JULY 20/GOLD CLOSED DOWN $8.80 TO $1703.05//SILVER WAS DOWN 2 CENTS TO $18.78//PLATINUM WAS DOWN $12.20 TO $863.05//PALLADIUM WAS DOWN $2.25 TO $1868.10//COVID UPDATES//VACCINE IMPACT/DR PAUL ALEXANDER INTERVIEWS DR GERRT VANDENBOSSCHE: A MUST VIEW//CHINA WITNESSES A HUGE SPIKE IN OMICRON INFECTIONS//BIG NEWS OF THE DAY: GAZPROM WILL RESUME GAS PRODUCTION TO EUROPE BUT AT A RESCUED CAPACITY—MAYBE AT 20%// EU RESPONDS BY DEMANDING A 15 CUT IN CONSUMPTION//A MUST READ JIM REID (DEUTSCHE BANK) ON THE GAZPROM GAS SAGA//UPDATES ON ITALY//HOUSING STARTS IN THE USA PLUMMET//SWAMP STORIES FOR YOU TONIGHT///

by harveyorgan · in Uncategorized · Leave a comment·Edit

by harveyorgan · in Uncategorized · Leave a comment·Edit

GOLD;  $1703.05 DOWN $8.80 

SILVER: $18.76 DOWN 2 CENTS 

ACCESS MARKET: 

GOLD $1696.70

SILVER: $18.68

Bitcoin morning price:  $23,504 UP 122

Bitcoin: afternoon price: $23,707. UP 326 

Platinum price: closing DOWN $12.20 to $863.05

Palladium price; closing DOWN $2.35  at $1868.10

END

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 EXCHANGE: COMEX

EXCHANGE: COMEX
CONTRACT: JULY 2022 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,710.000000000 USD
INTENT DATE: 07/19/2022 DELIVERY DATE: 07/21/2022
FIRM ORG FIRM NAME ISSUED STOPPED


118 C MACQUARIE FUT 100
167 C MAREX 29
435 H SCOTIA CAPITAL 30
624 H BOFA SECURITIES 1547
661 C JP MORGAN 30 1702
690 C ABN AMRO 25
880 C CITIGROUP 1


TOTAL: 1,732 1,732
MONTH TO DATE: 9,214

no. of contracts issued by JPMorgan: 1732/9204 

_____________________________________________________________________________________

NUMBER OF NOTICES FILED FOR JULY CONTRACT:  1732 NOTICES FOR 173,200 OZ //15.387 TONNES

total notices so far: 9214 contracts for 921,400 oz (28.659 tonnes) 

SILVER NOTICES:  

122 NOTICES FILED FOR 610,000 OZ/

 

total number of notices filed so far this month  3272 :  for 16,060,000  oz



END

Russia is a major supplier of silver to London while Mexico supplies the COMEX

With the sanctions, London has no way to obtain silver other than compete with NY.

GLD

WITH GOLD DOWN $8.80 

WITH RESPECT TO GLD WITHDRAWALS:  (OVER THE PAST FEW MONTHS):

GOLD IS “RETURNED” TO THE BANK OF ENGLAND WHEN CALLING IN THEIR LEASES: THE GOLD NEVER LEAVES THE BANK OF ENGLAND IN THE FIRST PLACE. THE BANK IS PROTECTING ITSELF IN CASE OF COMMERCIAL FAILURE

ALSO INVESTORS SWITCHING TO SPROTT PHYSICAL  (phys) INSTEAD OF THE FRAUDULENT GLD//

HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 5.22

TONNES FROM THE GLD///

INVENTORY RESTS AT 1009.06 TONNES

Silver//SLV

WITH NO SILVER AROUND AND SILVER DOWN 2 CENTS

AT THE SLV// ://HUGE CHANGES IN SILVER INVENTORY AT THE SLV//:A WITHDRAWAL OF 8.253 MILLION OZ FROM THE SLV//

INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV

CLOSING INVENTORY: 507.585 MILLION OZ

Let us have a look at the data for today

SILVER//OUTLINE


SILVER COMEX OI FELL BY  A HUGE SIZED 1450  CONTRACTS TO 145,248   AND FURTHER FROM  THE NEW RECORD OF 244,710, SET FEB 25/2020 AND THE HUGE LOSS IN OI WAS ACCOMPLISHED WITH OUR  $0.14 LOSS  IN SILVER PRICING AT THE COMEX ON TUESDAY.  OUR BANKERS WERE UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT FELL BY $0.14) AND WERE SUCCESSFUL IN KNOCKING OFF SOME COMMERCIAL SILVER LONGS//BUT MAINLY WE HAD ADDITIONAL SPECULATOR ADDITIONS AS WE HAD A STRONG LOSS OF 1264 CONTRACTS ON OUR TWO EXCHANGES.

WE  MUST HAVE HAD: 
I) HUGE SPECULATOR SHORT ADDITIONS /. II)  WE ALSO HAD  SOME  REDDIT RAPTOR BUYING//.   iii)  A SMALL ISSUANCE OF EXCHANGE FOR PHYSICALS iiii) A POOR INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 15.220 MILLION OZ FOLLOWED BY TODAY’S 105,000 OZ QUEUE JUMP  / //  V)    HUGE SIZED COMEX OI LOSS

 I AM NOW RECORDING THE DIFFERENTIAL IN OI FROM PRELIMINARY TO FINAL: 


THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI SILVER TODAY: CONTRACTS  : -1

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS  JULY. ACCUMULATION FOR EFP’S SILVER/JPMORGAN’S HOUSE OF BRIBES/STARTING FROM FIRST DAY/MONTH OF JULY: 

TOTAL CONTACTS for 13 days, total 11,507  contracts:  57.535 million oz  OR 4.423 MILLION OZ PER DAY. (885 CONTRACTS PER DAY)

TOTAL EFP’S FOR THE MONTH SO FAR: 57.535 MILLION OZ

.

LAST 15 MONTHS TOTAL EFP CONTRACTS ISSUED  IN MILLIONS OF OZ:

MAY 137.83 MILLION

JUNE 149.91 MILLION OZ

JULY 129.445 MILLION OZ

AUGUST: MILLION OZ 140.120 

SEPT. 28.230 MILLION OZ//

OCT:  94.595 MILLION OZ

NOV: 131.925 MILLION OZ

DEC: 100.615 MILLION OZ 

JAN 2022//  90.460 MILLION OZ

FEB 2022:  72.39 MILLION OZ//

MARCH: 207.430  MILLION OZ//A NEW RECORD FOR EFP ISSUANCE AND WE ARE STILL GOING STRONG THIS MONTH.

APRIL: 114.52 MILLION OZ FINAL//LOW ISSUANCE

MAY: 105.635 MILLION OZ//

JUNE: 94.470 MILLION OZ

JULY : 57.535 MILLION OZ

RESULT: WE HAD A HUGE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1450 WITH OUR   $0.14 LOSS IN SILVER PRICING AT THE COMEX// TUESDAY.,.  THE CME NOTIFIED US THAT WE HAD A SMALL  SIZED EFP ISSUANCE  CONTRACTS: 185 CONTRACTS ISSUED FOR SEPT AND 0 CONTRACTS ISSUED FOR ALL OTHER MONTHS) WHICH  EXITED OUT OF THE SILVER COMEX  TO LONDON  AS FORWARDS    THE DOMINANT FEATURE TODAY: /HUGE BANKER SHORT COVERING AS THEY GET OUT OF DODGE//// WE HAVE A POOR INITIAL SILVER OZ STANDING FOR JUNE. OF 15.22 MILLION  OZ FOLLOWED BY TODAY’S QUEUE JUMP  OF 105,000 OZ  //  .. WE HAD A STRONG SIZED LOSS OF 1265 OI CONTRACTS ON THE TWO EXCHANGES FOR 6.322 MILLION  OZ WITH THE  LOSS IN PRICE..

 WE HAD 122  NOTICES FILED TODAY FOR  610,000 OZ

THE SILVER COMEX IS NOW BEING ATTACKED FOR METAL BY LONDONERS ET AL.

GOLD//OUTLINE

IN GOLD, THE COMEX OPEN INTEREST FELL  BY A   STRONG SIZED 6,966 CONTRACTS  TO 524,786 AND FURTHER FROM THE RECORD (SET JAN 24/2020) AT 799,541 AND  PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110.

THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI IN GOLD TODAY: -192 CONTRACTS.

