROPE

HERE ARE THE KEY PRICES OF GOLD AND SILVER TO WATCH FOR:

 

GOLD: $1350.  THIS LEVEL IS IMPORTANT FOR THE BANKERS AND NO DOUBT HUGE DERIVATIVE TRADES WERE INITIATED HERE.  THE BANKERS WILL DEFEND THEIR LIVES AT THIS LEVEL.  GOLD HAS BEEN BEATEN BACK AT LEAST 6 TIMES ONCE GOLD PIERCED $1350.  (check!/price surpassed)

SILVER:  $15.06.  MANY ARE COMMENTING ON $15.00 BUT THE REAL PRICE TO WATCH IS $15.06 AS THIS WAS THE PRICE THAT SILVER WAS BEATEN BACK DOWN INTO THE LOW 14 DOLLAR LEVEL.  A PIERCING OF 15.06 WILL CREATE NIGHTMARE FOR OUR BANKERS.  (check!!price surpassed)

 

STAY TUNED FOR TOMORROW..IT WILL BE A BIG DAY.”

 

it sure was!!!..

 

Now we watch for the banking derivatives on gold and silver to blow up!

 

 

your data…

 

NUMBER OF NOTICES FILED TODAY FOR  JUNE CONTRACT: 19 NOTICE(S) FOR 1900 OZ (0.3701 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  2133 NOTICES FOR 213,300 OZ  (6.6345 TONNES)

 

 

 

SILVER

 

FOR JUNE

 

 

38 NOTICE(S) FILED TODAY FOR 190,000  OZ/

 

total number of notices filed so far this month: 391 for 1955,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 9111 UP 28 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 9116 UP 32

 

 

 

 

end

 

XXXX

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI ROSE A HUMONGOUS  SIZED 6469 CONTRACTS FROM 232,997 UP TO 239,466 ACCOMPANYING THE 18 CENT RISE IN SILVER PRICING AT THE COMEX.( LIQUIDATION OF THE SPREADERS HAVE STOPPED FOR GOLD . HOWEVER WE ARE WITNESSING A RISE IN SPREADING ACCUMULATION BY THE BANKERS IN SILVER)..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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

0 FOR JUNE, 1300 FOR JULY. 0 FOR AUGUST, 0 FOR SEPT, AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1300 CONTRACTS.

WITH THE TRANSFER OF 1330 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 1300 EFP CONTRACTS TRANSLATES INTO 6.50 MILLION OZ  ACCOMPANYING:

1.THE 18 CENT GAIN 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.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.960 MILLION OZ STANDING FOR SILVER IN JUNE//

 

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

33,829 CONTRACTS (FOR 13 TRADING DAYS TOTAL 33,829 CONTRACTS) OR 169.145 MILLION OZ: (AVERAGE PER DAY: 2602 CONTRACTS OR 13.01 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JUNE:  169.145 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 24.16% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2019 TO DATE SILVER EFP’S:          1039.90    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.

MAY 2019: TOTAL EFP ISSUANCE:                                                136.55 MILLION OZ

RESULT: WE HAD A HUMONGOUS SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 6469, WITH THE 18 CENT RISE IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A  STRONG SIZED EFP ISSUANCE OF 1300 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 WILL RESUME THEIR LIQUIDATION OF THE SPREAD TRADES FOR SILVER ONCE THE JUNE CONTRACT COMMENCES IN EARNEST….

TODAY WE GAINED AN ATMOSPHERIC SIZED: 8128 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1300 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 6469  OI COMEX CONTRACTS. AND ALL OF THIS HUGE DEMAND HAPPENED WITH A  3 CENT GAIN IN PRICE OF SILVER AND A CLOSING PRICE OF $14.98 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY!! 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.199 BILLION OZ TO BE EXACT or 171% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 38 NOTICE(S) FOR 190,000 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/ A MAY:  18.845 MILLION OZ ..JUNE 2.960 MILLION OZ//
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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

.

WITH RESPECT TO SPREADING:  WE NO DOUBT HAD VERY STRONG ACTIVITY OF  SPREADING ACCUMULATION IN SILVER TODAY AS TOTAL OI ROSE SHARPLY WITH THE GOOD GAIN OF 18 CENTS. 

 

 

 

FOR NEWCOMERS, HERE IS THE MODUS OPERANDI OF THE CORRUPT BANKERS WITH RESPECT TO THEIR SPREAD/TRADING.

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCHED TO SILVER AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX SILVER OPEN INTEREST WILL RISE FROM NOW ON UNTIL ONE WEEK PRIOR TO FIRST DAY NOTICE AND THAT IS WHEN THEY START THEIR CRIMINAL LIQUIDATION.

HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NO INTO THE NON ACTIVE DELIVERY MONTH OF MAY HEADING TOWARDS THE VERY ACTIVE DELIVERY MONTH OF JUNE.

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES, HERE IS THE BANKERS MODUS OPERANDI:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST IS STARTING TO RISE IN THIS NON ACTIVE MONTH OF JUNE 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 (JULY), 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.” 

 

IN GOLD, THE OPEN INTEREST ROSE BY A FAIR 2295 CONTRACTS, TO 525,636 WITH THE STRONG $7.60 PRICING GAIN WITH RESPECT TO COMEX GOLD PRICING YESTERDAY// /THE SPREADING LIQUIDATION HAS STOPPED AND THESE SPREADERS HAVE ALREADY MORPHED INTO SILVER AND THEY ARE INTO THE ACCUMULATION PHASE OF THEIR OPERATION. THUS THE GAIN IN OI IS REAL AS INVESTORS ARE POURING INTO THE GOLD SECTOR  

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 7659 CONTRACTS:

APRIL 0 CONTRACTS,JUNE: 0 CONTRACTS, AUGUST 2019: 8495 CONTRACTS, DEC>  0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 525,636.  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 STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 10,790 CONTRACTS: 2295 CONTRACTS INCREASED AT THE COMEX  AND 8495 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 10,790 CONTRACTS OR 1,079,000 OZ OR 33.56 TONNES.  YESTERDAY WE HAD A GOOD GAIN OF $7.60 IN GOLD TRADING….AND WITH THAT REASONABLE GAIN IN  PRICE, WE  HAD A HUMONGOUS GAIN IN GOLD TONNAGE OF 33.56  TONNES!!!!!! THE BANKERS WERE SUPPLYING COPIOUS SUPPLIES OF SHORT GOLD COMEX PAPER.

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JUNE : 117,778 CONTRACTS OR 11,777,800 oz OR 366.33 TONNES (13 TRADING DAYS AND THUS AVERAGING: 9059 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 13 TRADING DAYS IN  TONNES: 366.33 TONNES

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

THUS EFP TRANSFERS REPRESENTS 366.33/3550 x 100% TONNES =10.31% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     2,617.81 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

MAY 2019 TOTAL ISSUANCE:                    449.10 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 FAIR SIZED INCREASE IN OI AT THE COMEX OF 2295 WITH THE PRICING GAIN THAT GOLD UNDERTOOK ON YESTERDAY($7.60)) //.WE ALSO HAD  A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 8495 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 8495 EFP CONTRACTS ISSUED, WE  HAD A STRONG SIZED GAIN OF 10,790 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

8495 CONTRACTS MOVE TO LONDON AND 2295 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 33.56 TONNES). ..AND THIS INCREASE OF  DEMAND OCCURRED WITH A GOOD GAIN IN PRICE OF  $7.60 WITH RESPECT TO YESTERDAY’S TRADING AT THE COMEX. WE  HAD ZERO PRESENCE OF SPREADING ACCUMULATION IN GOLD  ///TODAY/

 

 

 

we had:  19 notice(s) filed upon for 1,900 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $1.65 TODAY//

 

INVENTORY RESTS AT 764.10 TONNES

 

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

SLV/

WITH SILVER DOWN 3 CENTS TODAY:

 

NO CHANGES WITH RESPECT TO SILVER INVENTORY  AT THE SILVER SLV:

 

 

 

 

 

 

/INVENTORY RESTS AT 319.07  MILLION OZ.

 

 

end

 

OUTLINE OF TOPICS TONIGHT

 

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

1. Today, we had the open interest in SILVER ROSE BY A HUMONGOUS SIZED 6469 CONTRACTS from 232,997 UP TO 239,466 AND CLOSER TO THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..THE SPREADERS HAVE COMMENCED THEIR ACCUMULATION OF OPEN INTEREST CONTRACTS IN SILVER AND STOPPED THE LIQUIDATION OF THE SPREADERS IN GOLD

 

 

 

 

EFP ISSUANCE: 

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

 

FOR JUNE 0 CONTRACTS AND JULY: 1300 CONTRACTS FOR AUGUST: 0, FOR SEPT. 0  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1300 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 6469 CONTRACTS TO THE 1300 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN AN ATMOSPHERIC GAIN OF 7769 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 38.85MILLION 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 7.475 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  18.765 MILLION OZ FOR MAY AND NOW 2.960 MILLION OZ FOR JUNE.

 

 

RESULT: A HUGE INCREASE IN SILVER OI AT THE COMEX WITH THE 18 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 1300 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 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

I)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 27.65 POINTS OR 0.96%  //Hang Sang CLOSED UP 703.37 POINTS OR 2.56%   /The Nikkei closed UP 361.16 POINTS OR 1.72%//Australia’s all ordinaires CLOSED UP 1.21

/Chinese yuan (ONSHORE) closed UP  at 6.9043 /Oil UP TO 3.83 dollars per barrel for WTI and 61.72 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 6.9243 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9068 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

 

 

3A//NORTH KOREA/ SOUTH KOREA

 

 

 

 

 

b) REPORT ON JAPAN

 

3 China/Chinese affairs

i)China/APPLE/

This  is not good for China as Apple now plans to shift up to 30% of production outside of China.  The tariffs wars are certainly having their effect

( zerohedge)

ii)This is a huge story: China’s interbank market has just frozen.  Their economy is now in trouble
(courtesy zerohedge)

4/EUROPEAN AFFAIRS

 

i)GERMANY/ECB/EUROPE

Jim Grant of Grant’s Interest Rate Observer notes the comments from the CEO of Germany’s  2nd largest bank: “In a few years we will notice that the ECB experiment was a historical mistake”

(Jim Grant)

ii)ITALY

Tensions are boiling with the MIn BOT issue

( Mish Shedlock/Mishtalk)

iii)EUROPE/USA/JAPAN

The following is a must read as Luongo explains in detail what happened yesterday and probable scenarios for the upcoming months
(courtesy Tom Luongo)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

i)TURKEY/USA

The Turkish lira plummets as Trump and allies are ready to impose sanctions on a crippled Turkey economy. They are going to target the big Turkish companies with sanctions against doing business with the west.

this is deadly..

(courtesy zerohedge)

ii)Russia,India, China/USA
In the latest TIC report we are witnessing not only Russia but also China and India shuning the dollar in favour of gold
The Russian director of Foreign Intelligence now calls the dollar becoming “toxic”
(zerohedge)

6. GLOBAL ISSUES

CANADA

Strange:  the Loonie spikes higher after Cdn core inflation soars to 10 yr highs.  The view is that the North is emerging from its growth slowdown…I beg to differ..

(courtesy zerohedge)

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA/

 

 

 

9. PHYSICAL MARKETS

i)Bill Murphy explains the significance of $1350 gold

( Bill Murphy/GATA/Reluctant Preppers)

ii)GOOD NEWS!! Robert Labourne our resident expert on BIS affairs reports a huge decline in gold activity via gold swaps. I guess the reason is the lack of gold.

( Robert Lambourne/GATA)

iiii)Nikkei Asian news reports what we have been reporting:  China is reducing its USA dollar stockpile and adding official gold to its reserves.
(courtesy Nikkei Asian Review/GATA)

iv)Chris Marcus is interviewing me:

(courtesy Chris Marcus)

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

 

 

 

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

 

II)MARKET TRADING/USA

 

 

ii)Market data/USA

 

iii)USA ECONOMIC/GENERAL STORIES

a) Let us see if Michael Every is right as Powell might have to explain why he is cutting rates just like Draghi is scheduled to do.

( Michael Every/Rabobank)

b)Illinois farming is now in a mess as farmers have given up on planting corn

( Mac Slavo/SHFTPlan.com)

c)Interesting:  25% of Americans are now :”worse off” than they were before the great recession. Kind of kills the Trump narrative that the economy is booming

( Mac Slavo)

 

d).My goodness:  they finally agree on something…a deal on Trump  border funding

( zerohedge)

e)Another headache for Boeing:  the crank is too hard for pilots to pull.(zerohedge)

f)Seems that Tucker Carlson has the President’s ear on Iran.  I myself believe it is not necessary to attack Iran now..they are bleeding internally for quite some time.  Thus more sanctions will hurt them in the pocketbook

( zerohedge)

SWAMP STORIES

A democrat Congressman states that Mueller will testify.  I extremely doubt it. It will be far worse for the democrats.

(zerohedge)

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT
end
LET US BEGIN:

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A FAIR SIZED 2295 CONTRACTS TO A LEVEL OF 525,636 WITH THE GOOD RISE OF $7.60 IN GOLD PRICING WITH RESPECT TO YESTERDAY’S // COMEX TRADING)

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JUNE..  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 8495 EFP CONTRACTS WERE ISSUED:

0 FOR JUNE ’19: 0 CONTRACTS , AUG; 8495 CONTRACTS: DEC: 0   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  8495 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 OUR 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: 10,790 TOTAL CONTRACTS IN THAT 8495 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A FAIR SIZED 2295 COMEX CONTRACTS.  THE BANKERS SUPPLIED THE NECESSARY SHORT PAPER IN GOLD TO CONTAIN THE PRICE RISE. 

 

NET GAIN ON THE TWO EXCHANGES ::  10,790 CONTRACTS OR 1,079,000 OZ OR 33.56 TONNES.

 

We are now in the  active contract month of JUNE and here the open interest stands at 195 CONTRACTS as we LOST 274 contracts.  We had  301 notices filed yesterday so we gained 27 contracts or AN ADDITIONAL 2700 oz of gold that will stand for delivery as there appears to be some gold at the comex  so they will now try their luck on finding the fast vanishing supplies of physical gold over here.  The next contract month is the non active month of July and here the OI fell by 51 contracts down to 1287 contracts.  The next big active month for deliverable gold is August and here the OI FELL by a TINY 44 contracts DOWN to 387,852.

 

 

 

 

 

TODAY’S NOTICES FILED:

WE HAD 19 NOTICES FILED TODAY AT THE COMEX FOR  1,900 OZ. (0.3701 TONNES)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total COMEX silver OI ROSE BY A HUMONGOUS SIZED 6469 CONTRACTS FROM 232,997 UP TO 239,466 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018 AT 244,196 CONTRACTS.   AND TODAY’S STRONG  OI COMEX GAIN OCCURRED WITH A 18 CENT GAIN IN PRICING.//YESTERDAY.

 

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JUNE.  HERE WE HAVE 71 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 133 CONTRACTS.  WE HAD 40 NOTICES FILED YESTERDAY SO WE LOST 93 CONTRACTS OR AN ADDITIONAL 465,000 OZ OF SILVER WILL NOT STAND AT THE COMEX…. AND THESE GUYS MORPH INTO A LONDON BASED FORWARD AS WELL AS ACCEPTING A FIAT BONUS FOR THEIR EXHAUSTIVE EFFORT IN TRYING TO OBTAIN METAL..THERE WAS A BIG CHANGE FROM THE PRELIMINARY TO FINAL NUMBERS FOR THE FRONT JUNE CONTRACT MONTH.  ORIGINALLY WE HAD GAINED 75 CONTRACTS STANDING AND NOW WE LOST 93 CONTRACTS.  SILVER MUST BE EXTREMELY SCARCE AT THE COMEX.!!!!!!

 

 

THE NEXT MONTH AFTER JUNE IS THE ACTIVE MONTH OF JULY.  HERE THE OI FELL BY 3924 CONTRACTS DOWN TO 117,913.  WE GAINED 18 CONTRACTS OF OI FOR AUGUST TO STAND AT 840. THE NEXT BIG ACTIVE DELIVERY MONTH AFTER AUGUST IS SEPT AND HERE THE OI ROSE BY 9499 CONTRACTS UP TO 74,078 CONTRACTS.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 38 notice(s) filed for 190,000 OZ for the JUNE, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 207,061  CONTRACTS 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  388,922  contracts

 

 

 

 

 

INITIAL standings for  JUNE/GOLD

June 19/2019

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

nil

 

Deposits to the Customer Inventory, in oz  

nil

 

No of oz served (contracts) today
19 notice(s)
 1,900 OZ
(0.0590 TONNES)
No of oz to be served (notices)
176 contracts
(17600 oz)
0.5474 TONNES
Total monthly oz gold served (contracts) so far this month
2133 notices
213300 OZ
6.6345 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 entry:

We had 0 kilobar entries

 

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into Everybody else: nil  oz

 

 

 

total gold deposits: nil  oz

 

 very little gold arrives from outside/ no amount  arrived   today

we had 1 gold withdrawal from the customer account:

i) Out of Delaware: 295.584 oz

 

 

 

total gold withdrawals; 295.584 oz   oz

 

 

i) we had 0 adjustment today

FOR THE JUNE 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 19 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 8 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JUNE /2019. contract month, we take the total number of notices filed so far for the month (2133) x 100 oz , to which we add the difference between the open interest for the front month of  JUNE. (195 contract) minus the number of notices served upon today (19 x 100 oz per contract) equals 230,900 OZ OR 7.182 TONNES) the number of ounces standing in this active month of JUNE

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

No of notices served (2133 x 100 oz)  + (195)OI for the front month minus the number of notices served upon today (19 x 100 oz )which equals 230,900 oz standing OR 7.182 TONNES in this  active delivery month of JUNE.