.

THE STRONG SIZED  DECREASE  IN COMEX OI CAME WITH OUR TINY FALL IN PRICE OF $0.35//COMEX GOLD TRADING/TUESDAY / WE MUST HAVE  HAD  ADDITIONAL SPECULATOR SHORT ADDITION ACCOMPANYING OUR HUMONGOUS SIZED EXCHANGE FOR PHYSICAL ISSUANCE. WE HAD ZERO LONG LIQUIDATION   //AND SOME SPECULATOR SHORT ADDITIONS 

WE ALSO HAD A HUGE INITIAL STANDING IN GOLD TONNAGE FOR JULY AT 2.914 TONNES ON FIRST DAY NOTICE FOLLOWED BY TODAY’S QUEUE JUMP OF 1680,200 OZ 

YET ALL OF..THIS HAPPENED WITH OUR TINY FALL IN PRICE OF   $0.35 WITH RESPECT TO TUESDAY’S TRADING

WE HAD A FAIR SIZED LOSS OF 3079  OI CONTRACTS 9.577 PAPER TONNES) ON OUR TWO EXCHANGES..

E.F.P. ISSUANCE

THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A FAIR SIZED  3695  CONTRACTS:

The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 524,786

IN ESSENCE WE HAVE A FAIR  SIZED DECREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 3079 CONTRACTS  WITH 6,774 CONTRACTS DECREASED AT THE COMEX AND 3695 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI LOSS ON THE TWO EXCHANGES OF 3079 CONTRACTS OR 9.577 TONNES.

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES

WE HAD A FAIR SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (3,695) ACCOMPANYING THE STRONG SIZED LOSS IN COMEX OI (6,966): TOTAL LOSS IN THE TWO EXCHANGES  3,271 CONTRACTS. WE NO DOUBT HAD 1) SOME SPECULATOR SHORT ADDITIONS  ,2.) STRONG INITIAL STANDING AT THE GOLD COMEX FOR JULY. AT 2.914 TONNES FOLLOWED BY TODAY’S 168,200 OZ QUEUE JUMP   3) SOME LONG LIQUIDATION//CONSIDERABLE SPECULATOR SHORT ADDITIONS/ //.,4)   STRONG SIZED COMEX OPEN INTEREST LOSS 5) FAIR ISSUANCE OF EXCHANGE FOR PHYSICAL/

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2022 INCLUDING TODAY

JULY

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JULY :

81,828 CONTRACTS OR 8182,800 OZ OR 254.51  TONNES 13 TRADING DAY(S) AND THUS AVERAGING: 6294 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE  SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 13  TRADING DAY(S) IN  TONNES: 254/51 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2021, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS  254.51/3550 x 100% TONNES  7.18% OF GLOBAL ANNUAL PRODUCTION

ACCUMULATION OF GOLD EFP’S YEAR 2021 TO 2022 

JANUARY/2021: 265.26 TONNES (RAPIDLY INCREASING AGAIN)

 FEB  :  171.24 TONNES  ( DEFINITELY SLOWING DOWN AGAIN).. 

MARCH:.   276.50 TONNES (STRONG AGAIN/

APRIL:      189..44 TONNES  ( DRAMATICALLY SLOWING DOWN AGAIN//GOLD IN BACKWARDATION)

MAY:        250.15 TONNES  (NOW DRAMATICALLY INCREASING AGAIN)

JUNE:      247.54 TONNES (FINAL)

JULY:        188.73 TONNES FINAL

AUGUST:   217.89 TONNES FINAL ISSUANCE.

SEPT          142.12 TONNES FINAL ISSUANCE ( LOW ISSUANCE)_

OCT:           141.13 TONNES FINAL ISSUANCE (LOW ISSUANCE)

NOV:           312.46 TONNES FINAL ISSUANCE//NEW RECORD!! (INCREASING DRAMATICALLY)//SIGN OF REAL STRESS//SURPASSING THE MARCH 2021 RECORD OF 276.50 TONNES OF EFP

DEC.           175.62 TONNES//FINAL ISSUANCE// 

JAN:2022   247.25 TONNES //FINAL

FEB:           196.04 TONNES//FINAL

MARCH:  409.30 TONNES INITIAL( THIS IS NOW A RECORD EFP ISSUANCE FOR MARCH AND FOR ANY MONTH.

APRIL:  169.55 TONNES (FINAL VERY  LOW ISSUANCE MONTH)

MAY:  247,44 TONNES FINAL// 

JUNE: 238.13 TONNES  FINAL

JULY: 254.51 TONNES (HUGE INCREASE FROM JUNE//WILL CLOSE IN ON THE RECORD EFP ISSUANCE IN MARCH 22) 

SPREADING OPERATIONS

(/NOW SWITCHING TO GOLD) FOR NEWCOMERS, HERE ARE THE DETAILS

SPREADING LIQUIDATION HAS NOW COMMENCED   AS WE HEAD TOWARDS THE  NEW ACTIVE FRONT MONTH OF JUNE. WE ARE NOW INTO THE SPREADING OPERATION OF SILVER

HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR ;MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE    NON ACTIVE DELIVERY MONTH OF JUNE HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF JULY, FOR SILVER:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST  STARTS TO RISE BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN 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.”

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

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

1.Today, we had the open interest at the comex, in SILVER, FELL BY A STRONG SIZED 1450 CONTRACT OI TO 145,248 AND FURTHER FROM  OUR COMEX RECORD //244,710(SET FEB 25/2020).  THE LAST RECORDS WERE SET  IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT 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  5 YEARS AGO.  

EFP ISSUANCE 185 CONTRACTS

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

SEPT 185  ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE:411 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  COMEX OI LOSS OF 1450  CONTRACTS AND ADD TO THE 185 OI TRANSFERRED TO LONDON THROUGH EFP’S,

WE OBTAIN A HUGE SIZED LOSS OF 1265   OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. 

THUS IN OUNCES, THE LOSS  ON THE TWO EXCHANGES 6.322 MILLION OZ

OCCURRED DESPITE OUR SMALL DROP IN PRICE OF  $0.14

OUTLINE FOR TODAY’S COMMENTARY

1/COMEX GOLD AND SILVER REPORT

(report Harvey)

2 ) Gold/silver trading overnight Europe,

(Peter Schiff,

end

3. Egon von Greyerz///Matthew Piepenburg via GoldSwitzerland.com,

4. Chris Powell of GATA provides to us very important physical commentaries

end

5. Other gold commentaries

6. Commodity commentaries//

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING// TUESDAY  NIGHT

 SHANGHAI CLOSED UP 25.29 PTS OR 0.77%   //Hang Sang CLOSED UP 229.16 OR 1.11%    /The Nikkei closed UP 718.58 OR % 2.67.          //Australia’s all ordinaires CLOSED UP 1.78%   /Chinese yuan (ONSHORE) closed DOWN AT 6.75500    /Oil UP TO 102.48 dollars per barrel for WTI and UP TO 105.80 for Brent. Stocks in Europe OPENED  ALL RED        //  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.7550 OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7570: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER 

a)NORTH KOREA/SOUTH KOREA

outline

b) REPORT ON JAPAN/

OUTLINE

3 C CHINA

OUTLINE

4/EUROPEAN AFFAIRS

OUTLINE

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

OUTLINE

6.Global Issues

OUTLINE

7. OIL ISSUES

OUTLINE

8 EMERGING MARKET ISSUES

 COMEX DATA//AMOUNTS STANDING//VOLUME OF TRADING/INVENTORY MOVEMENTS

GOLD

LET US BEGIN:

THE TOTAL COMEX GOLD OPEN INTEREST FELL BY A STRONG SIZED 6,966 CONTRACTS TO 524,786 AND FURTHER FROM THE RECORD THAT WAS SET IN JANUARY/2020: {799,541  OI(SET JAN 16/2020)} AND  PREVIOUS TO THAT: 797,110 (SET JAN 7/2020). AND THIS STRONG  COMEX DECREASE OCCURRED WITH OUR FALL OF $0.35  IN GOLD PRICING TUESDAY’S COMEX TRADING. WE ALSO HAD A  HUGE SIZED EFP (17,058 CONTRACTS). . THEY WERE PAID HANDSOMELY  NOT TO TAKE DELIVERY AT THE COMEX AND SETTLE FOR CASH. IT NOW SEEMS THAT THE COMMERCIALS HAVE GOADED THE SPECS TO GO SHORT BIG TIME AND THEY ADDED TO THEIR SHORT POSITIONS

WE NORMALLY HAVE WITNESSED  EXCHANGE FOR PHYSICALS ISSUED BEING SMALL AS IT JUST TOO COSTLY FOR THEM TO CONTINUE SERVICING THE COSTS OF SERIAL FORWARDS CIRCULATING IN LONDON. HOWEVER, MUCH TO THE ANNOYANCE OF OUR BANKERS, THE COMEX IS THE SCENE OF AN ASSAULT ON GOLD AS LONDONERS, NOT BEING ABLE TO FIND ANY PHYSICAL ON THAT SIDE OF THE POND, EXERCISE THESE CIRCULATING EXCHANGE FOR PHYSICALS IN LONDON AND FORCING DELIVERY OF REAL METAL OVER HERE AS THE OBLIGATION STILL RESTS WITH NEW YORK BANKERS. IT SEEMS THAT ARE BANKERS FRIENDS ARE EXERCISING EFP’S FROM LONDON AND NOW THEY ARE LOATHE TO ISSUE NEW ONES.

EXCHANGE FOR PHYSICAL ISSUANCE

WE ARE NOW IN THE NON  ACTIVE DELIVERY MONTH OF JULY..  THE CME REPORTS THAT THE BANKERS ISSUED A FAIR SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,

THAT IS 3695 EFP CONTRACTS WERE ISSUED:  ;: ,  . 0 AUG :3695 & ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  3695 CONTRACTS 

WHEN WE HAVE BACKWARDATION,  EFP ISSUANCE IS VERY COSTLY BUT THE REAL PROBLEM IS THE SCARCITY OF METAL AND IT IS FAR BETTER FOR OUR BANKERS TO PAY OFF INDIVIDUALS THAN RISK INVESTORS ESPECIALLY FROM LONDON STANDING FOR DELIVERY. THE LOWER PRICES IN THE FUTURES MARKET IS A MAGNET FOR OUR LONDONERS SEEKING PHYSICAL METAL. BACKWARDATION ALWAYS EQUAL SCARCITY OF METAL!

ON A NET BASIS IN OPEN INTEREST WE LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A FAIR SIZED SIZED  TOTAL OF 3,271  CONTRACTS IN THAT 17,329 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD A STRONG SIZED  COMEX OI LOSS OF 6966  CONTRACTS..AND  THIS LOSS ON OUR TWO EXCHANGES HAPPENED WITH  OUR  FALL IN PRICE OF GOLD $0.35.   

// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING JULY   (28.712),

 HERE ARE THE AMOUNTS THAT STOOD FOR DELIVERY IN THE PRECEDING 12 MONTHS OF 2021-2022:

DEC 2021: 112.217 TONNES

NOV.  8.074 TONNES

OCT.    57.707 TONNES

SEPT: 11.9160 TONNES

AUGUST: 80.489 TONNES

JULY: 7.2814 TONNES

JUNE:  72.289 TONNES

MAY 5.77 TONNES

APRIL  95.331 TONNES

MARCH 30.205 TONNES

FEB ’21. 113.424 TONNES

JAN ’21: 6.500 TONNES.

TOTAL SO FAR THIS YEAR (JAN- DEC): 601.213 TONNES

YEAR 2022:

JANUARY 2022  17.79 TONNES

FEB 2022: 59.023 TONNES

MARCH: 36.678 TONNES

APRIL: 85.340 TONNES FINAL.

MAY: 20.11 TONNES FINAL

JUNE: 74.933 TONNES FINAL

JULY 28.712 TONNES

THE BANKERS WERE SUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT FELL $0.35) BUT WERE UNSUCCESSFUL IN KNOCKING OFF SOME  SPECULATOR LONGS/COMMERCIAL LONGS BUT SPECULATOR SHORTS CONTINUED TO ADD TO THEIR POSITIONS////  WE HAVE  REGISTERED A FAIR SIZED LOSS  OF 9.577 TONNES ON TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR  GOLD TONNAGE STANDING FOR JULY (28.712 TONNES)

WE HAD -192  CONTRACTS REMOVED FROM COMEX TRADES. THESE WERE REMOVED AFTER TRADING ENDED LAST NIGHT

NET LOSS ON THE TWO EXCHANGES 3,271 CONTRACTS OR  327,100  OZ OR 10.174 TONNES

Estimated gold volume 202,897/// poor/

final gold volumes/yesterday  164,536 / poor

INITIAL STANDINGS FOR JULY ’22 COMEX GOLD //JULY 20

GoldOunces
Withdrawals from Dealers Inventory in oznil oz
Withdrawals from Customer Inventory in oz112,343.726 oz
Brinks
HSBC
Deposit to the Dealer Inventory in oznil OZ 
Deposits to the Customer Inventory, in oznil
No of oz served (contracts) today1732  notice(s)
173,200 OZ
5.387 TONNES
No of oz to be served (notices)17 contracts 1700 oz
0.05871 TONNES
Total monthly oz gold served (contracts) so far this month9214 notices
921,400 OZ
28.659 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this monthNIL oz
Total accumulative withdrawal of gold from the Customer inventory this monthxxx oz

total dealer deposit  0

No dealer withdrawals

Customer deposits: 1 

i) Into Brinks  26,731.160 oz

total deposits: 26,731.160 oz

3 customer withdrawals:

i)Out of HSBC  50,005.045 oz

ii)Out of Manfra:  30,299.921 oz

iii) Out of JPMorgan: 160,457.274 oz

total withdrawal: 240,762.240   oz

ADJUSTMENTS:0 dealer to customer

CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR JULY.

For the front month of JULY we have an  oi of 1749 contracts having GAINED 1122 contracts . We had

560 notices filed on Tuesday so we GAINED a WHOPPING 1682  contracts or an additional 168,200 oz will stand in this non active

delivery month of July.

August has a LOSS OF 11,550 contracts down to 224,545 contracts

Sept. gained 10 contracts to 2750 contracts.

We had 1732 notice(s) filed today for  173,200 oz FOR THE July 2022 CONTRACT MONTH. 


Today, 0 notice(s) were issued from J.P.Morgan dealer account and  30 notices were issued from their client or customer account. The total of all issuance by all participants equate to 1732 contract(s) of which   notices were stopped (received) by  j.P. Morgan dealer and  1702 notice(s) was (were) stopped/ Received) by J.P.Morgan//customer account and 0 notice(s) received (stopped) by the squid  (Goldman Sachs)

To calculate the INITIAL total number of gold ounces standing for the JULY /2022. contract month, 

we take the total number of notices filed so far for the month (9214) x 100 oz , to which we add the difference between the open interest for the front month of  (JULY 1749  CONTRACTS ) minus the number of notices served upon today 1732 x 100 oz per contract equals 923,100 OZ  OR 28.712 TONNES the number of TONNES standing in this  active month of July. 

thus the INITIAL standings for gold for the JULY contract month:

No of notices filed so far (9214) x 100 oz+   (1749)  OI for the front month minus the number of notices served upon today (1732} x 100 oz} which equals 921,400 oz standing OR 28.712 TONNES in this   active delivery month of JULY.

TOTAL COMEX GOLD STANDING:  28.712 TONNES  (A FAIR STANDING FOR A JULY (  NON ACTIVE) DELIVERY MONTH)

SOMEBODY IS AFTER A HUGE AMOUNT OF GOLD

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

COMEX GOLD INVENTORIES/CLASSIFICATION

NEW PLEDGED GOLD:

241,794.285 oz NOW PLEDGED /HSBC  5.94 TONNES

204,937.290 PLEDGED  MANFRA 3.08 TONNES

83,657.582 PLEDGED JPMorgan no 1  1.690 tonnes

265,999.054, oz  JPM No 2 

1,152,376.639 oz pledged  Brinks/

Manfra:  33,758.550 oz

Delaware: 193.721 oz

International Delaware::  11,188.542 o

total pledged gold:  2,443,533.842 oz   76.00 tonnes 

TOTAL OF ALL GOLD ELIGIBLE AND REGISTERED:  31,570,627.446 OZ 

TOTAL REGISTERED GOLD: 15,981,719.548  OZ

TOTAL OF ALL ELIGIBLE GOLD: 15,888,807.894 OZ  

REGISTERED GOLD THAT CAN BE SERVED UPON: 13,538,186.0 OZ (REG GOLD- PLEDGED GOLD) 421 tonnes 

END

SILVER/COMEX/JULY 20

SilverOunces
Withdrawals from Dealers InventoryNIL oz
Withdrawals from Customer Inventory84,934.870  oz
Loomis
Deposits to the Dealer Inventorynil OZ
Deposits to the Customer Inventorynil oz
No of oz served today (contracts)122CONTRACT(S)
610,000  OZ)
No of oz to be served (notices)56 contracts 
(280,000 oz)
Total monthly oz silver served (contracts)3273 contracts
 16,060,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this monthNIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

And now for the wild silver comex results


i)  0 dealer deposit

total dealer deposits:  0    oz

i) We had 0 dealer withdrawal

total dealer withdrawals:  oz

We have 0 deposits into the customer account

total deposit:  nil   oz

JPMorgan has a total silver weight: 176.879 million oz/342.347 million =51.67% of comex 

 Comex withdrawals:1

i) Out of Loomis

total withdrawal  84,934.870         oz

 adjustments: 1/dealer to customer  jpm

312,407.190 oz

the silver comex is in stress!