We GAINED 27  contracts or an additional 2700 oz will stand as these guys refused to morph into London based forwards as well as negating a fiat bonus. Somebody was in need of physical gold badly.!!

 

 

 

 

 

SURPRISINGLY LITTLE TO NO  GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 10.08 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 7.182 TONNES OF GOLD STANDING// THEY SEEM TO BE USING CONSIDERABLE GOLD VAPOUR TO SETTLE UPON UNSUSPECTING LONGS.

 

 

 

 

total registered or dealer gold:  324,118.255 oz or  10.08 tonnes (we again had a huge adjustment yesterday of gold leaving the customer and entering the dealer//this is nothing but gold vapour)
total registered and eligible (customer) gold;   7,675,379.508 oz 238.42 tonnes

 

 

 

OF OPEN INTERESTS FOR THE UPCOMING JUNE 2019 CONTRACT VS JUNE 2018

 

 

 

 

 

FOR THE INITIAL JUNE 2018 CONTRACT WE HAD A HUGE 32.152 TONNES STAND. (VS 7.182 TONNES TODAY/JUNE 2019)

HOWEVER BY MONTH’S END ONLY 21.56 TONNES EVENTUALLY STOOD AS THE REST MORPHED INTO LONDON BASED FORWARDS.  AS YOU CAN SEE, THE CROOKS ARE FOLLOWING THE SAME FORMAT OF MORPHING VS LAST YEAR AS ONLY GOLD VAPOUR SEEMS TO BE PHYSICALLY PRESENT AT THE COMEX AND LONGS MUST TRY THEIR LUCK IN LONDON.

IN THE LAST 33 MONTHS 118 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 June

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
june 19 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 684,770.117 oz
Brinks
CNT
Loomis

 

 

Deposits to the Dealer Inventory
NIL oz

 

Deposits to the Customer Inventory
1,131,756.050 oz
JPM
CNT
No of oz served today (contracts)
38
CONTRACT(S)
(190,000 OZ)
No of oz to be served (notices)
33 contracts
165,000 oz)
Total monthly oz silver served (contracts) 391 contracts

1,955,000 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  2 deposits into the customer account

into JPMorgan:  533,517.550  oz

ii)into CNT: 533,517.550 oz

 

 

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

JPMorgan now has 152.90 million oz of  total silver inventory or 50.29% of all official comex silver. (152.9 million/304.04 million

 

 

 

 

total customer deposits today:  1,131,756.050  oz

 

we had 3 withdrawals out of the customer account:

 

i) out of  brinks:  6942.410 oz

ii) Out of CNT  597,810.107 oz

iii) Out of Loomis:  80,017.600 oz

 

 

 

 

 

 

total 684,770.117  oz

 

we had 0 adjustments :

 

 

 

total dealer silver:  87.119 million

total dealer + customer silver:  304.040 million oz

 

The total number of notices filed today for the JUNE 2019. contract month is represented by 38 contract(s) FOR  190,000 oz

To calculate the number of silver ounces that will stand for delivery in JUNE, we take the total number of notices filed for the month so far at 391 x 5,000 oz = 1,955,000 oz to which we add the difference between the open interest for the front month of JUNE. (71) and the number of notices served upon today (38 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JUNE/2019 contract month: 391(notices served so far)x 5000 oz + OI for front month of JUNE( 71) -number of notices served upon today (38)x 5000 oz equals 2,120,000 oz of silver standing for the JN contract month.

WE LOST 93 CONTRACTS OR AN ADDITIONAL 465,000 OZ WILL STAND AT THE COMEX AS THESE GUYS MORPHED INTO A LONDON BASED FORWARDS AND AS WELL THEY ALSO ACCEPTING A FIAT BONUS. THIS IS THE FIRST TIME EVER THAT I CAN RECALL SEEING A MASSIVE CHANGE IN THE FRONT MONTH PRELIMINARY OI NUMBER TO THE FINAL NUMBER. IT MEANS THAT THE GUYS STANDING FOR METAL ON THIS SIDE OF THE POND JUST GAVE UP AND THEY WILL TRY THEIR LUCK OVER IN LONDON.. 

 

 

 

 

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 38 notice(s) filed for 190,000 OZfor the JUNE, 2019 COMEX contract for silver

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  85,123 CONTRACTS (we had considerable spreading activity..accumulation

 

CONFIRMED VOLUME FOR YESTERDAY: 132,072 CONTRACTS..(we no doubt had considerable spreading activity as they are now starting to accumulate in silver)

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 132,072 CONTRACTS EQUATES to 660 million  OZ 94.2% 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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

 

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -1.77% (June 19/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -1.97% to NAV (june 19/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -1.77%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.43 TRADING 12.80/DISCOUNT 4.69

END

And now the Gold inventory at the GLD/

JUNE 19 WITH GOLD DOWN $1.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.10 TONES

JUNE 18/JUNE 18/WITH GOLD UP $7.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.10 TONNES

JUNE 17/WITH GOLD DOWN $1.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 764.10 TONNES

JUNE 14/ WITH GOLD UP $1.05 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 4.40 TONNES OF PAPER GOLD INTO THE GLD///INVENTORY RESTS AT 764.10 TONNES

june 13/WITH GOLD UP $6.60 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.52 TONNES INTO THE GLD INVENTORY/INVENTORY RESTS AT 759.70 TONNES

JUNE 12/WITH GOLD UP $7.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 756.18 TONNES

JUNE 11/WITH GOLD UP $1.65 CENTS TODAY: A TINY CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .24 TONNES AND THIS IS TO PAY FOR FEES/INVENTORY RESTS AT 756.18 TONNES

JUNE 10/WITH GOLD DOWN $16.40 TODAY: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.17 TONNES/INVENTORY RESTS AT 756.42 TONNES

june 7/WITH GOLD UP $3.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.59 TONNES

jUNE 6/WITH GOLD UP  $8.40 TODAY/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.59 TONNES

JUNE 5 WITH GOLD UP $6.00 TODAY/STRANGE: A WITHDRAWAL OF 2.06 TONNES FROM THE GLD/INVENTORY RESTS AT 757.59 TONNES

JUNE 4/WITH GOLD UP 0.85 TODAY: A MONSTROUS PAPER GAIN OF 16.44 TONNES/GLD INVENTORY RESTS AT 759.65 TONNES

JUNE 3/WITH GOLD UP $17.50 TODAY: ANOTHER BIG CHANGE, A DEPOSIT OF 2.35 TONNES OF GOLD INTO THE GLD//

MAY 31/WITH GOLD UP $17.10 TODAY: NO CHANGES  IN GOLD INVENTORY AT THE GLD/GLD INVENTORY RESTS AT 740.86 TONNES

MAY 30: WI6H GOLD UP $6.40 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.52 TONNES/INVENTORY RESTS AT 740.86 TONNES

MAY 29/WITH GOLD UP $3.90 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 737.34 TONNES

MAY 28/WITH GOLD DOWN $6.50 TODAY: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD> A WITHDRAWAL OF 1.47 TONNES/INVENTORY RESTS AT 737.34 TONNES

MAY 24/WITH GOLD DOWN $1.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 738.81 TONNES

MAY 23/WITH GOLD UP $11.10 TODAY: A STRANGE WITHDRAWAL OF .88 TONNES FORM THE GLD/INVENTORY RESTS AT 738,81 TONNES

MAY 22//WITH GOLD FLAT TODAY: WE HAD A GOOD 1.52 TONNES OF GOLD DEPOSIT INTO THE GLD/INVENTORY RESTS TONIGHT AT 739.69 TONNES

 

MAY 21/WITH GOLD DOWN $3.65 TODAY: A SURPRISE 2.00 TONNES WERE ADDED  TO THE GLD GOLD INVENTORY//INVENTORY RESTS AT 738.17 TONNES

MAY 20/WITH GOLD UP $1.00 A HUGE 2.96 TONNE DEPOSIT INTO THE GLD//INVENTORY RESTS AT 736.17 TONNES

MAY 17/WITH GOLD DOWN $9.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 733.23 TONNES

MAY 16/WITH GOLD DOWN $11.50: A WITHDRAWAL OF 3.23 TONNES FROM THE GLD//INVENTORY RESTS AT 733.23 TONNES

MAY 15/WITH GOLD UP $1.50 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 736.46 TONNES

MAY 14//WITH GOLD DOWN $5.45 TODAY: STRANGE!! THE CROOKS DECIDED TO DEPOSIT A HUGE 3.23 TONNES INTO THE GLD INVENTORY//INVENTORY RESTS AT 736.46 TONNES

MAY 13/ WITH GOLD UP ANOTHER $15.40 TODAY: STRANGE! A MASSIVE WITHDRAWAL OF 6.41 TONNES OF GOLD (TO TAME GOLD’S RISE TODAY)/INVENTORY RESTS AT 733.23 TONNES

MAY 10 WITH GOLD UP $2.15 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 9//WITH GOLD UP $4.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 8/WITH GOLD DOWN $3.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 739.64 TONNES

MAY 7/ WITH GOLD UP $1.80: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 6/WITH GOLD UP $2.35: ANOTHER WITHDRAWAL OF 5.88 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 3/WITH GOLD UP $9.35 TODAY: A WITHDRAWAL  OF 1.17 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 745.52

MAY 2/WITH GOLD DOWN $12.30 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JUNE 19/2019/ Inventory rests tonight at 764.10 tonnes

*IN LAST 613 TRADING DAYS: 169.66 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 513 TRADING DAYS: A NET 4.03TONNES HAVE NOW BEEN REMOVED FROM THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JUNE 19/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 319.070 MILLION OZ/

JUNE 18 WITH SILVER UP 18 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 319.070 MILLION OZ/

JUNE 17/WITH SILVER UP 1 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ//

JUNE 14/WITH SILVER DOWN 9  CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 13/WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 12/WITH SILVER UP 4 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.413 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 11/WITH SILVER UP 10 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 315.652 MILLION OZ//

JUNE 10/WITH SILVER DOWN 38 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.652 MILLION OZ//

june 7/WITH SILVER UP ANOTHER 12 CENTS, NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.652 MILLION OZ//

jUNE 6/WITH SILVER UP ANOTHER 9 CENTS TODAY: A FAIR SIZE DEPOSIT OF 630,087 OZ//INVENTORY RESTS AT 315.652 MILLION OZ//

JUNE 5/WITH SILVER UP 4 CENTS TODAY: A HUGE PAPER DEPOSIT OF 2.396 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 314.434 MILLION OZ//

JUNE 4/WITH SILVER UP 1 CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.038 MILLION OZ//

JUNE 3/WITH SILVER UP 19 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.038 MILLION OZ//

MAY 31/WITH SILVER UP 6 CENTS TODAY: A DEPOSIT OF 422,000 OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 312.038 MILLION OZ/

May 30/WITH SILVER UP 19 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ///

MAY 29/WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 28/WITH SILVER DOWN 23 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 24/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ/

MAY 23/WITH SILVER UP 16 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 22/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 311.616 MILLION OZ

MAY 21: WITH SILVER DOWN 3 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV; A WITHDRAWAL OF 750,000 OZ///INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 20/WITH SILVER UP 6 CENTS:NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.366 MILLION OZ

MAY 17/WITH SILVER DOWN 13 CENTS TODAY: A BIG CHANGES IN SLV: A WITHDRAWAL OF 3.185 MILLION OZ FROM THE SLV INVENTORY VAULTS:/INVENTORY RESTS AT 312.366 MILLION OZ//

MAY 16/WITH SILVER DOWN 26 CENTS: NO CHANGES IN THE SLV INVENTORY//INVENTORY RESTS AT 315.551 MILLION OZ//

MAY 15/WITH SILVER UP 2 CENTS TODAY: A BIG CHANGE IN SLV  INVENTORY: A WITHDRAWAL OF 1.031 MILLION OZ//  THE SLV/INVENTORY RESTS AT 315.551 MILLION OZ.

MAY 14/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV. INVENTORY RESTS AT 316.582 MILLION OZ/

MAY 13//WITH SILVE5 DOWN 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ…

MAY 10/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 316.582 MILLION OZ///

MAY 9/WITH SILVER DOWN 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 316.582 MILLION OZ//

MAY 8/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ///

MAY 7/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ//

MAY 6/WITH SILVER DOWN 3 CENTS WE HAD ANOTHER DEPOSIT OF 891,000 OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ/

MAY 3//WITH SILVER UP 34 CENTS TODAY: A DEPOSIT OF 843,000 OZ INTO THE SLV/TOTAL INVENTORY RESTS AT 315.691 MILLION OZ//

MAY 2/WITH SILVER DOWN ANOTHER 13 CENTS, MIRACUOUSLY THE AUTHORITIES ADD 2.869 MILLION OZ OF SILVER BACK INTO THE SLV/INVENTORY RESTS AT 314.848 MILLION OZ//

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

 

 

JUNE 19/2019:

 

Inventory 319.070 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 2.09/ and libor 6 month duration 2.30

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

G0LD LENDING RATE: + .21

 

XXXXXXXX

12 Month MM GOFO
+ 2.06%

LIBOR FOR 12 MONTH DURATION: 2.26

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.20

end

 

PHYSICAL GOLD/SILVER STORIES

 

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Rises In All Currencies – Gains 1.6% To £1,079/oz In GBP, Near 7 Year High

GoldCore Note
Gold prices have risen in all currencies today and especially in British pounds with gold having risen 1.5% to £1,078/oz. Concerns regarding the weak UK economy and Brexit fears continue to weigh on sterling.

Gold in GBP – 1 Day

More loose monetary policies are making gold attractive again as are the elevated economic and geopolitical risks which are leading to safe haven demand.

Gold has gained more than 6%, since touching a 2019 low of $1,265.85 in early May, due to these risks.

Gold had seen its usual Monday sell off as futures market participants took profits and pushed prices lower again.

The U.S. central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year which will support gold.

Expectations of interest rate cuts in the U.S. have increased amid the deepening U.S.-China trade war and signs that the U.S. economy is slowing significantly.

LBMA Gold Prices (USD, GBP & EUR – AM/ PM Fix)

17-Jun-19 1333.20 1341.30, 1059.49 1065.13 & 1188.81 1193.09
14-Jun-19 1352.45 1351.25, 1069.79 1070.33 & 1200.03 1201.80
13-Jun-19 1335.80 1335.90, 1054.21 1052.69 & 1182.85 1184.81
12-Jun-19 1336.65 1332.35, 1049.27 1045.76 & 1179.99 1177.26
11-Jun-19 1322.65 1324.30, 1040.53 1041.30 & 1168.96 1170.42
10-Jun-19 1328.60 1328.60, 1046.94 1048.66 & 1175.41 1175.94
07-Jun-19 1334.30 1340.65, 1049.16 1052.14 & 1184.19 1184.60
06-Jun-19 1336.65 1335.50, 1053.15 1051.17 & 1189.62 1185.92
05-Jun-19 1337.75 1335.05, 1052.01 1049.22 & 1185.38 1184.99
04-Jun-19 1323.60 1324.25, 1045.51 1043.77 & 1177.47 1177.26

News and Commentary
Gold Rises as Dollar Weakens Ahead of U.S. Fed Meeting

China to Roll Out New Rare Earths Policy ‘as Soon as Possible’

ECB Will Provide More Stimulus if Inflation Doesn’t Pick Up: Draghi 

Dollar Heads Towards Three-month Lows Before Fed Meeting; Draghi Eyed

Oil Prices Slip for Second Day on Global Growth Worries

Watch video here

Deutsche Bank To Launch €50 Billion “Bad Bank” Housing Billions In Toxic Derivatives

“We Will Fight Until The End”: Beijing Warns Washington Will Lose “Protracted” Trade War

Government Needs to Cut Spending Now – but It Will Not

Strange Gold and Silver Trading – From Violent to Comatose

Swiss Refiner Metalor to Stop Processing Artisanal Gold

Exclusive Offer Ends Fri June 21. Gold & Silver (CGT Free in the UK) Stored In Zurich

 

Mark O’Byrne
Executive Director

end

Gold Surges To All Time Record Highs At $1,974/oz In Australian Dollars

19, June

GoldCore Note
Gold is lower in dollars today despite increasingly dovish signals from the Federal Reserve, ECB, Australian central bank and other central banks as economies slow.