TOTAL REGISTERED SILVER: 61.440 MILLION OZ

TOTAL REG + ELIG. 342.347 MILLION OZ

CALCULATION OF SILVER OZ STANDING FOR JUNE

silver open interest data:

FRONT MONTH OF JULY OI: 178 CONTRACTS HAVING GAINED 8 CONTRACTS.  WE HAD 13 NOTICES FILED

ON TUESDAY, SO WE GAINED 21 CONTRACTS OR AN ADDITIONAL  105,000 OZ WILL STAND FOR METAL AT THE COMEX.

AUGUST LOST 113 CONTRACTS TO STAND AT 997

SEPTEMBER HAD A LOSS OF 1342 CONTRACTS DOWN TO 117,302

 CONTRACTS.

 .

TOTAL NUMBER OF NOTICES FILED FOR TODAY: 122 for  610,000 oz

Comex volumes:41,599// est. volume today//  poor

Comex volume: confirmed yesterday: 39,353 contracts ( poor )

To calculate the number of silver ounces that will stand for delivery in JULY we take the total number of notices filed for the month so far at 3273 x 5,000 oz = 16 060,000 oz 

to which we add the difference between the open interest for the front month of JULY(178) and the number of notices served upon today 122  x (5000 oz) equals the number of ounces standing.

Thus the  standings for silver for the JULY./2022 contract month: 3273 (notices served so far) x 5000 oz + OI for front month of JULY (178)  – number of notices served upon today (122) x 5000 oz of silver standing for the JULY contract month equates 16,645,000 oz. .

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

END

GLD AND SLV INVENTORY LEVELS:

JULY 20/WITH GOLD DOWN $8.80: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY REST AT 1009.06 TONNES

JULY 19/WITH GOLD DOWN $.35 :BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 5.22 TONNES FROM THE GLD//INVENTORY RESTS AT 1009.06 TONNES

JULY 18/WITH GOLD UP $7.55: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.61 TONNES FROM THE GLD////INVENTORY RESTS AT 1014.28 TONNES

JULY 15/WITH GOLD DOWN $3.75:HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.90 TONNES FROM THE GLD///INVENTORY RESTS AT 1016.89 TONNES//

JULY 14/WITH GOLD DOWN $28.75: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.74 TONNES FORM THE GLD//INVENTORY RESTS AT 1019.79 TONNES

JULY 13/WITH GOLD UP $10.55:HUGE CHANGES IN GOLD INVENTORY AT THE GLD:A WITHDRAWAL OF 1.74 TONNES FROMTHE GLD//INVENTORY RESTS AT 1021.53TONNES

JULY 12/WITH GOLD DOWN $9.40: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESS AT 1023.27 TONNES

JULY 11/WITH GOLD DOWN $4.45: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWL OF 1.16 TONNES FROM THE GLD./INVENTORY RESTS AT 1023.27 TONNES

JULY 7/WITH GOLD UP $1.35: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 7.61 TONNES FORM THE GLD///INVENTORY REST AT 1024.43 TONNES

JULY 6/WITH GOLD DOWN $26.70: BIG CHANGES IN GOLD INVENTORY AT  THE GLD: A WITHDRAWAL OF 9.86 TONNES FROM THE GLD//INVENTORY REST AT 1032.04 TONNES

JULY 5/WITH GOLD DOWN $36.55//BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 8.41 TONNES FROM THE GLD///INVENTORY RESTS AT 1041.90 TONNES

JULY 1/WITH GOLD DOWN $5.40: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.32 TONNES//INVENTORY RESTS AT 1050.31 TONNES

JUNE 30/WITH GOLD DOWN $9.20: big CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.74 TONNES FROM THE GLD///INVENTORY RESTS AT 1052.63 TONNES//

JUNE 28/WITH GOLD DOWN $3.05//BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.64 TONNES FROM THE GLD///INVENTORY RESTS AT 1056.40 TONNES

JUNE 27/WITH GOLD DOWN $4.90 CENTS TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.03 TONNES FROM THE GLD///INVENTORY RESTS AT 1061.04 TONNES 

JUNE 24/WITH GOLD UP 45 CENTS TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 8.70 TONNES FROM THE GLD//INVENTORY RESTS AT 1063.07 TONNES

JUNE 23/WITH GOLD DOWN $8.60:HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.03 TONNES FROM THE GLD//INVENTORY RESTS AT 1071.77 TONNES

JUNE 22/WITH GOLD UP 15 CENTS:BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.74 TONNES FROM THE GLD////INVENTORY RESTS AT 1073.80 TONNES

JUNE 21/WITH GOLD DOWN $2.00: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1075.54 TONES

JUNE 17/WITH GOLD DOWN $11.25: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 11.60 TONNES INTO THE GLD.///INVENTORY RESTS AT 1075.54 TONNES

JUNE 16/WITH GOLD UP $28.95: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1063.74 TONNES

JUNE 15/WITH GOLD UP $6.50/BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.65 TONNES FROM THE GLD////INVENTORY RESTS AT 1063.74 TONNES

GLD INVENTORY: 1009.06 TONNES

Now the SLV Inventory/( vehicle is a fraud as there is no physical metal behind them

JULY 20/WITH SILVER DOWN 2 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV:A WITHDRAWAL OF 8.253 MILLION OZ FORM THE SLV/INVENTORY RESTS AT 507.585 MILLION OZ//

JULY 19/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 515.838 MILLION OZ//

JULY 18/WITH SILVER UP 25 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV/: A DEPOSIT OF 4.995 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 515.838 MILLION  OZ.

JULY 15/WITH SILVER UP 31 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV/: A WITHDRAWAL OF 3.226 MILLLION OZ FORM THE SLV//INVENTORY RESTS AT 510.443 MILLIONOZ//

JULY 14/WITH SILVER DOWN 88 CENTS TODAY; BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 830,000 OZ FROM THE SLV// //INVENTORY RESTS AT 513.671 MILLION OZ

JULY 13/WITH SILVER UP 24 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SV//INVENTORY RESTS AT 514.501 MILLION OZ.

JULY 12/WITH SILVER DOWN 16 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A IWTHDRAWAL OF 3.228 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 514.501 MILLION OZ//

JULY 11/WITH SILVER DOWN 17 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV:A WITHDRAWAL OF 5.533 MILLION OZ FORM THE SLV////INVENTORY RESTS AT 517.729 MILLION OZ

JULY 7/WITH SILVER UP 3 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 4.889 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 523.262 MILLION OZ/

JULY 6/WITH SILVER UP ONE CENT: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 12.558 MILLION OZ FORM THE SLV///INVENTORY RESTS AT 528.151 MILLION OZ

JULY 5/WITH SILVER DOWN 55 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 540.709MILLION OZ//

JULY 1/WITH SILVER DOWN 61 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 553,000 OZ//INVENTORY RESTS AT 540.709 MILLION OZ//

JUNE 30/WITH SILVER DOWN 41 CENTS : SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 738,000 OZ FROM THE SLV//INVENTORY RESTS AT 541.262 MILLION OZ//

JUNE 28/WITH SILVER DOWN 26 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 542.00 MILLION OZ..