Gold has surged higher in Australian dollars again this week and reached a new all time record high in the Aussie dollar yesterday at $1,974/oz. This is due to concerns about the Australian economy, the likelihood of interest rate cuts Down Under and the negative outlook for the Australian dollar.

Gold remains just off 14-month highs at $1,344.90 per ounce due to the likelihood that central banks will again loosen monetary policy because of the very uncertain geopolitical and economic outlook – particularly regarding global trade.

Stock markets globally remain near two- week highs today and have again been lulled into a false sense of security as speculators bet on a wave of central bank stimulus globally. There are increasing signs that there may be interest rate cuts as early as July in the slowing United States and the euro monetary zone.

Risk assets remain ‘irrationally exuberant’ partly due to President Mario Draghi’s significant ‘about turn’ on monetary policy easing. In one of the biggest policy reversals of his 8 year tenure, Draghi said the ECB would ease again if inflation fails to increase.

Central bankers desire for inflation is very bullish for gold. There has already been massive inflation seen in asset markets and particularly the price of stocks, bonds and of course property. The risk is that the ‘inflation genie may get out of the bottle’ and as economies slow, this creates the real risk of stagflation.

Interestingly, there has been a noticeable increase in new clients from Australia in recent days and a pick up in demand for storage from existing clients. We have a smattering of Australian clients and take payment in Australian dollars. They own bullion coin and bar assets stored with us in Secure Storage in Zurich, Hong Kong and Singapore.

We believe the all time record high of gold in Aussie dollars yesterday (nominal high and not inflation adjusted) will be seen in other currencies in the coming months.

-END-

GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.

Bill Murphy explains the significance of $1350 gold

(courtesy Bill Murphy/GATA/Reluctant Preppers)

Obviousness of gold smashes signifies desperation, GATA chairman says

 Section: 

11p ET Tuesday, June 18, 2019

Dear Friend of GATA and Gold:

Smashes of the gold price when it approaches $1,350 have become so obvious as to signal that the gold cartel is desperate to defeat demand for the monetary metal, GATA Chairman Bill Murphy tells Dunagin Kaiser of Reluctant Preppers today. Murphy also answers questions from the Reluctant Preppers audience. The interview is 27 minutes long and can be viewed at YouTube here:

https://www.youtube.com/watch?v=1B5qCWEUEdQ&feature=youtu.be

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

END

GOOD NEWS!! Robert Labourne our resident expert on BIS affairs reports a huge decline in gold activity via gold swaps. I guess the reason is the lack of gold.

(courtesy Robert Lambourne/GATA)

Robert Lambourne: BIS’ activity in gold market continues to diminish

 Section: 

By Robert Lambourne
Tuesday, June 18, 2019

The statement of account for May 2019 of the Bank for International Settlements, published this week, indicates that the bank is still trading gold swaps, which the bank uses to gain access to gold held by commercial banks. But the statement indicates that bank’s recent activity in the gold market is much reduced from its activity during the second half of 2018.

There is not enough information in the monthly reports to calculate the exact amount of swaps, but based on the information in the bank’s just-published statement of account, the bank’s gold swaps are estimated to be 78 tonnes as of May 31, compared to 88 tonnes at April 30, 177 tonnes at March 31, 303 tonnes at February 28, 247 tonnes at January 31, 2019, 275 tonnes at December 31, 2018, and 308 tonnes in November, 372 tonnes in October, 238 tonnes in September, and 370 tonnes in August 2018.

More background on the bank’s medium-term history of using gold swaps is available here:http://www.gata.org/node/18825

On February 3 this year GATA published comments from a former gold industry executive describing the activities of the BIS in gold swaps in earlier decades:

http://www.gata.org/node/18828

The former executive wrote: “Effectively this process created a supply of ‘paper gold’ — sometimes but not always marked to market — that had a depressing effect on the gold price.”

The BIS refuses to explain its activity in the gold market — its objectives and underlying parties in interest —

http://www.gata.org/node/17793

— and mainstream financial news organizations refuse to ask about it.

—–

Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

END
Nikkei Asian news reports what we have been reporting:  China is reducing its USA dollar stockpile and adding official gold to its reserves.
(courtesy Nikkei Asian Review/GATA)

China stockpiles gold while letting U.S. bond holdings slide

 Section: 

By Yusho Cho
Nikkei Asian Review, Toyko
Wednesday, June 19, 2019

SHANGHAI — China reduced its holdings of U.S. government debt again in April even as Beijing’s gold reserves continued to grow, diversifying away from the dollar as ties with Washington fray.

The $7.5 billion dip on the month brought China’s total Treasury stockpile to $1.11 trillion, down $90 billion from the most recent peak in August 2017. This follows a roughly $10 billion decline in March.

… 

The downtrend in recent months parallels the escalation of the trade war between Beijing and Washington, even as the latest data precedes the breakdown in talks last month that led to another round of tariffs. A shrinking current-account surplus has left China with less wherewithal to buy Treasurys, and Beijing appears to have decided that overextending itself to do so is unnecessary given the souring bilateral relationship.

But few other options are available for stashing large amounts of capital, and selling off U.S. government debt too quickly would risk further antagonizing Washington. Such a move also would drive up long-term yields, reducing the value of China’s remaining holdings.

Rather than dumping Treasurys as a way to gain leverage in trade negotiations, Beijing seems to be taking a subtler approach through trimming its holdings by $20 billion or less per month.

Some of this capital is going into gold. China’s gold reserves have grown for six straight months since December, the first time the country increased its holdings of the precious metal in more than two years. Russia has made similar moves, slashing its dollar-denominated assets while purchasing gold as essentially a borderless currency. …

… For the remainder of the report:

https://asia.nikkei.com/Economy/Trade-war/China-stockpiles-gold-while-le…

* * *

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
GOLD//SILVER TRADING TODAY:

 

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/7 AM EST

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 6.9043/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  6.9068   /shanghai bourse CLOSED UP 27.65 POINTS OR 0.96%

HANG SANG CLOSED UP 703.37 POINTS OR 2.56%

 

2. Nikkei closed UP 361.16 POINTS OR 1.72%

 

 

 

 

3. Europe stocks OPENED ALL MIXED/

 

 

 

USA dollar index UP TO 97.55/Euro RISES TO 1.1206

3b Japan 10 year bond yield: FALLS TO. –.14/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.68/ 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:: 53.83 and Brent: 61.72

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 UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO -.29%/Italian 10 yr bond yield DOWN to 2.10% /SPAIN 10 YR BOND YIELD UP TO 0.41%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.39: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.48

3k Gold at $1342.85 silver at: 14.93   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 5/100 in roubles/dollar) 64.00

3m oil into the 53 dollar handle for WTI and 61 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 108.40 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 .9973 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1175 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 0.29%

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 2.08% early this morning. Thirty year rate at 2.56%

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

6.  TURKISH LIRA:  UP  TO 5.8648..

 

Global Markets Drift Amid Concerns The Fed May Disappoint

After yesterday’s torrid, euphoric surge on the back of Draghi’s dovish deluge and Trump’s announcement of a G-20 meeting with Xi, world stocks were rather muted, holding near two-week highs on Wednesday, and in the case of the S&P500 just shy of all time highs as investors bet on a worldwide wave of central bank stimulus…

 

… amid growing expectations that the United States and the euro zone may deliver interest rate cuts as early as July.

Which of course has put Powell in a very difficult position: with Trump demanding by the day, if not hour, that the Fed cur rates, just how does the Fed Chair pull it off without looking political when since the March FOMC meeting: i) stock prices are higher; ii) the unemployment rate fell to a 50-year low; iii) growth forecasts have improved; iv) the tariffs on Mexico that prompted the latest calls for rate cuts have been taken off the table. We’ll find out in just over 6 hours.

 

Meanwhile, Draghi already capitulated “pre-emptively” on Tuesday, frontrunning the Fed, when in one of the biggest policy reversals of his eight-year tenure, Draghi flagged more easing if inflation failed to pick up, firing up markets and resulting in one of the biggest one-day moves in global stocks of 2019.

But, as Reuters notes, some caution seeped in after the previous day’s frenzy. German and U.S. bond yields, which hit record lows and two-year lows respectively after Draghi’s comments, inched higher to trade just off those levels.

European shares slipped off six-week highs in early trading (although they have since rebounded) and Wall Street futures indicated a slightly weaker opening on Wednesday. Most of the concern is down to the U.S. Federal Reserve’s meeting, the decision of which is due at 1800 GMT. It is widely expected to follow the lead of the European Central Bank and open the door to future rate cuts.

“It should be really clear to absolutely everyone that this is a monetary policy turning point … Those rate cut expectations have now shifted much closer,” said Ulrich Leuchtmann, head of currency and emerging markets research at Commerzbank, quoted by Reuters.  “Of course the other question is: What is the Fed doing? If the Fed takes the fundamental risk of political pressure seriously, they cannot do anything today,” he said, noting that Trump’s strident calls for lower interest rates posed a dilemma for the Fed.

Meanwhile, futures are almost fully priced for a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas. As for Europe, markets have almost fully priced a cut in September, though some analysts, such as those at Germany’s Commerzbank, now say rates will be cut in July, rather than in the last quarter of the year as they had predicted earlier.

 

The risk is that for all the clamor for easing creates risks that policymakers will disappoint.

“Market expectations for a dovish shift are nearly universal, the only question seems to be the degree,” said Blake Gwinn, head of front-end rates at NatWest Markets, referring to the Fed. “Markets will be looking for validation of this pricing. We think this represents a fairly high bar for the Fed to deliver a dovish surprise.”

It wasn’t just central banks though: Bullish market sentiment was reinforced by news that Trump will meet Chinese leader Xi Jinping at the G20 summit this month, even though many doubt the two men can reach a breakthrough on ending their trade dispute.

MSCI’s global equity index rose 0.4%, adding to Tuesday’s 1% gain, as Asian shares excluding Japan followed the lead of their European and U.S. counterparts to jump almost 2% — their biggest one-day rally since January as investors bet on a possible easing of U.S.-China trade tensions. Technology shares led the rally after President Donald Trump said he would meet Chinese counterpart Xi Jinping at the G-20 summit next week. All markets in the region were up, with Hong Kong and Taiwan leading gains, while Australian stocks hit an 11-year high. The Topix gauge climbed 1.7%, as Keyence and SoftBank provided the biggest boosts. Construction stocks rose after a magnitude 6.7 earthquake struck off the northwest coast of Japan.

Over in China, the Shanghai Composite Index closed 1% higher, as brokerage shares jumped on a media report that China encouraged banks to boost liquidity support for securities firms. The S&P BSE Sensex Index fluctuated, with Kotak Mahindra Bank rising and Mahindra & Mahindra declining. India’s second-biggest life insurer said it was time to take money out of the nation’s equities.

In rates, the yield on 10-year Treasuries pared some of the drop from a day earlier, after reaching the lowest level since September 2017 at 2.016%, a world away from the 3.25% top touched in November last year. The yield rose slightly from those lows but is down some 60 bps since January, while that of Japan’s benchmark sank to the lowest since August 2016 at -0.145%. German yields were close to the minus 0.33% record low hit on Tuesday, while Japanese yields

The fallout in currencies has been significantly less, mostly because it is hard for one to gain when all the major central banks are under pressure to ease. The euro did pull back after Draghi’s comments, but at $1.118 it touched only a two-week low. The dollar eased slightly on the yen to 108.3, but was flat versus a basket of currencies. The yuan touched three-week highs versus the dollar on the trade news. The pound gained for a second day.

In commodities, the rate-cut buzz kept gold just off 14-month highs at $1,345.16 per ounce. Brent crude futures however slipped 0.6% to $61.75 a barrel, pressured by economic growth worries.

Expected data include mortgage applications. Oracle and Steelcase are reporting earnings

Market Snapshot

  • S&P 500 futures little changed at 2,924.50
  • STOXX Europe 600 little changed at 384.68
  • MXAP up 1.8% to 157.98
  • MXAPJ up 1.8% to 518.37
  • Nikkei up 1.7% to 21,333.87
  • Topix up 1.7% to 1,555.27
  • Hang Seng Index up 2.6% to 28,202.14
  • Shanghai Composite up 1% to 2,917.80
  • Sensex up 0.1% to 39,086.68
  • Australia S&P/ASX 200 up 1.2% to 6,648.13
  • Kospi up 1.2% to 2,124.78
  • German 10Y yield rose 2.2 bps to -0.298%
  • Euro up 0.09% to $1.1204
  • Italian 10Y yield fell 18.0 bps to 1.753%
  • Spanish 10Y yield rose 4.2 bps to 0.435%
  • Brent futures down 0.5% to $61.82/bbl
  • Gold spot down 0.3% to $1,342.61
  • U.S. Dollar Index little changed at 97.60

Top Headline News from Bloomberg

  • Facing pressure from Wall Street and President Trump, Fed Chairman Powell and his colleagues may be running out of patience
  • President Trump said he had a “very good” phone conversation with Chinese counterpart Xi. The two will hold an extended meeting at the G-20 summit on June 28-29, Trump said on Twitter
  • Boris Johnson extended his lead over his rivals in the race to become Britain’s next prime minister and looked poised to pick up more votes as the hardest Brexiteer in the contest was eliminated
  • Trump administration is weighing three sanctions packages to punish Turkey for its purchases of the Russian S-400 missile-defense system, according to people familiar
  • Japan’s exports fell for a sixth month as U.S.-China trade tensions add to concerns about global demand and economic growth
  • President Trump asked White House lawyers earlier this year to explore his options forremoving Jerome Powell as Fed chairman, according to people familiar
  • Trump officially announced his campaign for re-election, delivering a speech thick with grievance in which he warned of a dark future for America if his opponents win in 2020
  • An OPEC committee sees global oil inventories contracting by almost 500,000 barrels a day if the group continues restraining supply in the second half of the year, a delegate said
  • China is stepping up efforts to avert a funding squeeze among the nation’s banks and securities companies after a rare government seizure of a small lender triggered concerns about a vital part of the nation’s financial plumbing.
  • Wednesday’s Federal Reserve rate decision carries more wild cards than most. While market participants don’t expect a rate cut this time around, they do see lower rates this year
  • The Trump administration is weighing three sanctions packages to punish Turkey over its purchases of the Russian S-400 missile- defense system, according to people familiar with the matter. The most severe package under discussion between officials would all but cripple the already troubled Turkish economy

Asian equity markets rallied across the board as the region followed suit from the heightened global risk appetite due to a double dosage of optimism from ECB President Draghi’s hints of potential easing and after US President Trump confirmed a meeting with his Chinese counterpart at the G20. ASX 200 (+1.2%) and Nikkei 225 (+1.8%) were higher with Australia led by energy names after a surge in oil prices and with outperformance also seen in the trade sensitive industries such as tech, materials and miners, while the Japanese benchmark gapped above the 21K level fuelled by favourable currency flows and strength in commodity-related sectors. Hang Seng (+2.5%) and Shanghai Comp. (+1.0%) were buoyed after US President Trump announced the resumption of US-China trade talks and that he will be conducting an extended meeting with Chinese President Xi at the G20 following “a very good” telephone conversation between the 2 leaders, while the PBoC were also supportive with the announcement of liquidity injections through reverse repos and its medium-term lending facility. Finally, 10yr JGBs were higher after the dovish comments from ECB’s Draghi added to the declining global yields narrative which saw a drop in 10yr JGB yields to their lowest since August 2016, while the BoJ also kick starts its 2-day policy meeting where they are expected to maintain current policy settings and reaffirm guidance of keeping rates at very low interest rate levels for an extended period of time at least through around Spring 2020.

Top Asian News

  • Agung Jumps as Jakarta Issues Permit for Reclamation Projects
  • Nomura Jumps on $1.4b Buyback, Governance Tweaks
  • Boutique Firm Led by Ex-UBS Banker Said to Bid for Abraaj Funds
  • KKR Is Said to Near Partial Exit From $2b Helicopter Firm

European equities are tentative [Eurostoxx 50 Unch] as the region gears up for the FOMC rate decision later today (Full preview available in the Research Suite). Sectors are mixed, underperformance is seen in defensive stocks with healthcare, utilities and consumer staples all lower. In terms of movers, STMicroelectronics (+3.2%) and Infineon (+2.7%) shares gained following a broker move at Morgan Stanley and Bernstein respectively. On the flip side, Steinhoff (-6.5%) opened at the foot of the Stoxx 600 after the Co.’s delayed 2018 results posted losses, whilst Belgian retailer Colruyt (-12.2%) plunged on disappointing earnings.

Top European News

  • Airline Shares Fall as HSBC Sees More Profit Warnings Ahead
  • Piraeus Tests Risk-Hungry Market With CCC Rated Greek Bank Debt
  • U.K. Inflation Returns to BOE Target on Air Fares, Car Prices
  • German Property Stocks Fall on Fears of Rent Regulation Ahead

In FX, relatively tight lines are being drawn ahead of the FOMC in G10 land, as is often the case, but the Greenback has clawed back some losses against EMs after Tuesday’s euphoria over the US and China reopening lines of communication on the trade front. However, the index is braced for the Fed within a confined 97.683-553 range, and seemingly reluctant to breach chart/psychological resistance or support around 97.639 (61.8% Fib retracement of pull-back from 98.373 ytd peak to recent 96.451 low) and 97.500 respectively in the run up – see the Ransquawk Research Suite for a full preview.

  • GBP/CHF – Bucking the overall muted trend, Cable has continued its recovery towards 1.2600 after broadly in line with forecast UK CPI and PPI data and ahead of the BoE tomorrow, while Eur/Gbp has also retraced further to test 0.8900 compared to circa 0.8975 before ECB President Draghi’s apparent dovish Sintra revelations. Similarly, the Franc is consolidating back above parity and over 1.1200 vs the single currency as markets tread more cautiously in wake of yesterday’s risk-on session.
  • EUR/JPY/CAD/AUD/NZD – All narrowly mixed vs the Buck, as noted above, with the Euro licking wounds inflicted by latest dovish ECB vibes and back on the 1.1200 handle where extremely heavy option expiry interest is anchored (5.2 bn 10 pips either side of the big figure). The Yen is also wary of BoJ guidance skewed towards ongoing or even more stimulus, and bound by hefty expiries as 2.95 bn rolls off at the 108.00 strike and 1.3 bn between 108.30-40 vs the 108.25-61 range so far. Elsewhere, the Loonie awaits Canadian CPI data and is holding above 1.3400 with decent expiries from 1.3350-70 (1.2 bn) in close proximity, while the Aussie and Kiwi are both maintaining their recovery momentum over 0.6850 and 0.6500 respectively ahead of RBA Governor Lowe and NZ Q1 GDP, with the former not unduly ruffled by the latest in a growing list of calls for more rate cuts.
  • EM – The Lira is back on the rack and underperforming amidst the general retracement noted above, and the renewed threat of US sanctions against Turkey has lifted Usd/Try off recent lows to 5.9150+ at one stage. Elsewhere, the Rand has unwound some of its Eskom-related outsize gains despite firmer the forecast SA CPI, with Usd/Zar rebounding through 14.5000.

In commodities, WTI and Brent futures are marginally lower on the day as yesterday’s upbeat sentiment in the complex somewhat wanes ahead of today’s DoE release. Last night’s API numbers showed a slightly narrower-than-forecast draw in crude stocks (-0.81mln vs. Exp. -1.1mln) . Traders will be keeping an eye on the more widely followed DoE numbers for any short term direction (crude stocks expected to draw by 1.077mln barrels), ahead of tonight’s FOMC meeting. On the OPEC front, the oil producers have decided to hold the OPEC meeting on July 1st and the OPEC+ meeting on the 2nd following weeks of indecisiveness. Elsewhere, gold is unwinding some of its risk premium amid President Trump and his Chinese counterpart showed willingness to reignite US-Sino trade talks at the G20, albeit the yellow metal is certain to be swayed by tonight’s Fed meeting and presser. Meanwhile, copper is little changed but holds onto most of its trade-driven gains. Finally, Dalian iron ore futures spiked higher by almost 6% as the base metal followed the broad rally across assets.

US Event Calendar

  • 7am: MBA Mortgage Applications -3.4%, prior 26.8%
  • 2pm: FOMC Rate Decision

DB’s Jim Reid concludes the overnight wrap

Wherever you’re reading this, get comfortable as this is a long one today after probably the biggest day of the year for market moving news. We’ll start by recycling the famous quote, “When the facts change, I change my mind. What do you do?”.

After yesterday’s huge day in financial markets it no longer feels appropriate to be tactically underweight credit. To recap, we decided to move to this position in May as the trade escalation left us feeling that weak markets or poor economic data were needed to push the US and China into meaningful talks. To be fair we did initially see weak markets and slipping economic data but then came a huge change in market pricing of central bank activity, first in terms of the Fed and then the ECB, culminating in Draghi’s extremely dovish signal yesterday. If that wasn’t enough, our weekend sources in Washington which we detailed on Monday were proved correct as Mr Trump tweeted just after the US open that he will meet with China’s President Xi at next week’s G-20. So the balance of risks (and there still are a lot of risks) have become more balanced and more supportive of the carry trade of which credit is a key one. So the path of least resistance now seems tighter for credit, with European credit likely to be additionally propped up by expectations that CSPP is a step closer after yesterday (see this note from last week for more on how to assess the probabilities of this). The risks to the view is that the events of the last month are already leading to a global slowdown that central banks can’t do much about and/or that the Trump/Xi G20 talks end up going nowhere and we get the final round of tariffs applied very soon after and then further escalations. The next hurdle is today’s FOMC which is another much anticipated moment. The market and Mr Trump have put a lot of pressure on the Fed. It’s hard to imagine that they’ll disappoint given all that’s going on but we should note that under Mr Powell, nine out of ten FOMC meeting days have seen equities down. We’ll preview in full below.

Before we go through the details of Mr Draghi and Mr Trump’s significant comments, respectively, it’s worth starting with markets where we can now list new all-time yield lows for 10y bonds. Germany, Denmark, Netherlands, Austria, Finland, Sweden, France, Belgium, Slovakia, Ireland, Slovenia, Latvia, Spain, Portugal, Cyprus and Croatia all experienced this yesterday. Indeed it wouldn’t be a surprise if we missed one or two. Bunds rallied -7.6bps to close at the eye wateringly low level of -0.322%, OATs hit an intraday low of -0.004% – the first time they have been below 0% – while yields in Sweden and Austria closed at -0.027% and -0.052%, both below 0% for the first time too. BTPs also rallied -18.5bps which is the biggest one-day move since October. If you want a scary example of just how extreme the rates move was, then Austria’s 100y bond rose 5.5pts yesterday, taking it to a cash price of 156.9. That means it has jumped nearly 40pts YTD already, equivalent to a -61.2bp fall in yield so far in 2019. The coupon on that bond is 2.1% and the yield is now just 1.14%. Oh, and it has a duration of 51.8! You’d be hard to pressed to find many fixed income assets which have delivered a bigger return YTD. Yesterday’s moves were even more remarkable since they were driven by collapsing real yields as inflation expectations perked up. The European five year-five year inflation swap rate popped up 8.9bps to 1.23%, which is still extremely low by historical standards but was the biggest rise since March 2012.

The move for European rates reverberated throughout the US too. Indeed 10y Treasuries rallied -3.5bps (though they were down -7.9bps before the Trump tweet) and are now down to 2.060%, the lowest level since September 2017. They have held that level overnight also. The 2s10s curve also dipped to 19.15bps (-2.8bps on the day). The amount of negative yielding debt in the world now is around $12.5tn and the most ever. Oh, and the Bund curve is now negative out to 18 years. The other side of the coin for markets was a big rally for risk. The STOXX 600 (+1.67%) had its best day since January. The DAX, CAC and FTSE MIB also all closed up more than 2% while in the US the S&P 500, NASDAQ and DOW ended +0.97%, +1.39% and +1.35%, respectively. Despite the yield move, banks rose +1.54% in Europe (possibly on hints of tiering alongside rate cuts) and +1.79% in the US. EM equities also finished +2.44%, their best session since January, while HY credit spreads were -10bps and -6bps tighter in Europe and the US, respectively. Oil also rallied +3.79%, helped by the improved risk sentiment but also by news that the OPEC+ group will meet to discuss a possible extension to their supply cuts. Finally the euro finished down -0.21% – a fairly modest move all things considered, though -0.43% from its pre-Draghi level.

Overnight in Asia markets are following Wall Street’s lead with the Nikkei (+1.71%), Hang Seng (+2.37%), Shanghai Comp (+1.50%) and Kospi (+1.11%) all posting decent gains. In rates, yields on 10y JGBs are down -2.1bps to -0.158%, thereby hitting the lowest yield since July 2016 and testing the limits of the BoJ’s target range. In other news, here in the UK, the Times reported overnight that the Labour Party leader Jeremy Corbyn will today back a move to change the party’s Brexit policy and support a second referendum in all circumstances. This supposedly follows rising internal pressure from his own MPs. Meanwhile, as we go into the print, Bloomberg is reporting that the Trump administration is weighing three sanctions packages to punish Turkey over its purchases of the Russian S-400 missile-defense system. The Turkish lira is trading down -0.71% on the news.

Back to Draghi, where the most significant statement was “in the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required”. He added “in the coming weeks, the Governing Council will deliberate how our instruments can be adapted commensurate to the severity of the risk to price stability” and that “further cuts in policy interest rates” remain part of the ECB’s toolkit. The plural “cuts” didn’t go unnoticed, and nor did the reference to “how” instruments can be changed, rather than “if.” Draghi went on to say that the “APP still has considerable headroom,” possibly signaling a relaxation in the 33% country limit on purchases. Peter Praet, former ECB Chief Economist whose term ended 3 weeks ago, also added to Draghi’s comments by saying that the ECB will look at tiering if a rate cut moves onto the agenda. There’s little doubt that this counts as a u-turn compared to the June meeting, as evidenced by markets yesterday. The ECB has joined the Fed and the question is how much easing is there to come. Markets are now pricing in around 9bps of cuts by the September meeting, plus another 5bps between September and December. So fully pricing at least one 10bps cut before the year is out. We should also note that overnight, anonymously sourced articles (per Bloomberg) said both that rates will the primary tool before restarting QE and that the options are still being considered.

Beyond the immediate implications for rates, the shift by the ECB will have reverberations throughout and beyond the euro area. It will likely become increasingly difficult for other major central banks, like the BoE, BoJ, and BoC, to tighten policy in the face of European easing. Perhaps more interestingly, there will likely be increased focus on the fiscal authorities to act in concert with the central bank. Draghi devoted a section of his speech to discussing fiscal policy. He said it “should play its role” and that monetary easing works best “if fiscal policies are aligned with it.” He also criticised the fiscal response post-crisis, where he argued that the countries with fiscal space should have made better use of their position by pursuing more expansionary policy, rather than the several percentage points of GDP of tightening that we ultimately got in the event. So the ECB this week have definitely stepped up pressure on governments to do more. Ironically by doing more themselves they actually take pressure off governments to some degree!

Trump had his own say on the ECB, tweeting that “Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easy for them to compete against the US. They have been getting away with this for years, along with China and others” and that “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!” Later in day, news broke that the White House legal office had considered the potential for Trump to demote Fed Chair Powell, to take his chairmanship away but not fire him. It is not clear if that would be legal, but in any event White House economic advisor Kudlow told reporters that Trump is not currently considering that option. However, when reporters asked the President directly about Powell after markets had closed, Trump responded “let’s see what he does.”

It was Trump’s tweet about a “very good telephone conversation” with President Xi of China that was more significant for markets though. Trump confirmed that the two would have an “extended meeting” at the G-20 meeting and that the respective teams of both would begin talks prior to this. Chinese state media confirmed that Xi and Trump had spoken by phone and that Xi had agreed to meet at the G-20. Significantly, Xi also said that the two had agreed that “trade teams should keep talking to solve issues”. While it’s still hard to predict, at the very least this feels like the timeline for any escalation has been pushed back, while the prospect for an agreement has risen. So it was unsurprising to see risk do so well on the back of the headlines.

One final note to add on yesterday’s trade and political news. USTR Lighthizer testified for the Senate and discussed the administration’s trade policy. He didn’t provide much new information, but did say that the apparent deal to avert tariffs with Mexico makes it “more likely” that the administration reaches a deal with China. He also said that tariffs have proven to be a useful negotiating tool, and talked up the odds of trade deals with Japan and Europe, though legislators indicated that many roadblocks remain.

What a time to have a Fed meeting then. The market is pricing in a fairly small chance of a rate cut today – 20% to be precise – and it does feel like the big question is how much the Fed swings to endorsing market pricing which is still for 83bps of cuts over the next 12 months. Our US economists expect the statement to drop its “patient” narrative and adopt language similar to Powell’s recent statement that the Committee will “act as appropriate to sustain the expansion.” This shift should signal that downside risks are building and that the Committee stands ready to lower rates in the coming months if the macro and markets environment justify it. The dots should show some movement in this direction, with the median dot likely to be flat in the coming years and some individual dots calling for cuts this year, but the SEP should stop short of having the median dot imply cuts. Powell’s press conference is likely more important than the dots and this is his chance to reinforce the dovish tilt. More from our US economists can be found here .

Turning quickly to yesterday’s economic data, which was understandably overshadowed by the other news. The highlight was Germany’s ZEW survey. The expectations measure fell -19pts to -21.1, the sharpest drop since July 2016 and the lowest level since November. On the other hand, the current situation measure fell only -0.4pts to 7.8, slightly better than expected. Euro area core CPI was confirmed at 0.8% yoy. In the US, housing starts fell -0.9% mom in May, worse than expected, but the prior month was revised 1.1pp higher to 6.8, leaving the trend steady. Building permits rose 0.3% mom, a touch better than the 0.1% expected.

To the day ahead, where the obvious highlight is the aforementioned Fed meeting. Away from that we’ve got May PPI data due out of Germany this morning, and the May inflation data docket from the UK along with the June CBI survey. Sintra also continues so expect more headlines there. Finally the Tory party leadership debate will see another round of voting.

If you’ve got this far well done…… and thank you!!!

3A/ASIAN AFFAIRS

I)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 27.65 POINTS OR 0.96%  //Hang Sang CLOSED UP 703.37 POINTS OR 2.56%   /The Nikkei closed UP 361.16 POINTS OR 1.72%//Australia’s all ordinaires CLOSED UP 1.21

/Chinese yuan (ONSHORE) closed UP  at 6.9043 /Oil UP TO 3.83 dollars per barrel for WTI and 61.72 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 6.9243 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9068 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

3 a./NORTH KOREA/ SOUTH KOREA

 

 

 

 

 

b) REPORT ON JAPAN

 

3c China/Chinese affairs

i)China/APPLE/

This  is not good for China as Apple now plans to shift up to 30% of production outside of China.  The tariffs wars are certainly having their effect

(courtesy zerohedge)

As Trade War Rages, Apple Plans To Shift Up To 30% Of Production Outside China 

Since the trade war began last year, analysts have been closely parsing every production-related decision by Apple and its suppliers, seeing them as bellwethers of the global consumer-tech industry: Will the American tariffs permanently restructure the global supply chain? Increasingly it’s looking that way. Because not long after a Foxconn executive warned that the largest manufacturer of iPhones in mainland China was ready to help Apple shift production elsewhere, Nikkei reports that suppliers for iPhones, iPads, MacBooks and Apple Ear Pods have all drawn up plans to move 15%-30% of production outside of the mainland, with India, Vietnam, Mexico and Malaysia looking like the top alternatives.

Foxconn

At this point, even if Washington doesn’t follow through with plans to slap tariffs on another $300 billion in goods, companies, including Foxconn, Pegatron, Wistron, Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek have all been asked by Apple to evaluate options outside of China.

Other suppliers are watching these companies, and monitoring where they go.

 

“We need to know where those big assemblers are heading to so that we can initiate our plan too,” an executive at an Apple component supplier told Nikkei.

Apple supplier Wistron has assembled cheaper iPhones in India since 2017, and Foxconn started assembling more iPhones there this year, but volumes have been very small. More than 90% of Apple’s products are still assembled in China. And last year, the number of mainland Chinese and Hong Kong-based suppliers surpassed the number from the US and Japan for the first time, accounting for 41 of the top 200 suppliers.

Chart

China

This is the biggest reason why Apple needs its suppliers to write up plans for long-term “diversification” of production. But trade tensions aren’t the only issue with China: Apple also raised demographic issues like lower birth rates. Ultimately, millions of jobs in China are at risk.

The California-based tech giant’s request was triggered by the protracted trade tensions between Washington and Beijing, but multiple sources say that even if the spat is resolved there will be no turning back. Apple has decided the risks of relying so heavily on manufacturing in China, as it has done for decades, are too great and even rising, several people told Nikkei.

“A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere,” said one executive with knowledge of the situation. “With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production],” giving itself more flexibility, the person added.

China has been the production base on which Apple’s global success has been built over the past two decades. The country has not only been able to rally hundreds of thousands of skilled workers at short notice to fill rapidly rising orders as the company grew, but an extensive and complex ecosystem of components, logistics and talent has built up in and around Apple manufacturing sites.

Some 5 million Chinese jobs rely on Apple’s presence in the country, including those of more than 1.8 million software and iOS App developers, according to a study available on the company’s website. Apple itself employs 10,000 staff in China, the company said.

If Apple and its suppliers decide to follow through, the changes won’t happen right away: In any case, Apple moving 15% of its iPhone production out of China would be a “gargantuan endeavor,” laden with risks like supply-chain disruption and higher costs according to Wedbush. The Wedbush team estimates it would take two-to-three years to pull off. Suppliers appear to agree.