JUNE 27/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 542.000 MILLION OZ

JUNE 24/WITH SILVER UP 10 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 3.137 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 542.000 MILLION OZ

JUNE 23/WITH SILVER DOWN 41 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SL: A WITHDRAWAL OF 2.029 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 545.137 MILLION OZ//

JUNE 22/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 547.166 MILLION OZ.

JUNE 21/WITH SILVER UP 9 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 3.506 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 547.166 MILLION OZ//

JUNE 17/WITH SILVER DOWN 15 CENTS TODAY: SMALL CHANGES IN SILVER INVENTORY AT THE SLV/: A WITHDRAWAL OF 739,000 OZ FROM THE SLV./:INVENTORY RESTS AT 543.660 MILLION OZ/

JUNE 16/WITH SILVER UP 46 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 544.399 MILLION OZ

JUNE 15/WITH SILVER UP 44 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 544.399 MILLION OZ

CLOSING INVENTORY 507.585 MILLION OZ//

PHYSICAL GOLD/SILVER STORIES

1.PETER SCHIFF

Now Inflation Is The Millennials’ Fault! Or Is It?

WEDNESDAY, JUL 20, 2022 – 12:45 PM

Authored by Michael Maharrey via SchiffGold.com,

Putin is causing inflation. Greedy corporations are causing inflation. COVID-19 caused inflation. We hear all kinds of reasons for the recent spike in prices. And now we have a new one. It’s the millennials’ fault.

This is all wrong and it illustrates the problem with redefining inflation to be something it isn’t.

Smead Capital Investment chief investment officer Bill Smead told CNBC the size of the millennial generation is causing inflation.

“See, what everyone is not including in the conversation is what really causes inflation, which is too many people with too much money chasing too few goods,” he said, explaining that there are roughly 92 million millennials.

“So we have in the United States a whole lot of people, 27 to 42, who postponed home buying, car buying, for about seven years later than most generations. But in the past two years, they’ve all entered the party together,” he said.

Smead actually gets closer to the cause of inflation than most. He at least recognizes that more dollars chasing the same amount of goods and services causes prices to rise. But he leaves the key question unanswered – where are these people getting all of these extra dollars?

If the number of dollars along with the number of goods and services in the system remained stable, rising spending by one generation would necessarily correlate with declining spending in others. As millennials consumed more stuff, there would be less stuff for other people in the other generations to purchase. Prices would remain stable.

More realistically, the larger generation would produce more stuff, adding to the inventory of goods and services. In a stable monetary environment, prices would generally fall as the larger generation produced additional wealth.

But as Smead explains it, the millennials apparently aren’t producing more. But somehow they have more dollars. Meanwhile, every other generation still has the same number of dollars and they continue to spend at the same pace. Therefore we have all of these extra millennial dollars chasing the same amount of stuff.

Voila — inflation!

But it seems like maybe Smead is leaving out a key player in this scenario.

He is — the Federal Reserve.

The only way millennials can have more dollars without taking dollars from other generations is if somebody is creating new dollars. That somebody, of course, is the Fed.

The Root of the Problem

Somehow, the Fed manages to escape scrutiny in any mainstream discussion of inflation. But the central bank is the root of the problem.

The Fed creating trillions of dollars out of thin air over the last couple of years and injecting them into the economy is the primary reason we see consumer prices spiking through the roof today. Yes, oil price shocks, supply chain issues and other factors drive up prices in certain sectors, but the Fed monetary policy lies behind the more general rise in prices.

The federal government also played a role. In the first place, the US government needed the Fed to monetize its pandemic borrowing and spending spree. Meanwhile, both Trump and Biden administrations took a lot of the newly created money and showered it on consumers with stimulus checks. That put money in people’s pockets even as they were sitting at home producing nothing.

So, how did millennials spend a bunch of money while they weren’t working? The Fed “printed” it and the government gave it to them.

The Fed is the engine that drives it all. The central bank creates the dollars. Without all of those extra dollars, people couldn’t have “too much money” to chase too few goods, as Smead explains it.

One question remains — how does the Fed manage to get off scot-free in every inflation discussion when its policies drive inflation?

Because the politicians, bureaucrats, central bankers and mainstream media pundits have successfully redefined inflation.

Getting the Definition Right

When people use the term “inflation” today, they mean rising consumer prices as measured by the Consumer Price Index (CPI). You’ll often hear CPI referred to as “an inflation measure.”

But rising prices aren’t inflation. They are a symptom of inflation.

Look at this definition of inflation from a 1971 dictionary.

Notice that the definition mentions rising prices, but only as a symptom of inflation. Inflation itself is defined as “an increase in the amount of money and credit.”

Over the years, the government, along with its apologists in the corporate media and academia, altered the definition to suit government purposes. The standard definition of inflation bandied about today is nothing more than government propaganda.

Why does the government want to define inflation as rising prices?

Because the modern definition allows policymakers to shift the blame. If we use the original definition of inflation as an “expansion of the supply of money,” the culprit becomes clear. Who expands the supply of money? It’s the Fed and the government. So, if you accurately define inflation, you know exactly who’s to blame. But if the government can fool people into believing that an effect of inflation is inflation, they can blame it on whoever, or whatever, is raising the prices – Putin, pandemics and apparently millennials.

The original definition of inflation is the key to understanding inflation. When you misdefine inflation as rising prices, bad monetary policy and bad fiscal policy go on unchallenged.

The inflation blame game is great for the powers that be. It’s not so great for you or me.

END

2. Lawrie Williams//Pam and Russ Martens/Jim Rickards/Mathew Piepenburg/Von Greyerz

3. Chris Powell of GATA provides to us very important physical commentaries

Chris Powell is right.  Who in their right mind would want Lira.  They will take Russian roubles or 

Chinese yuan  for payment, but not lira.

(Bloomberg/GATA))

Turkey looks to ditch dollar in payments for Russian energy

Submitted by admin on Tue, 2022-07-19 16:23Section: Daily Dispatches

But who really wants Turkish lira?

* * *

By Firat Kozok
Bloomberg News
Tuesday, July 19, 2022

Turkey’s President Recep Tayyip Erdogan will discuss paying for Russian energy imports with currencies other than the U.S. dollar when he meets his Russian counterpart, Vladimir Putin, in Tehran today, according to Turkish officials familiar with the matter.

The two countries have been working on a proposal for local-currency trade payments, including for energy deals, a move that would help the government in Ankara slow the decline in its sovereign reserves, the officials said. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2022-07-19/turkey-looks-to-ditch-dollar-in-payments-for-russian-energy

end

Ronan Manly: Why is a criminal organization allowed to dominate the gold industry?

Submitted by admin on Wed, 2022-07-20 11:02Section: Daily Dispatches

By Ronan Manly
Bullion Star, Singapore
Wednesday, July 20, 2022

With a group of former JP Morgan precious metals traders currently on criminal trial in front of a federal jury in Chicago, accused of engaging in a racketeering conspiracy involving precious metals price manipulation, commodities fraud, and trade spoofing, while another group of their colleagues has already pleaded guilty, now is a good time to ask how the bank JP Morgan is still considered fit and proper to not only continue to trade in the precious metals markets but also to continue to dominate the entire precious metals industry in London, Singapore, and New York, with the support of the London Bullion Market Association, the Singapore Bullion Market Association, and the CME Group, operator of the Comex and NYMex.

While JP Morgan made a deferred prosecution deal with the U.S. Department of Justice and Commodity Futures Trade Commission in 2020 and admitted wrongdoing for the criminal conduct of numerous JP Morgan traders and sales personnel on the bank’s precious metals desks in London, Singapore, and New York, while paying $920 million in the form of a criminal monetary penalty, criminal disgorgement, and victim compensation in relation to this criminal precious metals scheme, the LBMA, SBMA, and CME Group, as you will see below, continue not only to welcome the proven criminal bank JP Morgan but to allow it to operate at the highest levels of each organisation. …

… For the remainder of the commentary:

https://www.bullionstar.com/blogs/ronan-manly/despite-manipulating-precious-metals-prices-jp-morgan-is-still-at-the-heart-of-the-lbma-sbma-and-comex/

* * *

end

(GATA) Financial letter editor Jay Taylor interviews GATA secretary

11:27a ET Wednesday, July 20, 2022

Dear Friend of GATA and Gold:

Your secretary/treasurer discussed GATA’s work yesterday with Jay Taylor, editor of J. Taylor’s Gold, Energy, and Tech Stocks letter, on his “Turning Hard Times Into Good Times” internet radio program. The main point of the discussion was that gold market manipulation is no mere “conspiracy theory” but longstanding Western government policy extensively documented in government archives and statements and memoirs by central bankers.

The discussion is 18 minutes long and can be heard at YouTube here:

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

end

(GATA) Robert Lambourne: BIS gold swaps keep falling sharply, down 60% in six months

By Robert Lambourne

Wednesday, July 20, 2022

Gold swaps undertaken by the Bank for International Settlements, the major gold broker for central banks, fell substantially again in June, this time by 68 tonnes, bringing the bank’s total swaps down to 202 tonnes from the 501 tonnes on the bank’s books in January, a decline of nearly 60% in six months.

The bank’s June statement of account is posted here:

https://www.bis.org/banking/balsheet/statofacc220630.pdf< /B>

The June total of swaps is the bank’s lowest since October 2019.

Again it is evident that the BIS remains an active trader of large volumes of gold swaps on a regular basis, and the recent data suggests that a downward trend in its swaps is continuing. If the current rate of decline is maintained, the BIS may be reporting zero gold swaps later this year.

The trend may indicate a response by the BIS and bullion banks to implementation of “Basel III” regulations, which make the unallocated gold business more burdensome for bullion banks.

The BIS rarely comments publicly on its gold activities, but its first use of gold swaps was considered important enough to cause the bank to give some background information to the Financial Times for an article published July 29, 2010, coinciding wit h publication of the bank’s 2009-10 annual report.

The general manager of the BIS at the time, Jaime Caruana, said the gold swaps were “regular commercial activities” for the bank, and he confirmed that they were carried out with commercial banks and so did not involve central banks. It also seems highly likely that the BIS’ remaining swaps are still all made with commercial banks, because the BIS annual report has never disclosed a gold swap between the BIS and a major central bank.

The swap transactions potentially create a mismatch at the BIS, which may end up being long unallocated gold (the gold held in BIS sight accounts at major central banks) and short allocated gold (the gold required to be returned to swap counterparties). This possible mismatch has not been reported by the BIS.

The gold banking activities of the BIS have been a regular part of the services it offers to central banks since the establishment of the bank 90 years ago. The first annual report of the BIS explains these activities in some detail:

http://www.bis.org/publ/arpdf/archive/ar1931_en.pdf

A June 2008 presentation made by the BIS to potential central bank members at its headquarters in Basel, Switzerland, noted that the bank’s services to its members include secret interventions in the gold and foreign exchange markets:

https://www.gata.org/node/11012

The use of gold swaps to take gold held by commercial banks and then deposit it in gold sight accounts held in the name of the BIS at major central banks doesn’t appear ever to have been as large a part of the BIS’ gold banking business as it has been in recent years.

As of March 31, 2010, excluding gold owned by the BIS, there were 1,706 tonnes held in gold sight accounts at major central banks in the name of the BIS, of which 346 tonnes or 20% were sourced from gold swaps from commercial banks.

The BIS now operates a much smaller gold banking business, with an estimated 611 tonnes of gold deposited in gold sight accounts as of 30 June. (This excludes 102 tonnes of the gold owned by the BIS itself.)

The present-day role of gold swaps in this smaller business is reducing sharply as the volume of swaps falls. In June the gold held in sight accounts on behalf of the BIS was about 33% provided by gold swaps. In May, excluding the 102 tonnes of gold owned by the BIS, some 39% of the gold held in sight accounts at major central banks on behalf of the BIS came from gold swaps instead of from other central banks.

If the BIS was adopting the degree of disclosure made by publicly held companies, such as commercial banks, some explanation of these changes probably would have been required by the accounting regulators. This irony may not be lost on those dealing with reg ulatory activities at the BIS. Presumably the shrinkage of the BIS’ gold banking business shows that even central banks now prefer to hold their own gold or hold it in earmarked form — that is, as allocated gold.

A review of Table B below highlights recent BIS activity with gold swaps, and despite the recent declines, the latest position estimated from the BIS monthly statements remains large and the volume of trades is significant.

No explanation for this continuing use of swaps has been published by the BIS. Indeed, no comment on the bank’s use of gold swaps has been offered since 2010.

This gold is supplied by bullion banks via the swaps to the BIS. The gois then deposited in BIS gold sight accounts (unallocated gold accounts) at major central banks such as the Federal Reserve.

The reasons for this activity have never been fully explained by the BIS and various conjectures have been made as to why the BIS is facilitating it. One conjecture is that the swaps are a mechanism for gold secretly supplied by central banks to cover shortfalls in the gold markets to be returned to the central banks. The use of the BIS to facilitate this trade suggests of a desire to conceal the rationale for the transactions.

As can be seen in Table A below, the BIS has used gold swaps extensively since its financial year 2009-10. No use of swaps is reported in the bank’s annual reports for at least 10 years prior to the year ended March 2010.

The February 2021 estimate of the bank’s gold swaps (552 tonnes) is higher than any level of swaps reported by the BIS at its March year-end since March 2010. The swaps reported at March 2021 are at the highest year-end level reported, as is clear from Table A.

Table A Swaps reported in BIS annual reports

March 2010: 346 tonnes.
March 2011: 409 tonnes.
March 2012: 355 tonnes.
March 2013: 404 tonnes.
March 2014: 236 tonnes.
March 2015: 47 tonnes.
March 2016: 0 tonnes.
March 2017: 438 tonnes.
March 2018: 361 tonnes.
March 2019: 175 tonnes
March 2020: 326 tonnes
March 2021: 490 tonnes

—–

The table below reports the estimated swap levels since August 2018. It can be seen that the BIS is actively involved in trading gold swaps and other gold derivatives with changes from month to month reported in excess of 100 tonnes in this period.

Table B – Swaps estimated by GATA from BIS monthly statements of account

Month … Swaps

& year … in tonnes

Jun-22 … /202
May-22 … /270
Apr-22 ….. /315
Mar-22 …. /360
Feb-22 …. /472
Jan-22 ….. /501
Dec-21…. /414
Nov-21…. /451
Oct-21…. /414
Sep-21 …. /438
Aug-21 …. /464
Jul-21 …. /502
Jun-21 …./471
May-21 …./517
Apr-21 …. /472
Mar-21…. /490
Feb-21 …../552
Jan-21 …. /523
Dec-20 …. /545
Nov-20 …. /520
Oct-20 …. /519
Sep-20…../ 520
Aug-20…../ 484
Jul-20 ….. / 474
Jun-20 …. / 391
May-20 …. / 412
Apr-20 …. / 328
Mar-20 …. / 326*
Feb-20 …. / 326
Jan-20 …. / 320
Dec-19 …. / 313
Nov-19 …. / 250
Oct-19 …. / 186
Sep-19 …. / 128
Aug-19 …. / 162
Jul-19 ….. / 95
Jun-19 …. / 126
May-19 …. / 78
Apr-19 ….. / 88
Mar-19 …. / 175
Feb-19 …. / 303
Jan-19 …. / 247
Dec-18 …. / 275
Nov-18 …. / 308
Oct-18 …. / 372 Sep-18 …. / 238
Aug-18 …. / 370

The estimate originally reported by GATA was 487 tonnes, but the BIS annual report states 490 tonnes, It is believed that slightly different gold prices account for the difference.

* The estimate originally reported by GATA was 332 tonnes, but the BIS annual report states 326 tonnes. It is believed that slightly different gold prices account for the d ifference.

GATA uses gold prices quoted by USAGold.com to estimate the level of gold swaps held by the BIS at month-ends.

—–

As noted already, the BIS in recent times has refused to explain its activities in the gold market, nor for whom the bank is acting:

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

Despite this reticence the BIS is almost certainly acting on behalf of central banks in taking out these swaps, as they are the BIS’ owners and control its Board of Directors.

This refusal to explain prompts some observers to believe that the BIS acts as an agent for central banks intervening surreptitiously in the gold and currency markets, providing those central banks with access to gold as well as protection from exposure of their interventions.

A recent report published by Bullion Star’s Ronan Manly on the Bank of Portugal’s use of its gold reserves reinforces this point as the Bank of Portugal confirms that 20 tonnes of its gold is stored with the BIS:

https://www.gata.org/node/21950

This disclosure seems a little economic with the truth as the BIS has no gold storage facilities of its own. Gold held by the BIS on behalf of central banks is either deposited into a BIS gold sight (unallocated) account or a BIS earmarked (allocated) gold account and deposited normally with one of the central banks based at a major gold trading center, such as the Federal Reserve in New York.