Suppliers admit that replicating this network elsewhere will take time, and China is likely to remain Apple’s most important manufacturing base for the foreseeable future. “It’s really a long-term effort and might see some results two or three years from now,” said one supplier.

“It’s painful and difficult, but that’s something we have to deal with.”

But the trade war has prompted Apple to seriously consider meaningful diversification for the first time, say several sources. At the end of last year, the company began to expand its so-called capital expense studies team, according to sources familiar with the matter.

The team of more than 30 people is discussing production plans with suppliers and negotiating with governments over financial incentives they might be willing to offer to attract Apple manufacturing, as well as regulations and the local business environment.

But at this point, it looks like nothing short of the complete reversal of trade war tensions would stop Apple from directing suppliers to move at least some production elsewhere on a permanent or semi-permanent basis. Which means that whatever Trump and Xi decide in Osaka, best case scenario, it will be too little too late for China, leaving China’s dominance of the tech components and assembly business in jeopardy.

As often as Beijing insists that Washington will feel the greater sting from the trade tensions, this is a major area of vulnerability for China

END
This is a huge story: China’s interbank market has just frozen.  Their economy is now in trouble
(courtesy zerohedge)

Meanwhile In China, Echoes Of Lehman As Interbank Market Freezes

One month ago we wrote that in the aftermath of the shocking government May 24 seizure of Baoshang Bank – not shocking because the bank failed as most Chinese banks are insolvent if left to their own devices due to the real, and far higher levels of non-performing loans, but because the government allowed it to happen in the open, sparking fears of who comes next (and when) – the PBOC “finally panicked and injected a whopping net 250 billion yuan ($36 billion) into the financial system via open-market operations, as it fills what traders have dubbed a growing funding gap following the Baoshang failure.”

In retrospect, the PBOC failed to restore confidence in the stability of the Chinese banking system, and since then things have taken a turn for the far worse.

Yet with the world fixated on the U.S.-China (Mexico, Europe, etc) trade conflict, it is easy to understand why many have brushed aside the Baoshang harbinger and its consequences which have exposed giant fissures under China’s calm financial facade and are gradually freezing up the Chinese banking system.

As the WSJ writes, on Sunday, China’s securities regulator convened a meeting asking big brokerages and funds to support their smaller peers, according to a meeting summary circulated among industry participants Monday. The briefing cited rising risk aversion in money markets after defaults in the bond repurchase market.

The immediate reaction, which we pointed out back in May, is that some of the key interbank lending rates – those which banks rely on to obtain critical short-term funds – have moved sharply higher in recent weeks, with the 1 month repo soaring, and almost doubling over the past month.

For those who are only now catching up with this extremely important story, here is the background context: as we explained last month, and as the WSJ recaps, China’s short-term lending market for banks and other financial institutions has for years operated under the assumption that Beijing wouldn’t allow big losses in the event of defaults or insolvencies (hence the reason why Baoshang’s failure was a shock). That confidence has been shaken by regulators’ unusual public takeover of the troubled Chinese bank near Mongolia last mont, and the even more stunning public admission by the central bank that “not all of Baoshang Bank’s liabilities would necessarily be guaranteed.”

“Bank failure always causes greater concern given systemic fears,” said Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group, suggesting greater pressure on the private sector ahead.

Naturally, with China growing at the slowest pace in recent history, beset by shadow bank deleveraging, trade war, a shaky transition to a consumer economy and China’s first ever current account deficit, these stresses come at a very bad time for the normal functioning of the local economy.

Meanwhile, nonbank financiers like brokerages and funds are key supporters of embattled private businesses, since they buy a significant percentage of corporate bonds. They are also far-and-away the biggest net interbank borrowers, following a 2016 crackdown on short-term borrowing by banks to fund leveraged wealth-management products.

Furthermore, nonbank borrowing through bond repos and interbank loans skyrocketed since China’s central bank began easing monetary policy in early 2018, hitting a net 74 trillion yuan ($10.7 trillion) in the first quarter of 2019, according to Enodo Economics, and up nearly 50% from a year earlier. As the WSJ redundantly warns, “funding troubles for brokerages and other asset managers therefore pose big problems for both financial stability and the real economy.”

Meanwhile, as we warned as far back as March 2017, problems appear to be migrating from the smallish market for negotiable certificates of deposit (NCDs), used mostly by small banks, into the vastly greater bond repo market. Here, while key one-day and seven-day weighted average borrowing rates remain low thanks to huge central bank cash injections – such as the 250BN yuan we described back in May  – longer tenors such as the 1 month repo have marched sharply higher (see top chart).

As an aside, for those asking why NCD’s matter, the answer is because as we first explained two years ago, numerous smaller banks had become acutely reliant on such shadow banking funding mechanisms as Certificates of Deposit, which had become the primary source of short-term funding for many of China’s banks mid-size and smaller banks.

As Deutsche Bank further explained, the banks most exposed to a shut down in this “shadow funding” pathway are medium-sized and small banks – such as Baoshang – for whom wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

Some more background: in China, the funding flow goes like this (per Bloomberg): big national banks lend to smaller regional lenders, which then provide financing to non-bank peers such as brokerages and funds. They in turn use the money to invest in corporate bonds.

“Smaller banks play a key role in this chain,” said Ming Ming, chief fixed-income analyst of Citic Securities Co. Right now investors are quite “risk averse and everyone wants to mitigate counterparty risks. If things get worse, China’s financial market liquidity could collapse,” he added.

In this context, the issue of NCD funding is especially troublesome, because as Bloomberg reported recently, in the aftermath of the Baoshang seizure, some Chinese banks and securities firms “tightened requirements for negotiable certificates of deposits that are used as collateral for funding.” In some cases, private NCDs were shunned altogether, and some financial institutions now only accept NCDs sold by state-owned and joint stock banks as collateral while some have refused to lend money to investors pledging NCDs issued by lenders rated AA+ and below for now.

Worse, as Bloomberg followed up over the weekendthe interbank market is now also freezing up as a result of counterparty suspicions: one month after Baoshang, Chinese bond traders in China are “rethinking counterparty risks as shock waves from a government takeover of a bank ripple through the country’s financial markets.”

In ominous echoes of what happened before, and certainly after the Lehman failure, it has gotten far harder for corporate bonds to be accepted as collateral for repo financing as lenders increasingly demand top quality bonds such as Chinese sovereign bills and policy bank notes as pledges, with Bloomberg noting that “traders are having second thoughts on taking even AAA rated short-term bank debt as security in the wake of last month’s seizure of Baoshang Bank”

As a result, funding among China’s financial institutions has become clogged, in some cases to the point of paralysis, which have already caused borrowing costs to spike for brokerages and smaller banks . The timing couldn’t be worse, not only due to China’s slowing economy, but with liquidity traditionally far tighter at the quarter-end, and further adding to the wide-ranging ramifications of the bank seizure. All this could mean higher defaults, according to Bloomberg Economics.

“Non-bank financial institutions are actually the biggest buyers of corporate bonds in China, and if their funding chain breaks, demand for bonds, particularly those that can hardly be pledged for borrowing, will certainly get hurt,” said David Qu at Bloomberg Economics in Hong Kong. “Weaker companies will suffer a rising cost when selling new bonds, which may eventually lead to higher default risks.”

And while seasonal cash demand ahead of the quarter-end is probably playing a role, the WSJ adds that small banks, squeezed out of the market for NCDs, may also be trying to replace a portion of three or six-month NCD funding in the repo market (again, see the surge in the one-month repo rate which has nearly doubled from 2.9% to 5.2%).

So is this China’s (long overdue) Lehman moment?

There is some good news: one reason for optimism is that the Fed is looking dovish, and may cut rates as soon as today. Last time China’s money markets got worried about counterparty risk in the aftermath of brokerage Sealand Securities’ initial refusal to pay out on a repo-like agreement in late 2016, the Fed was in tightening mode. As the WSJ’s Nathaniel Taplin writes, “a dovish Fed gives China’s central bank more room to cushion any further money-market ructions with ample liquidity without worrying too much about destabilizing capital outflows.”

It’s not all good news however: unlike now, in late 2016 China’s economy was improving and so was corporate creditworthiness. That is no longer the case, and as such, investors should keep a very close eye on China’s money markets in the days ahead to make sure a seasonal cash crunch and problems at a few banks and brokerages don’t result in broad contagion and “contaminate a fragile financial ecosystem”, one which as the Baoshang shock of May 24 shows, is no longer unreservedly backstopped by Beijing.

end

4/EUROPEAN AFFAIRS

i)GERMANY/ECB/EUROPE

Jim Grant of Grant’s Interest Rate Observer notes the comments from the CEO of Germany’s  2nd largest bank: “In a few years we will notice that the ECB experiment was a historical mistake”

(Jim Grant)

CEO Of Germany’s 2nd Largest Bank: In A Few Years We Will Notice The ECB’s Experiment Was A Historical Mistake

Grant’s Almost Daily, submitted by Grant’s Interest Rate Observer

So much winning

“The cultural level of a nation is mirrored by its rate of interest: the higher a people’s intelligence and moral strength, the lower the rate of interest.” Thus declared economist Eugen von Böhm Bawerk, according to Richard Sylla and Sidney Homer’s classic tome A History of Interest Rates. By that logic, Europe is the domain of superhumans, as the overnight deposit rate has resided below zero since June 2014 and at negative 40 basis points since March 2016.

The M.D. overseeing Europe’s monetary affairs has his own version of the Hippocratic Oath.  Speaking at the ECB’s annual forum at the resort town of Sintra, Portugal today, ECB president Mario Draghi made waves by suggesting the central bank will impose still lower interest rates:

Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools. . . Negative rates have proven to be a very important tool in the euro area.

In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.

The implications are clear. Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, told Bloomberg: “Draghi is going to finish his tenure [set to end on Oct. 31] with a cut. The door is now open and I don’t see how they can not walk through it.” Mike Riddell, fund manager at Allianz Global Investors, noted: “The ECB has just handed the bond bulls an ammunition dump.”

Five years and counting into the negative rate era, the ECB’s increasingly radical policies designed to hot up inflation simply haven’t worked. Eurozone CPI rose just 1.2% year-over-year in May, the lowest figure in over a year.  Likewise, the “five year, five year inflation swap rate,” Draghi’s preferred metric for the future inflation expectations that the central bank is so eager to manipulate, fell to a record low 1.14% on Friday, since rebounding to 1.23% but still well below the five-year average of 1.48%, let alone the ECB’s now-symmetrical, “close to 2%” bogey.

While inflation stubbornly refuses to follow the playbook, the bond market has been more easily cowed. Following Draghi’s remarks today, the French 10-year yield temporarily broke below zero for the first time ever, while Sweden (which resides outside of the eurozone currency bloc but is an E.U. member state) also saw its 10-year borrowing costs make their first ever foray into negative territory.

More broadly, the worldwide sum of negative-yielding debt instruments rose to $11.8 trillion as of yesterday, up from less than $6 trillion as recently as last fall and within range of the record $12.2 trillion seen in July 2016 (when the 10-year Treasury yielded less than 1.4%, compared to 2.06% today). Never in the 4,000 years of human history, per Sylla, were negative rates seen in substantial size prior to this cycle.  The upside-down policy rate extends to the less-creditworthy members of the E.U., as Baa3/triple-B-rated Italy and B1/double-B-minus-rated Greece saw their 10-year yields fall to 2.12% and 2.51%, respectively, not far above the split-rated (triple-A at Moody’s, double-A-plus at S&P) United States.

 

Bloomberg’s global negative rate index by market capitalization since January 2010

The peculiar state of affairs has not seemed to help the Old Continent’s frail banking system, which lags far behind global peers in terms of profitability and valuation (Almost Daily Grant’s, May 28). As the banks list, one of the shakiest institutions continues to search for answers. Bloomberg reports today that Deutsche Bank A.G. (which has seen shares fall 84% in the last nine years to less than 21% of its year-end 2018 book value) CEO Christian Sewing is set to “purge” a number of top executives and is also “zeroing in on another round of deep trading cuts that may result in the shuttering of the U.S. equities” division.

Others take a different tack. Speaking on a conference panel this morning, Cornelius Riese, co-CEO of Frankfurt-based DZ Bank A.G. (Germany’s second-largest by assets), observed that negative rates indeed “have a huge impact on banks.” Riese ventured to offer some gentle criticism of Draghi & Co.’s grand policy experiment: “Maybe at the end of the story, in three to five years, we will notice it was a historical mistake.”

Not everyone was so circumspect. This morning, Donald Trump took to Twitter to complain:

Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.

Sad!

end

ITALY

Tensions are boiling with the MIn BOT issue

(courtesy Mish Shedlock/Mishtalk)

Meet The Mini-BOT: Italy Will Break Up The Eurozone

Authored by Mike Shedlock via MishTalk,

A crisis is brewing in the Eurozone and it’s not even on mainstream media radar. Italy is at the center of the crisis.

BOT stands for Buoni Ordinari del Tesoro (Ordinary Treasury Bonds).

Mini means the denomination is smaller than the lowest denomination of regular treasury bonds, which is €1,000, thus “Mini-BOT”.

The Italian government, led unofficially by deputy prime ministers Matteo Salvini (League) and Luigi Di Maio (Five Star Movement) both support the idea of a parallel currency.

The technocrat prime minister, Giuseppe Cont, is not calling the shots and threatened to resign over this issue.

ECB president, Mario Draghi, proclaimed “Mini-BOTs are either money and then they are illegal, or they are debt and then the stock of debt goes up. I don’t think there is a third possibility.

Possibility Three

A week ago, I noted possibility number three in Italy’s Mini-BOT Trojan Horse Could Blow Up the Eurozone.

Possibility three is a Trojan horse designed as a stepping stone to get Italy out of the Eurozone.

Boiling Point

The Telegraph reports Italian Tensions Hit Boiling Point Over Plans for ‘Currency’ to Rival the Euro.

The two parties that make up the fractious governing alliance – the hard-Right League and the Five Star Movement – want to introduce a new type of government bond that would be used to pay off the state’s debts to companies and individuals.

Both the League and Five Star are deeply eurosceptic and have in the past mooted the idea of abandoning the common currency, with Matteo Salvini, the League’s combative leader, last year calling the euro “a mistaken experiment that has damaged jobs and the Italian economy“.

The idea of introducing mini-BOTs has alarmed Europe, with Mario Draghi, the head of the European Central Bank, saying on Thursday that they would either amount to a parallel currency, in which case they would be illegal, or they would simply add to Italy’s towering debt.

He received support a day later from Vincenzo Boccia, the president of Confindustria, Italy’s employers’ federation, who said: “We are on the same wavelength as Draghi about the mini-bots because it would just mean more public debt.”

“There’s a complicated game going on between the League, Five Star, the Quirinale (the residence of the president of Italy, Sergio Mattarella), ministers and the prime minister,” said Prof Giovanni Orsina, a professor of politics at Luiss University in Rome.

Showdown Coming Soon

A showdown is certain.

The timing is unknown, but it is sooner rather than later.

At the moment, France is also in breach of economic rules and there is this “little” thing called Brexit on the ECB and EU’s mind.

So the EU will do what it always does, pretend there is no crisis and hope it goes away. But it won’t.

Meanwhile, Italy wants to do this and will do this, but it would rather the EU trigger the event.

Path Set

Italy’s budget is not close to meeting EU rules.The EU has threatened Excessive Deficit Procedures against Italy.

The EU will bush this aside debt targets for as long as it can, but the fate is sealed. The EU will either have to abandon its rules or fine Italy.

The upcoming fine and a spike in Italian bond yields will be the trigger for Italy to escalate the crisis with Mini-BOTs.

The longer the EU waits, the more time Italy has to prepare for the Mini-BOT launch.

I expect this to trigger within a year, and possibly months.

Italy is set to leave the Eurozone. The Mini-BOT is the transition mechanism. Few see it coming.

END
EUROPE/USA/JAPAN
The following is a must read as Luongo explains in detail what happened yesterday and probable scenarios for the upcoming months
(courtesy Tom Luongo)

Draghi Punts, Trump Grunts, Gold Bunts

Authored by Tom Luongo,

For months now the markets have been in denial that ECB President Mario Draghi has any answers to the Euro-zone’s problems. Today’s statement confirms what anyone with eyes to see has been saying.

There is no Plan B.

Draghi started the year saying he would end his various QE programs and by June he’s not only put them back on the table (New TLTRO in September) but has now opened up the possibility of taking rates lower.

Draghi told an ECB conference in Sintra, Portugal, that “further cuts in policy rates… remain part of our tools.” He added that there was “considerable headroom” to re-start bond purchases, which inject newly created money into the financial system in the hope of boosting lending and economic activity.

Draghi has been exposed as swimming naked, as Warren Buffet would put it.

The fun part is that Draghi used the cover of Trump’s trade war with everyone to justify a policy that was inevitable anyway.

In response, President Trump piled on accusing Draghi of being a currency manipulator. And then announced his upcoming meeting with Chinese Premier Xi Jinping to hammer out a trade deal.

But, as I’ve pointed out in the past, Trump doesn’t have a serious offer on the table for China.

Trump backed himself into a corner with China, essentially demanding it give the U.S. ultimate say over its fiscal, monetary and trade policy.

The Chinese aren’t going to agree to that any more than the Palestinians are going to agree to a Palestinian State in name only, administered like a Native American reservation by Israel.

Lebanon is not going to accede to Pompeo’s demands to remove Hezbollah from its government. North Korea isn’t going to give up its nukes so the U.S. will allow it to trade with dollars. Negotiations with Trump are nothing of the sort.

They are terms of surrender.

And Trump, in full re-election mode, is running around telling his MAGApede followers, “China broke the deal.”

There never was any deal. There was a draft agreement China took back to Beijing and altered to suit the demands of any sovereign nation. And Trump threw a temper tantrum which is creating massive uncertainty all across the capital markets.

So don’t have any hopes of seeing a deal with China that is substantively different than the one we currently have. Because Xi is no more going to cave to Trump’s idiotic demands than Draghi will admit central banking is a failure.

I’ve warned readers time and again that Trump is an economic ignoramus. Draghi’s dovishness is a response to the very policies Trump has implemented. Sanctions and tariffs on everyone that looks at him sideways creates uncertainty.

Uncertainty creates fear. And fear means deflation. In a confidence-based system a lack of it leads to hoarding of the currency most needed by everyone to do business.

This isn’t rocket science folks, but it is beyond the ken of His Orangeness.

So, while markets soared on the news that the ECB would commit hari kiri gold pumped and then dumped just as quickly as Trump took hold of the algorithms for a Warhol-like fifteen minutes.

Gold continues to struggle to find a perch above $1350 getting rebuffed every time it gets there by the flimsiest of excuses. Today it was Trump’s tweet about meeting with Xi.

Gold was up on the news of the ECB loosening things up even more. Then it was sold on the idea that China and the U.S. would kiss and make up, freeing up trade. At this point there is little rhyme or reason as to what’s happening in the gold market.

I noted this with Friday’s action for my weekly post over at Money and Markets.

So the day-to-day movements can be hard to parse. After an explosive couple of weeks gold moved to briefly touch $1,360 to end the week before pulling back hard to $1,340. At the same time the euro and the British pound reversed their short-term rallies to continue sinking into oblivion on Brexit-anxiety as Boris Johnson handily won the opening round of the Tory leadership struggle.

On Friday a weak euro sent gold down. Today it rose until Trump got his mitts on it. It is interesting to note that intraday volatility is rising as the bulls keep pushing it up against the massive overhead resistance in place since the high put in just after the original Brexit vote in July of 2016.

The fight for this level is intensifying as bulls keep pressing but the demand for immediate dollars is strong enough that we see violent dumps into strength.

Remember, no one important wants to see gold rise through the cap currently in place. When it does it will be the biggest tell of all that Draghi, Jerome Powell at the Fed and the rest of the central bankers don’t have any answers for what is happening.

And we’re going to find out tomorrow just how few answers they have. I’m still of the opinion that Powell will hold off on a rate cut here to keep the Fed’s reputation and independence intact, as least nominally. The more Trump screams, the less likely the Fed will cut until it looks like their idea.

Trump will bitch but it won’t matter. The Fed will hold off here as long as possible even though the yield curve inversion gets deeper. The stock markets are still near record highs, hated on poor fundamentals, so the Fed doesn’t have to act here.

There is something else that has the markets spooked. The U.S. Dollar LIBOR curve is now also inverted, signaling short-term funding worries.

The announcement earlier in the week that Deutsche Bank is looking at spinning off a “Bad Bank” may be part of what we’re looking at here. As Jeff Snider wrote about on Monday, if DB bet wrong on a global reflation for 2018-19 which failed in a big big way last year then it would account for why there has been such a rush out into sovereign debt as DB is sitting on a mountain of bad bets which need to be cordoned off.

And that’s probably why Draghi’s position has so thoroughly shifted in the past two meetings. Trump is irrelevant in this mess, except that his misunderstanding of the situation can and will lead him to pour gasoline on an already roaring fire while he rails about trade theft.

But look carefully at what’s happening. I reiterate what I’ve been saying for months. Gold is strong alongside the a rising dollar. Equities continue levitating and safe-haven sovereign bonds continue to defy gravity right alongside them.

This isn’t a recession that has the markets spooked. It’s something far larger. Draghi’s admitted defeat, joining Kuroda at the Bank of Japan. All that’s left is Powell. If he surprises with a rate cut expect gold to explode and the dollar to briefly sell off before turning higher as the smart money understands what it really means.

*  *  *

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)TURKEY/USA

The Turkish lira plummets as Trump and allies ar ready to impose sanctions on a crippled Turkey economy. They are going to target the big Turkish companies with sanctions against doing business with the west.

this is deadly..

(courtesy zerohedge)

Trump Planning “Economy Crippling” Sanctions Against Turkey Over S-400 Purchase

With Turkey’s purchase of the Russia S-400 missile-defense system looking like a done deal, the Trump Administration, which claims it already made Ankara its ‘best offer’ on the US Patriot missile-defense system, is trading the carrot for the stick and, in a non-too-subtle message to Erdogan and his senior advisors, warned that, if Turkey goes ahead with the purchase, the US will drive Turkey’s nascent defense industry into ruin with CAATSA.

Just days after Turkish officials warned that the S-400 purchase was as good as doneBloomberg reported on Wednesday that Trump is feeling ‘bipartisan’ pressure from Congressional leaders to impose CAATSA sanctions against Turkey, and the administration has devised three plans for retaliation.

Trump

Since technically any country that buys defense equipment from Russia is eligible for American sanctions, Congressional leaders are reportedly arguing that there’s no legal reason to excuse Turkey from the sanctions (which appear to be applied on an ad hoc basis, seeing as America’s idle threats haven’t stopped India and others).

The last time Trump took an aggressive tack with Turkey, he came away with the win: everybody who insists that punitive tariffs don’t work should first remember Turkey’s decision to release pastor Andrew Brunson, made after Washington doubled metal tariffs on the country in August and slapped sanctions on two senior government officials. The result? Brunson was released shortly afterward.

And Trump is hoping the strategy will work again, though, so far at least, Turkey has shown no indication that it plans to back down.

The US has been considering possible sanctions for well over a year as it became clear Turkey wasn’t going to back down. A leading proponent was Wess Mitchell, the assistant secretary of State for European affairs who stepped down earlier this year.

“This has the potential to spike the punch,” Mitchell said of the S-400 purchase in Senate testimony in June 2018. “We can’t be any clearer than saying that both privately and publicly, that a decision on S-400 will qualitatively change the U.S.-Turkish relationship in a way that would be very difficult to repair.”

Yet Turkey has so far refused to back down. Part of the country’s calculation, according to people familiar with the matter and outside experts, is that Erdogan believes he can split Trump off from the rest of his administration and persuade him that buying the S-400 isn’t a big problem.

Which is why Trump has developed his three plans, all of which would involve using CAATSA to impose sanctions, and the most serious of which would ‘cripple the Turkish economy’. At the very least, Washington will likely cut off sales of any new F-35s to the NATO ally.

The Trump administration is weighing three sanctions packages to punish Turkey over its purchases of the Russian S-400 missile-defense system, according to people familiar with the matter.

The most severe package under discussion between officials at the National Security Council and the State and Treasury departments would all but cripple the already troubled Turkish economy, according to three people familiar with the matter, who asked not to be identified discussing internal deliberations.

Any of the options would come on top of the months-old U.S. pledge to cut off sales of the F-35 jet to Turkey if President Recep Tayyip Erdogan keeps his vow to buy the Russian system.

The idea with the most support for now is to target several companies in Turkey’s key defense sector under the Countering America’s Adversaries Through Sanctions Act, or CAATSA, which targets entities doing business with Russia. Such sanctions would effectively sever those companies from the U.S. financial system, making it almost impossible for them to buy American components or sell their products in the U.S.

Once again, the Turkish lira weakened on the disappointing sanctions news. It was down as much as 1.5% to 5.9171 per dollar on the news, though was trading off 0.6% more recently.

But there’s still the G-20 summit in Osaka, where it’s believed Trump and Xi will have an opportunity to meet. It’s not clear how BBG knows this, but Erdogan is reportedly hoping he can speak to Trump alone in Osaka, and split him off from the rest of his advisors, like he did when he convinced Trump to pull American troops from Syria.

END
Russia,India, China/USA
In the latest TIC report we are witnessing not only Russia but also China and India shuning the dollar in favour of gold
The Russian director of Foreign Intelligence now calls the dollar becoming “toxic”
(zerohedge)

“The Dollar Is Becoming Toxic” – Russian Intel Chief Slams “Aggressive, Unpredictable” US Behavior

With the latest TIC data showing China following Russia’s lead and reducing its US Treasury exposure (to two-year lows), as it increases its gold reserves (for six straight months), the unipolar US hegemon faces an ugly trend among the ‘rest of the world’ attempting to de-dollarize, as Sergey Naryshkin,  director of the Russian Foreign Intelligence Service, calls the US dollar is an anachronism of the modern world economy.

Countries across the globe, including Russia, China, India, and others, have been working to diversify their foreign reserves away from the greenback.

And, as RT reports, the head of the Russian intelligence service has now voiced those concerns clearly – that the use of the dollar presents risks and more nations are looking into finding alternative tools for doing business.

“It seems abnormal that the United States, behaving so aggressively and unpredictably, continues to be the holder of the main reserve currency.”

“Due to the objective strengthening of multipolarity, the monopoly position of the dollar in international economic relations becomes anachronistic. Gradually, the dollar is becoming toxic.

And it’s not just talk, as RT notesRussia has taken concrete steps towards de-dollarizing the economy. So far, Moscow has managed to partially phase out the dollar from its exports, signing currency-swap agreements with a number of countries, including China, India, and Iran. Russia has recently proposed using the euro instead of the US dollar in trade with the European Union.

This comes on the heels of Malaysian Prime Minister Dr. Mahathir Mohamad proposing a gold-backed currency as a unit of account for trade between East Asian nations.

“For the past 40+ years we’ve tried to remove ourselves from a gold standard, we pretended it doesn’t exist… and that failed because gold is always telling the truth… and you don’t have to trust to somebody printing up a whole bunch of money,”

Today’s currency trading is manipulative, he added.

END

6. GLOBAL ISSUES

Strange:  the Loonie spikes higher after Cdn core inflation soars to 10 yr highs.  The view is that the North is emerging from its growth slowdown…I beg to differ..

(courtesy zerohedge)

Loonie Spikes After Canadian Core Inflation Soars To 10-Year Highs

Canadian inflation rose faster than expected in May across all eight major components, spiking the Loonie as it supports the BoC’s view that ‘the North’ is emerging from its growth slowdown (and Poloz argument that rates will need to go higher).

The headline consumer price index jumped 2.4% from a year earlier, compared with 2% in April and versus a median economist forecast of 2.1%, Statistics Canada said Wednesday from Ottawa. It was the highest annual rate since October, boosted by increases in food and durable goods prices.

Core inflation, closely watched by policy makers, surged, with the average of the three key measures rising to 2.07%, the highest since February 2012.

The largest upside contributor to CPI on an annual basis was shelter costs, which rose 2.7%. Food and transportation were also major drivers.

And the Trimmed Mean inflation print jumped 2.3% YoY – the highest since March 2009

Spiking the Loonie…

Presumably, BoC does not believe this spike is “transitory”.

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA/

 

 

 

 

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

Euro/USA 1.1206 UP .0008 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 /MIXED

 

 

USA/JAPAN YEN 108.40 DOWN 0.183 (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 1.2584   UP   0.0018  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3378 UP .0005 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 8 basis points, trading now ABOVE the important 1.08 level RISING to 1.1206 Last night Shanghai COMPOSITE CLOSED UP 27.65 POINTS OR 0.96% 

 

//Hang Sang CLOSED UP 703.37 POINTS OR 2.56%

/AUSTRALIA CLOSED UP 1,21%// EUROPEAN BOURSES ALL MIXED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL MIXED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 703.37 POINTS OR 2.56%

 

 

/SHANGHAI CLOSED UP 27.65 POINTS OR 0.96%

 

Australia BOURSE CLOSED UP. 1.21% 

 

 

Nikkei (Japan) CLOSED UP 361.16  POINTS OR 1.72%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1343.25

silver:$14.95-

Early WEDNESDAY morning USA 10 year bond yield: 2.08% !!! UP 2 IN POINTS from YESTERDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.56 UP 1  IN BASIS POINTS from TUESDAY night.

USA dollar index early MONDAY morning: 97.55 DOWN 9 CENT(S) from  TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx6

And now your closing WEDNESDAY NUMBERS \12: 00 PM

Portuguese 10 year bond yield: 0.55% UP 2 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.14%  DOWN 2   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.40%//UP 1 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD: 2.11 DOWN 1 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 171 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: RISES –.29% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.40% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE 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 1.1218  UP    .0020 or 20 basis points

USA/Japan: 108.36 DOWN .222 OR YEN UP 22  basis points/

Great Britain/USA 1.2630 UP .0065 POUND UP 65  BASIS POINTS)

Canadian dollar UP 23 basis points to 1.3350

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 6.9036    0N SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  6.9028  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.8328 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.14%

 

Your closing 10 yr US bond yield UP 3 IN basis points from TUESDAY at 2.09 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.57 UP 2 in basis points on the day

Your closing USA dollar index, 97.40 UP 24  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 39.50  0.53%

German Dax :  CLOSED DOWN 23.22 POINTS OR .19%

 

Paris Cac CLOSED UP 8,72 POINTS 0.16%

Spain IBEX CLOSED DOWN 9.50 POINTS or 0.10%

Italian MIB: CLOSED UP 87.60 POINTS OR 0.41%

 

 

 

 

 

WTI Oil price; 53.65 12:00  PM  EST

Brent Oil: 62.01 12:00 EST

USA /RUSSIAN /   ROUBLE RISES:    63.86  THE CROSS LOWER BY 0.19 ROUBLES/DOLLAR (ROUBLE HIGHER BY 19 BASIS PTS)

 

TODAY THE GERMAN YIELD RISES  TO –.29 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 :  52.27//

 

 

BRENT :  61.32

USA 10 YR BOND YIELD: … 2.02…   VERY DEADLY//

 

 

USA 30 YR BOND YIELD: 2.53..VERY DEADLY/

 

 

 

 

 

EURO/USA 1.1233 (UP 35   BASIS POINTS)

USA/JAPANESE YEN:108,12 DOWN .463 (YEN UP 46 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.26 DOWN 39 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2649 UP 83  POINTS

 

the Turkish lira close: 5.8017

 

 

the Russian rouble 63.80   UP 0.25 Roubles against the uSA dollar.( UP 25 BASIS POINTS)

Canadian dollar:  1.3295 UP 79 BASIS  Pts

USA/CHINESE YUAN (CNY) :  6.9036  (ONSHORE)/we need to watch these levels/anything greater than 6.95 will be deadly./

 

USA/CHINESE YUAN(CNH): 6.8951 (OFFSHORE) we need to watch these levels/anything greater than 6.95 will be deadly/

German 10 yr bond yield at 5 pm: ,-0.29%

 

The Dow closed UP 38.46 POINTS OR 0.15%

 

NASDAQ closed UP 33.44 POINTS OR 0.42%

 


VOLATILITY INDEX:  14.33 CLOSED DOWN .82

LIBOR 3 MONTH DURATION: 2.388%//libor dropping like a stone

 

 

 

FROM 2.418

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

TRADING IN GRAPH FORM FOR THE DAY//

Dovish Fed Sparks Safe-Haven Scramble For Bonds & Bullion As Traders Dump Dollar

Powell: “There was not much support for cutting rates now at this meeting. It would be better to see more before moving.”

How much moar will the market demand now?

Just how dovish was it? While 8 Fed members now see at least one cut in 2019, the median rate expectation did not change (not that dovish)…

 

But 2020 median rate expectations did continue to slide…

 

 

US equity markets trod water for most of the day until the FOMC statement, and even then did not surge as so many had hoped on Powell’s dovishness…

 

Stocks overall ended higher on the day… (thanks to a panic bid around 1540ET)

The S&P is less than 1% from record highs
Thanks to a huge buying program that suddenly appeared…

 

Defensive stocks soared on the Fed statement and the initial cyclical spike faded…

S&P Utilities closed at a record high.