Since Manly shows that the Bank of Portugal is focused on earning income from its gold, it seems highly likely that this gold is held in a BIS sight account, though its ultimate location is unclear.

It is possible that the swaps provide a mechanism for bullion banks to return gold original ly lent to them by central banks to cover bullion bank shortfalls of gold. Some commentators have suggested that a portion of the gold held by exchange-traded funds and managed by bullion banks is sourced directly from central banks.

—–

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.

END

4. OTHER GOLD/SILVER COMMENTARIES

The Ukrainian gold has long been leased out.  The total amount of gold held by Ukraine prior to 2014 was 43 tonnes or 1 billion dollars.  They did not sell $12 billion dollars worth of gold because they did not have that quantity

(Peter Schiff/zerohedge)

The Price Of ‘Liberation’: Is Ukraine Dumping Its Gold Again?

WEDNESDAY, JUL 20, 2022 – 05:45 AM

It’s “Murky”.

That’s how Peter Schiff describes what is going on with regard Ukraine’s gold reserves currently, and as you’ll see below, he is somewhat understating the uncertainty.

But first, some history…

In March 2014, we wrote about a mysterious operation that took place under the cover of night that sources claimed at the time saw Ukraine’s gold reserves loaded on an unmarked plane, which reportedly took the gold to the US (for safekeeping?).

In the following few months – after we reported this outbound flow – Ukraine’s official (IMF-sourced) holdings of gold collapsed…

There has been no denials of this report since.

With that in mind, Reuters reported that, on Sunday, Ukraine National Bank (UNB) Deputy Governor Kateryna Rozhkova said on national television that the UNB had sold $12.4 billion of gold reserves since the beginning of Russia’s invasion on Feb. 24.

“We are selling (this gold) so that our importers are able to buy necessary goods for the country,” Rozhkova said.

She said the gold was not being sold to shore up Ukraine’s hryvnia currency.

There’s just one problem:

Ukraine doesn’t have $12 billion in gold reserves (according to official IMF data at the end of June).

As Peter Schiff explains, it remains unclear how Ukraine sold so much gold.

When the Russians invaded, UNB held about 27 tons of gold in its reserves valued at about $1.6 billion, according to the WGC.

In other words, according to Rozhkova, the central bank has sold more than 7 times its total gold holdings.

That’s not to say Rozhkova’s statement was misleading.

The country could be tapping into domestic gold supplies held by commercial banks or other institutions. PrivatBank ranks as the largest commercial bank in Ukraine. It was nationalized in 2016.

It’s also possible that other countries or private entities gave Ukraine gold to sell. Countries around the world have sent billions in aid to the Ukrainian government. For example. earlier this month, Sweeden sent 577.7 million SEK to Ukraine. That’s over $55.5 million USD and 1.5 billion UAH.

Less likely is a quick ramp-up in mine production. According to a Mining World report, Ukraine sits on nearly 3,000 tons of gold but the country had few operating mines before the invasion.

Regardless of the mechanism involved, it’s clear that Ukraine is relying on gold sales as an important source of currency as the war drags on.

The thot plickens though (or was Rozhkova caught in a lie?)…

This morning, Bloomberg reports that Rozhkova denied saying that last week and in fact the money came from FX reserves, not gold…

“We were selling foreign currency from our reserves to carry out transactions on our overseas trade contracts and with payment systems.”

Rozhkova explained in a text message that the UNB spent $12b from international reserves to fulfill foreign contracts since Russia’s invasion but also saw $10b inflow during the period (likely mainly from US taxpayers).

Overall, Ukraine’s FX reserves are down considerably this year as exports sink and military spending surges…

“Nowadays a significant pressure on reserves is being caused by the National Bank’s financing of the budget,” central bank Deputy Governor Serhiy Nikolaychuk said by email to Bloomberg News Thursday.

“If there were political will, this financing could be minimized and even stopped via redistribution of the country’s financial flows, and we believe it needs to be done.”

What is rather odd though – and we truly have no explanation for this – is that, according to official IMF data via Bloomberg, Ukraine’s total reserves ex-gold are higher than Ukraine’s total reserves…?

Is Ukraine ‘over-lending’ gold it doesn’t have?

Finally, some reports suggested that Ukraine’s gold has been ‘relocated’ to Poland.

Deputy Head of the National Bank of Ukraine Sergey Nikolaychuk said in an interview with Rabbit Hole magazine that Kyiv sends Ukraine’s gold and foreign exchange reserves to Poland, where they will be stored until the situation normalizes.

At the same time, he did not disclose either the volumes of these same reserves, or what they are. Apparently, this is not about physical gold, but about security.

This action suggests that the leadership of Ukraine is far less optimistic about its own and the country’s prospects in the war with Russia than Zelensky proclaims to the world.

So there we have it – UNB officials said they sold 7 times the amount of gold they have in reserves… then denied it.

Is this ‘relocation’ the cost of the new ‘liberation’? “Murky” indeed…

END

5.OTHER COMMODITIES: 

END 

COMMODITIES IN GENERAL/

END

6.CRYPTOCURRENCIES

7. GOLD/ TRADING

Your early  currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM

ONSHORE YUAN: CLOSED DOWN 6.7550

OFFSHORE YUAN: 6.7570

HANG SANG CLOSED UP 229.16 PTS OR  1.11%

2. Nikkei closed UP 718.56 OR 2.67%

3. Europe stocks   CLOSED ALL RED 

USA dollar INDEX  DOWN TO  106.85/Euro FALLS TO 1.0187

3b Japan 10 YR bond yield: RISES TO. +.244/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 138.14/JAPANESE FALLING APART WITH YEN FALTERING AS WELL AS LONG TERM YIELDS RISING BREAKING THE JAPANESE CENTRAL BANK.

3c Nikkei now  ABOVE 17,000

3d USA/Yen rate now well ABOVE the important 120 barrier this morning

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

3f 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. EIGHTY percent of Japanese budget financed with debt.

3g Oil UP for WTI and UP FOR Brent this morning

3h European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund DOWN TO +1.147%/Italian 10 Yr bond yield FALLS to 3.34% /SPAIN 10 YR BOND YIELD FALLS TO 2.30%…

3i Greek 10 year bond yield FALLS TO 3.38//

3j Gold at $1709.60 silver at: 18.82  7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00

3k USA vs Russian rouble;// Russian rouble UP 0  AND 50/100        roubles/dollar; ROUBLE AT 54.98

3m oil into the 102 dollar handle for WTI and  105 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 138.14DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the FRANC. It is not working: USA/SF this morning 0.9702– as the Swiss Franc is still rising against most currencies. Euro vs SF 0.9886well 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.

USA 10 YR BOND YIELD: 2.974  DOWN 5  BASIS PTS

USA 30 YR BOND YIELD: 3.140  DOWN 4 BASIS PTS

USA DOLLAR VS TURKISH LIRA: 17.59

Overnight:  Newsquawk and Zero hedge:

Newsquawk:

BTPs bolstered on Draghi’s speech while equities are steady with earnings ahead – Newsquawk US Market Open

Newsquawk Logo

WEDNESDAY, JUL 20, 2022 – 06:41 AM

  • European bourses are modestly firmer at present as we move towards the week’s key risk events and as participants had already reacted to the Nord Stream developments.
  • US futures similarly contained before further earnings releases, including Tesla after-hours.
  • The USD is pressured though the DXY has marginally reclaimed 106.50 with peers eking marginal upside.
  • Core debt continues to climb and BTPs lead the way after Draghi’s initial Senate speech; US 20yr due
  • Commodities continue to consolidate, with newsflow not changing the narrative and focused on familiar themes thus far
  • Looking ahead, highlights include Canadian CPI, US Existing Home Sales, New Zealand Trade Balance, Supply from the US and Earnings from Abbott & Tesla.

As of 11:05BST/06:05ET

For the full report and more content like this check out Newsquawk

Try a 14 day trial with Newsquawk and hear breaking trading news as it happens.

LOOKING AHEAD

  • Canadian CPI, US Existing Home Sales, New Zealand Trade Balance, Supply from the US, Earnings from Abbott & Tesla.