Financials slumped into the red after The Fed…

 

Bonds and stocks keep diverging further…

 

Treasury yields plunged on the Fed statement…(harvey: deadly)

 

With 10Y testing yesterday’s cycle spike lows with a 2.01% handle…

 

And 2Y Yields crashed over 10bps to its lowest since Nov 2017…

 

Inflation Breakevens jumped after The Fed statement…

 

The Dollar tumbled on the Fed Statement

 

 

Cryptos trod water today (with Bitcoin hovering around $9100)…

 

 

Commodities all rallied on the Fed statement…

 

Investors rushed into gold as the dovish Fed statement struck, pushing the precious metal back above $1350 once again…

But it appeared the machines were working hard

 

Finally, we note that this is only the 2nd time in Powell’s 11 meetings that the S&P closed green on FOMC day…

As Fed rate-cut expectations accelerate lower…

And The National Financial Conditions Index shows that things are already about as loose as can be, lower than before the 2008 financial crisis.

end

And that’s before The Fed cuts. As Bloomberg’s Cameron Crise noted,John Williams suggested a few weeks ago that the Fed wouldn’t be beholden to bond markets. I guess he was wrong.

The ultimate justification for the change in tune looks to be a downgrade to the inflation profile, even though just six weeks ago the inflation shortfall was deemed to be “transitory.” It’s hard to escape the notion that the Fed was dragged into this shift by market pricing; it seems as if bond traders are running policy now.

end

 

 

 

i) Market trading/ FOMC

Economics
VERY DOVISH!!
(COURTESY CRAIG TORRES/BLOOMBERG)

Fed Scraps `Patient’ Rate Approach in Prelude to Potential Cut

The Federal Reserve indicated a readiness to cut interest rates for the first time in more than a decade to sustain a near-record U.S. economic expansion, citing “uncertainties” in their outlook.

While Chairman Jerome Powell and fellow policy makers left their key rate in a range of 2.25% to 2.5% on Wednesday, they dropped a reference in their statement to being “patient” on borrowing costs and forecast a larger miss of their 2% inflation target this year.

 

While inflation near the goal and a strong labor market are the most likely outcomes, “uncertainties about this outlook have increased,’’ the Federal Open Market Committee said in the statement following a two-day meeting in Washington. “In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion.”

 

The FOMC vote was not unanimous, with St. Louis Fed President James Bullard dissenting in favor of a quarter-point rate cut. His vote marked the first dissent of Powell’s tenure as chairman.

Policy makers were starkly divided on the path for policy. Eight of 17 pencilled in a reduction by the end of the year as another eight saw no change and one forecast a hike, according to updated quarterly forecasts.

In the statement, officials downgraded their assessment of economic activity to a “moderate” rate from “solid” at their last gathering.

The pivot toward easier monetary policy shows the Fed swinging closer to the view of most investors that President Donald Trump’s trade war is slowing the economy’s momentum and that rates are too restrictive given sluggish inflation.

The change in tone follows attacks on the Fed by Trump for not doing more to bolster the economy and Tuesday’s report by Bloomberg News that the president asked White House lawyers earlier this year to explore his options for demoting Powell from the chairmanship.

That risks casting a political shadow over whatever policy decision the Fed makes, though Powell and his colleagues say they’re focusing only on the economic goals Congress gave them.

Officials noted that “growth of household spending appears to have picked up from earlier in the year” and that indicators of business fixed investment “have been soft.” They repeated that the labor market “remains strong.”

Investors have been betting the Fed will reduce rates at its next meeting in late July, though a majority of economists surveyed earlier this month don’t expect a move until December. Yields on 10-year Treasuries have fallen to the lowest since 2017. The hope of fresh stimulus has sent U.S. stocks to near a record.

Recent U.S. economic data have been mixed. Consumer spending held up in May but job gains were disappointing, and some gauges of business sentiment have cooled on uncertainty around the outlook for trade. The Fed remains bedevilled by inflation continuing to undershoot the central bank’s 2% target despite unemployment being at a 49-year low.

Central bankers are likely hoping for greater clarity over Trump’s trade war with China. Stocks jumped on Tuesday after the president said he would meet Chinese leader Xi Jinping at next week’s Group of 20 summit in Japan.

The Fed, which raised interest rates four times last year and as recently as December projected further hikes in 2019, isn’t alone in shifting tack. European Central Bank President Mario Draghi on Tuesday paved the wayfor a rate cut, and central banks in Australia, India and Russia have lowered borrowing costs this month.

Get More

  • The median projection for 2019 GDP growth was unchanged at 2.1% and revised up by a tenth of a point to 2% in 2020. The 2021 estimate was held at 1.8%.
  • The median unemployment rate forecasts 2019-21 were all lowered by a tenth of a point. Officials see 3.6% this year rising to 3.7% next year and 3.8% in 2021.
  • Officials see the jobless rate most consistent with full employment in the long run at 4.2%, versus 4.3% in March.
  • Officials cut estimates for their preferred inflation gauge. The personal consumption expenditures price index is expected to increase just 1.5% in 2019, down from a 1.8% projection in March. By 2020, the main and core gauges are both projected to rise 1.9%, below the target.

— With assistance by Chris Middleton

 

MARKET TRADING/LATE MORNING

Fed Hints At July Cut As Expected, Drops “Patient” Language, Says “Outlook Uncertainty” Has Increased

With stocks 1% away from record highs and bond yields (and the curve) tumbling as market expectations for multiple rate-cuts surge, Fed Chair Powell is going to have to thread a very fine needle today – shifting Fed indications towards the market’s view without panicking markets over “what he knows that we don’t.” And of course, Trump will be watching closely…

Offering Powell some room for maneuver is the fact that June rate-cut expectations are around 23%, but July expectations are over 80%, so the dots better adjust soon.

And the market is pricing in two cuts in 2019 and 3 by the end of 2020, though we note that the last two days have seen a significantly hawkish shift in the 2019 rate expectations…

And considering that financial conditions are back near record easiness, what will The Fed cutting rates actually achieve other than to maintain equity prices that have levitated on this hype?

Survey-based inflation expectations are at record lows and market-based inflation expectations are crashing.

So, what will Powell do?

Bloomberg Chief U.S. Economist Carl Riccadonna:

“The markets are leaning hard in favor of monetary-policy easing. Fed officials are no doubt disconcerted by recent signs of dimming global- and domestic-growth prospects, cooler inflation and mounting evidence of trade-war casualties. Still, we believe they will avoid fully pivoting from `patient’ to proactive until there is more data at hand.”

And here is what he did…

  • Fed keeps rates unchanged but removes reference to being “patient” on rates while adding that “uncertainties” around its outlook have increased, even if did not warn of “material downside risks” to outlook.
  • The FOMC says it will “act as appropriate to sustain the expansion” and “closely monitor” incoming information, language that echoes Powell’s recent speech but is new to the statement.

The key sentence was the following:

uncertainties about this outlook have increased. In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective

And yet it wasn’t as dovish as some had expected, with the Fed avoiding to mention “material downside risk to the outlook.

The Dot Plot adjusted dramatically lower…

  • For 2019, 8 Fed officials see lower rates with 7 of them seeing 2 cuts this year (and 1 seeing one cut). At the same time 8 see unchanged rates and 1 sees a rate hike.

  • The breakdown from the above dot plot is as follows:
    • 2019 2.375% (range 1.875% to 2.625%); prior 2.375%
    • 2020 2.125% (range 1.875% to 3.125%); prior 2.625%
    • 2021 2.375% (range 1.875% to 3.125%); prior 2.625%
    • Longer Run 2.5% (range 2.375% to 3.250%); prior 2.75%
  • For 2020, one additional official joins the cut camp, shifting the median down… but in 2020, the median moves back to 2.4%. The long-run neutral rate comes down to 2.5% from 2.8%, a major move.

Notably – as the chart above shows – the Median dot for 2019 did not drop to a cut!

Bloomberg’s Matthew Boesler notes that:

“Interesting to see Fed officials downgrade their inflation projections even as they upgrade GDP growth and unemployment expectations and project a shallower rate path, which suggests even more skepticism about the Phillips curve relationship than before.”

Looking at the projections, a similar blurry picture emerges:

Longer-run median unemployment rate 4.2% compares to previous forecast of 4.3% at March 20, 2019 meeting

  • 2019 median jobless rate at 3.6% vs 3.7%
  • 2020 median jobless rate at 3.7% vs 3.8%
  • 2021 median jobless rate at 3.8% vs 3.9%

Longer-run real GDP median projection of 1.9% compares to previous forecast of 1.9%

  • 2019 median GDP growth 2.1% vs 2.1%
  • 2020 median GDP growth 2.0% vs 1.9%
  • 2021 median GDP growth 1.8% vs 1.8%

Longer run PCE inflation median at 2.0% compares to previous forecast of 2.0%

  • 2019 median core PCE inflation 1.8% vs 2.0%
  • 2020 median core PCE inflation 1.9% vs 2.0%
  • 2021 median core PCE inflation 2.0% vs 2.0%

Longer run Fed funds median at 2.5% compares to previous forecast of 2.8%

  • 2019 median Fed funds 2.4% vs 2.4%
  • 2020 median Fed funds 2.1% vs 2.6%
  • 2021 median Fed funds 2.4% vs 2.6%

Full Redline below:

*  *  *

Finally,what happens next?

As Deutsche strategist Alan Ruskin pointed out, since Powell took over the leadership at the Fed in February 2018, risky assets have tended to trade down on FOMC decision days. The S&P 500 declined on the day of nine of the past 10 meetings presided by Powell, with a median drop of 0.29%.

The only exception was in January when the Fed, in a dramatic flip-flop, announced that it’s done with rate hikes.

And as Powell hints at rate-cuts, we note two things…

Sven Henrich

@NorthmanTrader

Fun historic fact:
Every single time the Fed cut rates when unemployment was below 4% a recession immediately ensued & unemployment shot to 6%-7%.
Again: Every. single. time.

John P. Hussman@hussmanjp

With the exception of 1967 and 1996, every initial Fed rate cut has been associated with an oncoming or ongoing recession. Be careful what you wish for.

So just when he thinks he will preempt the recession, the lagged impact of the lowest starting point for a rate-cut cycle will be unable to avoid a recession slapping into the US economy (and being ignored by US stocks).

 

 

end

 

LATE AFTERNOON

Dollar, Bond Yields, & Bank Stocks Tumble After ‘Dovish’ Fed Statement

Not priced in…

The Fed shifted its dot plot notably lower – though 2019 median remains unch – and that has sent bond yields and the dollar careening lower….

Dollar dumped to one-week lows…

10Y Yields plunged to yesterday’s intraday spike lows…

The major stock indices are higher but not holding kneejerk gains…

And bank stocks have turned red…

As rate-cut expectations for 2019 accelerated…

And July rate-cut expectations are now at 100%!!

end

ii)Market data/

iii)USA ECONOMIC/GENERAL STORIES

Let us see if Michael Every is right as Powell might have to explain why he is cutting rates just like Draghi is scheduled to do.

(courtesy Michael Every/Rabobank)

“Today The Fed Will Explain Why They Are About To Cut Rates When Unemployment Is So Low”

Submitted by Michael Every of Rabobank

Great Bu’s Up

Blackadder II is one of the best ever British TV comedies: forget Mr Bean and watch Rowan Atkinson as Edmund Blackadder try to connive his way through the dangerous medieval court of Queen Elizabeth I. Episode 5 (Beer) is of particular relevance today. In it, Blackadder entertains his elderly aunt and uncle, both puritans, in the hope of charming a huge inheritance from them. Yet due to a scheduling mix-up, just down the corridor courtiers have come for an evening of debauched drinking with the alcohol-intolerant Blackadder, and the first to pass out has to pay a fine of 10,000 florins – which Edmund doesn’t have. Our anti-hero sits at the dining table to entertain his tedious relatives…

Edmund: So, how are we all going, then?

Aunt: Not well. Let us discuss your inheritance.

Edmund: Ah, yes, good. Erm, a little drink, first?

Aunt: [stands] Drink?! [slaps him twice] Wicked child!!! Drink is urine for the last leper in Hell!

Edmund: Oh, no, no–this is only water. This is a house of simple purity.

[Drunk monk enters in convulsions. He rushes to the fireplace and vomits, then turns and begins to leave.]

Monk: Great booze-up, Edmund!

[very awkward, long pause]

Aunt: Do you know that man?

Edmund: [looks behind himself as though he didn’t really see] No…

Aunt: He called you `Edmund’…

Edmund: Oh, *know* *him*…oh, yes, I do.

Aunt: Then can you explain what he meant by `great booze-up’?

Edmund: [thinks … thinks … thinks … thinks … thinks … thinks … thinks] Yes, I can… My friend…is…a missionary… and… on his last visit abroad… brought back with him…the chief of a famous tribe…   *His* name is Great Bu…   He’s been suffering from sleeping sickness…and he has obviously just woken…because, as you heard, “Great Bu’s up”.

 

What, is the relevance of all this? Yesterday we heard the ECB’s Draghi explain why six months after ending QE and talking of rates going up, he is now open to rate cuts and more QE, and never mind rules that say he can’t buy more bonds. The reason for the complete U-turn? “Great Bu’s up”, basically. Yes, there was technobabble about forward guidance being enhanced by “adjust[ing] its bias and its conditionality to account for variations in the adjustment path of inflation,” which was enough to make anyone suffer from sleeping sickness. But basically, inflation is as down as ‘Bu’ is up, and so are bond yields, to below zero in fact, in new European countries at longer maturities than ever been experienced before. Mr. Draghi – you win a negative-yielding inheritance from those elderly relatives….and an attack from President Trump for allowing too much policy stimulus! This is a “Great Bu’s-t up” that drags us into even weirder places.

Of course, the ECB follow the RBA, who are not even funny because we can see the punchline coming. Their “Great Bu’s up” for another rate cut promised “sooner rather than later” is that unemployment now conveniently needs to be below 4.5%…just as the housing market slumps.

Today we are all going to hear the Fed tell their own “Great Bu’s up” to explain why they are about to cut rates when unemployment is so low; job gains are still reasonable for this stage in the cycle; key data is far from dire on the surface; and equities are close to all-time highs. Yes, they can point to the bond market. However, what “Great Bu” can the Fed offer to explain why for the past 18 months it is *them* who have been suffering from sleeping sickness? And how do they explain it was President Trump–who “twists and turns like a twisty-turny thing” to quote Edmund’s drinking opponent Lord Melchett–who was right about rates when all their models and experts were wrong? Surely it’s all coincidence that yesterday we got a news report that the White House had considered “demoting” Fed Chair Powell in February(?) In short, expect lots of po-faced technobabble, and po-faced copy-and-paste analysts will write up how reasonable it all sounds. Yet the long and the short of it is that this is, like Blackadder II, a classic farce.

It’s even more farcical when one considers Trump is twisty-turny enough that now he will be having an extended meeting Xi at the G20 after a phone call with him. Perhaps Xi, who as we are endlessly told “wants a trade deal”, is visiting North Korea’s Kim tomorrow: will he be putting in a good word on the nuclear front for Trump as a quid pro quo or co-ordinating positions vs. the US? We shall see. (NB, We still deeply remain sceptical of any real trade breakthroughs.)

Trump also managed to twist and turn enough yesterday that recent Iranian attacks on oil tankers aren’t important enough for a US counter-attack on Tehran, only holding nukes is according to Trump – you know, the things that Kim already has. So no bombing in the Middle East today at least, thankfully; but a further sign that Trump, often called dangerous by his critics, is actually more war averse than many past US presidents. (Which will no doubt be noted for future reference by those choking on US sanctions and tariffs, as we mentioned earlier this week).

In short, it’s mainly reasons for optimism in terms of key news–trade, Iran, and even the moderate Rory Stewart is the most likely challenger to Boris Johnson after the second round of the Tory leadership contest!–but nonetheless the backdrop right now is of an underlying central-bank promise of lower, and negative, rates for ever…and a race to who gets there fastest.

Perhaps central banks hope that if they promise markets enough liquidity we won’t ask probing questions about if they really know what they are doing or not or, as Blackadder does when sozzled, to point an accusatory finger saying “*I* know who you are! You are Merlin the Happy Pig!!!” Instead, they hope we will all get completely sloshed, as at the end of “Beer”, and end up in a pile singing “See the little goblin, see his little feet / And his little nosy-wose — isn’t the goblin sweet?”

The equity markets already are!

end

Illinois farming is now in a mess as farmers have given up onplanting

(courtesy Mac Slavo/SHFTPlan.com)

Illinois Farmers Have “Given Up” On Planting

Authored by Mac Slavo via SHTFplan.com,

Farmers in Illinois whose land has been thrashed by flooding have given up on planting.  Instead of growing food, they decided to throw a party. And who could blame them?

The storms that have caused major flooding in Illinois have forced farmers to give up on their crops. Forecasts for even more rain also sent corn futures to a 5-year-high, bringing the food crisis ever closer to reality. Few farmers will even see a benefit from the higher prices because they can’t even get their corn planted in the ground.

 

Dozens of corn farmers and those who sell them seed, chemicals, and equipment gathered on Thursday at the restaurant in Deer Grove, Illinois, after heavy rains caused unprecedented delays in planting this year and contributed to record floods across the central United States, according to a report by ReutersRather than focus on the abysmal farming year, they decided to party instead.

The storms have left millions of acres unseeded in the $51 billion U.S. corn market and put crops that were planted late at a greater risk for damage from severe weather during the growing season. Together, the problems heap more pain on a farm sectorthat has suffered from years of low crop prices and a U.S.-China trade war that is slowing agricultural exports.

“It’s A Disaster Like I’ve Never Seen Before”: 2019 Could Be The Worst Year EVER For U.S. Corn Farmers

James McCune, a farmer from Mineral, Illinois, was unable to plant 85% of his intended corn acres and wanted to commiserate with his fellow farmers by hosting the “Prevent Plant Party” at The Happy Spot. He invited them to swap stories while tucking into fried chicken and a keg of beer in Deer Grove, a village of about 50 people located 120 miles (193 km) west of Chicago. –Reuters

Regardless of the news, it isn’t looking good for farmers in America. Already dealing with the political ramifications of the trade warbankruptcies and suicides at record levels, farmers are now devastated by destructive weather. All things considered, farmers are expected to harvest the smallest corn crop in four years nationwide, according to the U.S. Department of Agriculture. The agency last week reduced its planting estimate by 3.2% from May and its yield estimate by 5.7%. Farmers think more cuts are likely as the late-planted crop could face damage from hot summer weather and an autumn frost.

Because of the flooding and problems in the farming sector, there’s no time like the present to learn to grow your own food. It’s a vital skill when preparing for any catastrophe.

END

(COURTESY MICHAEL SNYDER)

Torrential Rain Of Biblical Proportions” Is Causing Immense Devastation For Midwest Farmers

Authored by Michael Snyder via The End of The American Dream blog,

The wettest 12 months in all of U.S. history was followed by the second wettest May on recordand for some parts of the Midwest the month of June will be even worse.

Some portions of Ohio and Indiana have gotten 10 more inches of rain since Friday, and more rain is literally falling on the Midwest as I write this article.  When I describe what we have witnessed as “torrential rain of Biblical proportions”, I am not exaggerating even a little bit.  Even before we got to the month of June, farmers in the middle of the country were already dealing with a disaster unlike anything that they had ever experienced before.  And just when everyone thought that it couldn’t possibly get any worse, it did.  Since Friday, the rainfall totals in the Ohio Valley have been staggering

As much as 10 inches of rain has fallen in the Ohio Valley since Friday, causing flooding, necessitating water rescues and creating a mudslide near Lexington, Kentucky.

Parts of southern Indiana have seen 10 inches of rain, while up to half a foot fell in parts of Ohio. Other parts of Kentucky have reported 5 inches.

More rain is coming for the rest of the week, and that is exceptionally bad news for Midwest farmers.

At this point, millions of acres that farmers had intended to plant with corn will go completely unused.  And according to a Washington Post article that was republished by MSN, corn futures are surging because traders are anticipating “an impending shortage” of corn…

Ohio trailed behind, with 68 percent of its corn planted, South Dakota had 78 percent, and Michigan and Indiana each had 84 percent of their hoped-for acres planted. Last week, the USDA lowered the projected total yield to 13.68 billion bushels (last year’s corn yield was 14.3 billion bushels). And as of Monday, in anticipation of an impending shortage, corn futures continued to trade at their highest level since June 2014.

I know that the USDA is projecting that somehow we will get to 13.68 billion bushels of corn, but a lot of experts are convinced that the USDA’s reduced projection is still wildly optimistic.

In some parts of the heartland, it literally looks like a hurricane just came through.  When Ohio Department of Agriculture Director Dorothy Pelanda recently toured farms in her state, she saw fields that were “filled with water and weeds instead of crops”

“I visited with several farmers this week and saw firsthand the impact of this devastating rainfall. Fields are visibly filled with water and weeds instead of crops,” states Ohio Department of Agriculture Director Dorothy Pelanda in the press release.

And for Ohio farmer Charles Kettering, hundreds of acres that he recently planted with corn and soybeans can’t be seen at all because they are currently underwater

As much as a third of the 800 acres of corn and soybeans that Kettering planted a few weeks ago is currently underwater. The chances of that part of his crop surviving are next to nothing. As little as a full day underwater is enough to kill off whatever he planted. The deluge of heavy rain in late May and early June flooded much of the area’s fertile farmland, including Kettering’s acreage, which sits in the bottom of a valley.

As a result of the flooding here in June, the Ketterings will lose approximately $100,000.

Could you imagine how you would feel if you were suddenly hit with a financial loss of that magnitude?

Other farmers will be hit with huge losses at the end of the season when yields are way down.  Thanks to the absolutely horrific weather, it is being projected that yields could be down by more than 50 percent for some Ohio farmers…

For those planting corn in June, yield losses are likely—even if the grower has switched to a shorter-season variety, said Peter Thomison, a corn field specialist with CFAES. The losses hinge on growing conditions after planting, but they could be more than 50% for some farmers, he said.

In the end, there is no way that we are going to come anywhere close to the 14.3 billion bushels of corn that was harvested in the U.S. last year, and that is going to have ripple effects that are going to last for a very long time.

For many Midwest farmers, this will be their last year in operation.  Farm bankruptcies had already risen to the highest level since the last recession even before all of this rain, and this unprecedented disaster will be the final nail in the coffin for a lot of farms that have been teetering on the brink.

According to one recent survey, it is expected that the number of farm loan defaults over the next year will be double what we saw in 2017

Midwestern bankers are tightening the purse strings on farm credit lines amid some of the toughest financial times for farmers in decades.

A survey of bank CEOs by Creighton University’s Heider College of Business found they expect the percentage of farm loan defaults over the next 12 months in a number of Midwestern states, including Illinois, to be double the default rates for 2017.

I keep warning that our planet is becoming increasingly unstable and that global weather patterns are changing dramatically.  Midwest farmers are desperately hoping for some drier weather, but instead a lot more rain is coming

Rain is in the forecast every day this week until Friday, and then we have a break over the weekend with more rain coming in Tuesday, Wednesday, Thursday of next week.

The true scope of this crisis will not be fully known until harvest time rolls around, but right now the outlook for U.S. agricultural production in 2019 is exceedingly grim.

Perhaps things will soon dry out and we will have picture perfect weather for the rest of the growing season.  If that happens, it will definitely help matters greatly.

But there is also the possibility that Midwest farmers could be hammered by extreme rain, extreme heat and/or an early frost.

Sadly, at this point it certainly wouldn’t take very much to turn an exceedingly bad growing season into a catastrophic one.

Interesting:  25% of Americans are now :”worse off” than they were before the great recession. Kind of kills the Trump narrative that the economy is booming

(courtesy Mac Slavo).

25% Of Americans Are “Worse Off” Than They Were Before The Great Recession

Authored by Mac Slavo via SHTFplan.com,

For many, the economic recovery being touted by the mainstream media has not yet affected them. About 25% of Americans say that a decade after the housing bust that caused the Great Recession, they are doing worse. Almost half of Americans are not doing any better at all too.

If you believe the mainstream media, the economy is robust and the unemployment rate is at a 49-year-low. But not all Americans have recovered from the Great Recession.  According to a new survey from Bankrate of about 3,000 Americans, 23% of people who were adults when the recession started in December 2007 say they are now financially worse off than they were before the recession hit. That percentage amounts to just under 50 million Americans. Another 25% say they are doing the “same.” In all, just over half believe their “overall finances” are better than before

 

“Americans were and continue to be in a degree of denial of the financial crisis and Great Recession,” said Mark Hamrick, Bankrate’s senior economic analyst according to a report by Yahoo Finance. “One of the constant themes that presents itself in the data is that Americans are still digging out in many ways from that experience.”

“While some have managed to prosper in the decade since, there are still tens of millions who are struggling to even get back to where they were before the economy took a turn for the worse,” added Hamrick.

Could that mean that the economy is not all that robust? We certainly think so. But speaking the truth is a revolutionary act in times of deceit.

When asked about their salaries, less than half of the respondents said their wages were better than before, while more than a third say that it is worse. But if you’re a millennial (29-38) you’re in luck: Only 16% of this demographic who were adults during the Great Recession say their pay is worse now. That’s compared to 26% of baby boomers (aged 55-73). “If you take this data at face value — where less than half of the adult population say that their pay is better — and most indicate it is not better, that tells you enough and raises enough of a question about the true improvement that Americans have experienced,” Hamrick said.

But some have been questioning this economy for a while now.  It is heavilymanipulated by the Federal Reserve and the government is doing nothing to prevent the devaluation of the dollar or inflation. For this reason, we have taken to suggesting financial preparation as incredibly important to consider at this time.  Storing food and water will always be good ideas, however, we should take the time to get our finances straightened out as well. There are several ways to go about it, but an easy to follow plan is Dave Ramsey’s “baby steps.” He suggests paying down your debts and has often said he “hates debt more than anyone.”

END
My goodness:  they finally agree on something…a deal on Trump  border funding
(courtesy zerohedge)

Senators Reach Bipartisan Deal On Trump Border Funding

In what appears to be a win for President Trump, a bipartisan agreement has been reached in the Senate Appropriations Committee on a $4.6 billion funding package to address the “humanitarian crisis” at the southern border with Mexico.

CNN reports that the agreement, according to three people familiar with the deal, between Chairman Richard Shelby, an Alabama Republican, and Vermont Sen. Patrick Leahy, the top Democrat on the panel, includes $2.88 billion for the Department of Health and Human Services to be directed to the Office of Refugee Resettlement, which administration officials warned lawmakers would run out of money by the end of this month without the emergency cash infusion.

The Committee will reportedly mark up the agreement on Wednesday and Senate Majority Leader Mitch McConnell has said he plans to put it on the Senate floor by the end of next week.

 

Of course there is one hitch to all of this… The House (where, as Bloomberg notes, Democrats have sought to ensure that funds in the package wouldn’t be used to build Trump’s border wall or pay for raids on undocumented immigrants within the US).

As Bloomberg notesThe House plans to vote on a separate border package next week, according to Representative Henry Cuellar, a Texas Democrat who has become a point person on the issue for Speaker Nancy Pelosi.

If that plan differs from the Senate effort, the House and Senate could convene a conference committee to work out the differences.

Which means it won’t see the light of day as it appears, despite much begging for money and assistance from the left, the public face of the Democratic House refuses to admit there is any illegal immigration crisis whatsoever.

END

Another headache for Boeing:  the crank is too hard for pilots to pull.

(zerohedge)

Boeing’s Newest Problem: Pilots Are Too Weak To Use The Cockpit Hand-Crank

One of the biggest flaws keeping Boeing’s 737 MAX 8 grounded has nothing to do with AI and advanced flight-control software. Instead, it’s an issue of whether all pilots will have enough upper body strength to turn a crank – a surprisingly low-tech hangup in a scandal that was catalyzed by malfunctioning software.

Boeing

Boeing has scrambled to redesign the 737 MAX and its software to eliminate the safety flaws that contributed to the crash landings of two jets in under six months from October to March. All told, 346 people died after the 737’s MCAS anti-stall software misfired, driving the planes into deadly downward spirals.

Now, the latest obstacle for Boeing, which hadn’t been reported before WSJ published a story on Wednesday morning, appears to be convincing regulators that all pilots will possess the upper body strength to turn a crank that controls a panel in the rear of the plane. That panel, in turn, can change the angle of the plane’s nose, potentially saving it from the types of malfunctions that afflicted the two planes that crashed. Apparently, during times of crisis, when the plane is moving unusually fast at an unusually steep angle, the crank can become extremely difficult to move.

What’s worse for Boeing, not only is this safety procedure part of the 737 MAX 8, but its also present in the 6,000+ 737s from the prior generation of planes which are also in service. The question is whether regulators will request that this issue be fixed on those planes, too. The issue, according to WSJ, has prompted a reassessment of safety conditions across all Boeing planes.

All of the 737 MAX’s underlying safety issues must be resolved before the FAA will unground the planes. At this point, Boeing is considering operational, training and pilot manual changes to resolve safety concerns (though, to be sure, there are no plans to restrict which pilots are allowed to fly what planes, based on sex, because that would be extremely sexist). Not that we need to tell you that.

With Boeing finding the first new buyer for its 737 MAX at the Paris Air Show, the company is probably optimistic that the day when the planes will be re-certified will soon arrive.

END
Seems that Tucker Carlson has the President’s ear on Iran.  I myself believe it is not necessary to attack Iran now..they are bleeding internally for quite some time.  Thus more sanctions will hurt them in the pocketbook
(courtesy zerohedge)

Fox’s Tucker Carlson Privately Advising Trump Against War With Iran: Report

A surprising headline from the Daily Beast suggests President Trump could be bucking his own administration hawks on Iran with help from an outside source: “Tucker Carlson Is Privately Advising Trump On Iran” — the headline reads.

Over and against uber-hawks John Bolton and Mike Pompeo, the report says “there’s been another, far different voice in the president’s ear: that of Fox News host Tucker Carlson.”

For at least the past year Tucker Carlson has been a rare, outspoken non-interventionist voice on prime time network news, aggressively questioning US military presence and past regime change actions in places like Syria, Afghanistan, Libya, Yemen, as well as Washington’s long-time weapons sales to Saudi Arabia. He’s come under fire from Republican neocons and Democratic hawks alike for frequently hosting foreign policy skeptics like Tulsi Gabbard, Glenn Greenwald, Rand Paul, and others.

Carlson recently even questioned mainstream media claims that Syria’s Assad is gassing his own people, presenting leaked evidence that suggests the rebels could be staging such atrocities to draw the US military into action against Damascus.

And now, apparently the president is relying on Carlson as a dissenting voice against the foreign policy establishment at a moment of soaring tensions with Iran, according to the Daily Beast:

A source familiar with the conversations told The Daily Beast that, in recent weeks, the Fox News host has privately advised Trump against taking military action against Iran. And a senior administration official said that during the president’s recent conversations with the Fox primetime host, Carlson has bashed the more “hawkish members” of his administration.

The popular Fox host has publicly pushed back against the march to war against Iran in recent weeks, saying an escalation and war scenario would likely not be “in anyone’s interest,” while also being a persistent critic of Bolton for his well-known hawkish rhetoric on Iran.

The Daily Beast report further points out that Carlson has lately question the administration’s “evidence” that Iran was behind last week’s tanker attacks in the Gulf of Oman:

The Fox News host compared Pompeo’s “misplaced certainty” that Iran attacked the tankers to former Secretary of State Colin Powell’s now-discredited claim that Iraq possessed weapons of mass destruction.

“We’re still paying a price for that,” Carlson said.

As the report also notes, Trump has personally tweeted out content from Carlson’s Fox show, Tucker Carlson Tonight, on at least 20 separate occasions over the past year.

Last year Carlson predicted that another disastrous regime change war in the Middle East would destroy the Trump presidency…

“Washington loves… pointless wars half a world away. Contractors get rich, neocon intellectuals feel powerful.” 

The report further cites what “one knowledgeable source” told The Daily Beast in August, that, “Trump thinks Tucker is one of the sharpest minds on television — [Trump has said], ‘So smart, a thinking man’s show.’”

Could Tucker Carlson be in the process of convincing Trump to return to his non-interventionist instincts voiced on the campaign trail in 2016?

Has Tucker been brought in as Trump’s private counsel to push back against the pervasive influence of the military-industrial deep state?

end

SWAMP STORIES

A democrat Congressman states that Mueller will testify.  I extremely doubt it. It will be far worse for the democrats.

(zerohedge)

“He Will Get Subpoenaed”: Congressman Assures ‘Triggered’ Joe Scarborough That Mueller Will Testify

“It’s going to happen. He will get subpoenaed.”

Those were the words of Rep. Jim Himes just one day after House Intelligence Chairman Adam Schiff warned that “time is running out” to get Robert Mueller on the hill to testify, according to Mediaite.

He made them on an episode of Morning Joe where host Joe Scarborough spent a majority of the show screaming and raving about what an “outrage” it was that Mueller had not yet testified, despite Mueller having previously said “my testimony is in the report”.

Scarborough screamed at Himes during the interview:

“I want to know why Robert Mueller thinks he’s above coming to Capitol Hill and testifying for Americans? It’s outrageous! I want to know something else, Jim. Why don’t you subpoena him? This is absolutely ridiculous.”

In return, Himes said:

“Two things to say: Number one, it’s going to happen. He will get subpoenaed. Look, we have a profound interest inside the intelligence committee in hearing about something we have not heard about nearly enough.”

Himes continued:

“The other thing which you’re talking about so animatedly is getting Bob Mueller, for all of the reasons you state, getting Bob Mueller simply to say what he said in the report, which by the way he said he would do. He said my testimony is in that report. But as you pointed out, not an awful lot of people got through the 500 pages. There is a virtue on that. You’re being pretty tough on Bob Mueller here. I do not blame him for not wanting to join the partisan fray. But you know this man. He’s a patriot. Will he do what he’s asked to do.”

As Scarborough continued to rant, Himes, a Democrat, concluded: “Take the coffee cup away from Joe.”

end

 

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

Well that about does it for tonight

I will see you on THURSDAY night

H

 

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