GEOPOLITICS

RUSSIA-UKRAINE

  • Russian President Putin said Saudi Arabia and UAE are offering mediation in Ukraine talks and Russia doesn’t see a desire from Ukraine to stick to the preliminary agreed deal in March, according to Reuters.
  • German government spokesperson says working on the assumption gas will flow again following the Nord Stream 1 maintenance. Subsequently,
  • Russia’s Gazprom says it still has not received documentation from Siemens (SIE GY) regarding the Nord Stream 1 pipeline*
  • EU is reportedly planning a temporary suspension of tariffs on fertilizer imports, via Bloomberg.

CENTRAL BANKS

  • RBI is prepared to spend another USD 100bln to prevent runaway Rupee depreciation, according to Reuters sources; not trying to protect a particular level, buy will not allow jerky movements.

EUROPEAN TRADE

EQUITIES

  • European bourses are modestly firmer at present as we move towards the week’s key risk events and as participants had already reacted to the Nord Stream developments.
  • Stateside, futures are posting similar price action with key earnings including Tesla on the docket; aside from corporate developments, the US-specific docket is slim.
  • German government will pass on some energy costs to consumers, as a component of the Uniper (UN01 GY) rescue package, according to Reuters sources. Subsequently, Handelsblatt reports Germany could take a 30% stake in Uniper.
  • Air India is said to be moving toward USD 50bln jet order, to be shared between Airbus (AIR FP) and Boeing (BA), but no deal seen at the Farnborough show, according to Reuters sources.
  • Click here for more detail.

FX

  • Kiwi extends gains vs Greenback ahead of NZ trade data amidst favourable AUD/NZD cross flows and as Aussie loses momentum against Buck, NZD/USD hovers around 0.6250, AUD/NZD circa 1.1050 and AUD/USD just over 0.6900.
  • DXY attempts to draw line in sand and hold around 106.500 before US existing home sales and 20 year note auction.
  • Sterling regains 1.2000+ status vs Dollar after post-UK CPI setback.
  • Euro elevated on eve of 50-50 half or quarter point ECB hike policy meeting, EUR/USD straddles 1.0250.
  • Loonie stalls into Canadian inflation update and Yen pauses as BoJ starts two-day policy confab, USD/CAD holds above 1.2850 and USD/JPY off sub-138.00 low.
  • Click here for more detail.

Notable FX Expiries, NY Cut:

  • USD/JPY: 137.00 (625M), 137.75 (835M), 139.00 (1.05BN), 140.00 (705M)
  • Click here for more detail.

FIXED INCOME

  • Bonds lay down firm foundations for midweek revival.
  • Bunds up to 151.89 from 150.83 low, Gilts recover from 114.67 to reach 115.59 and 10 year T-note touches 118-10 vs 117-27 overnight low ahead of data and 20 year supply.
  • BTPs even more resurgent between 124.79-122.84 parameters after Italian PM Draghi’s pre-Senate debate speech.
  • Click here for more detail.

COMMODITIES

  • Crude benchmarks are modestly softer after Tuesday’s firmer settlement, newsflow has been relatively sparse and focused on, but not adding much, to recent Nord Stream updates ahead of the maintenance period concluding on Thursday.
  • US Private Inventory Data (bbls): Crude +1.9mln (exp. +1.4mln), Gasoline +1.3mln (exp. +0.1mln), Distillate -2.2mln (exp. +1.2mln), Cushing +0.5mln.
  • Qatar sold September-loading Al-Shaheen crude at USD 9-10/bbl above Dubai quotes which is the highest premium in four months, according to sources.
  • India cut the windfall tax on diesel and aviation fuel shipments by INR 2/litre and cut taxes on domestically produced crude to INR 17k/ton.
  • Russian President Putin said Gazprom plans to fulfil its obligations and that there are no grounds for Ukraine to shut down one of the gas transit routes to Europe, while he added that one more Nord Stream 1 turbine is expected to be sent for maintenance later this month and that Gazprom is ready to pump gas as much as needed. Furthermore, Putin said attempts to cap Russian oil prices will lead to prices skyrocketing and said Nord Stream volume will drop if the turbine return is delayed, according to Reuters.
  • Spot gold has been slightly choppy, extending to incremental new highs and lows during European hours, though fairly steady above USD 1700/oz overall.
  • Click here for more detail.

NOTABLE EUROPEAN HEADLINES

  • Italian PM Draghi asks parties if they are prepared to rebuild their pact. Says unfortunately political parties have growing desire for division, last week’s confidence vote marked the end of the trust in the coalition. The only way to stay together is to rebuild our pact, Italian public is asking for. Need to move towards the introduction of a minimum wage.
  • Click here for newsquawk analysis on the overall situation and here for a brief summary on the next focus points.

NOTABLE EUROPEAN DATA:

  • UK CPI YY (Jun) 9.4% vs. Exp. 9.3% (Prev. 9.1%); MM (Jun) 0.8% vs. Exp. 0.7% (Prev. 0.7%)
  • Core CPI YY (Jun) 5.8% vs. Exp. 5.8% (Prev. 5.9%); MM (Jun) 0.4% vs. Exp. 0.5% (Prev. 0.5%)

NOTABLE US HEADLINES

  • USTR is to announce the US is requesting dispute settlement consultations with Mexico under the USMCA trade agreement with the request related to measures taken by Mexico in the energy sector which undermine US companies and US-produced energy, according to Reuters.

CRYPTO

  • Bitcoin continues to extend on recent levels, lifting incrementally to a USD 23.8k high.

APAC TRADE

  • APAC stocks followed suit to the gains in the EU and the US where sentiment was underpinned by Nord Stream optimism and a weaker buck.
  • ASX 200 was led higher by tech outperformance and with miners firmer after further quarterly output updates.
  • Nikkei 225 gained with the BoJ expected to stick with ultra-loose policy at its 2-day policy meeting.
  • Hang Seng and Shanghai Comp. conformed to the heightened risk appetite with tech encouraged despite reports Chinese authorities will fine Didi more than USD 1bln over data security breaches, as this ends a year-long investigation and paves the way for a Hong Kong listing. However, gains were somewhat capped in the mainland after the PBoC maintained its Loan Prime Rates which was as expected but disappointed outside calls for a cut to the 5yr LPR to assist with the ongoing mortgage strike issue, while China’s daily COVID cases surpassed 1,000 for the first time since May.
  • China Evergrande (3333 HK) is yet to reach a deal with foreign bondholders over restructuring, according to WSJ sources.

NOTABLE APAC HEADLINES

PBoC 1-Year Loan Prime Rate (Jul) 3.70% vs Exp. 3.70% (Prev. 3.70%)

  • PBoC 5-Year Loan Prime Rate (Jul) 4.45% vs Exp. 4.45% (Prev. 4.45%)
  • Chinese Premier Li said China is to keep macro policies consistent and targeted, while he added that as long as employment is relatively sufficient, household income grows and prices are stable, slightly higher or lower growth rates are both acceptable, according to Xinhua.
  • Chinese military said it monitored US destroyer Benfold’s crossing of the Taiwan Strait and said frequent provocations by the US demonstrate that the US is a destroyer of peace and stability in the Taiwan Strait, while it added that troops in the theatre remain on high alert at all times, according to Reuters.
  • COVID cases in Japan are set to reach a record high in excess of 150k, according to the Nikkei.
  • Shanghai is to require residents to take a minimum of one COVID test per week until August 31st, according to an official; while Macau is to reopen some casinos on Saturday, July 23rd, according to Reuters sources.

END

US Futures Rally Reverses After Europe Proposes Cuts To Nat Gas Consumption

WEDNESDAY, JUL 20, 2022 – 08:02 AM

What was a solid overnight rally which pushed global markets higher and US index futures as high as 3,964 after a beat in Netflix subs helped further ease market jitters, fizzled and then reversed around 6:30am ET, when the European Union officially proposed that the bloc cut its natural gas consumption by 15% over the next eight months to ensure that any full Russian cutoff of natural gas supplies won’t disrupt industries over the winterwith Commission president Ursula von der Leyen going so far as suggesting the EU would be able to enforce a slowdown in gas consumption.

The move which saw spoos slide more than 20 points from 3,947 to below 3,925 before rebounding, and sparked a reversal in haven assets, as Treasuries rose with 10Y yields dropping back under 3.0%, and the dollar index stabilizing after three days of declines…

… was driven by European stocks, with the Stoxx Europe 600 Index falling 0.1% at 12:09 p.m. in London, snapping a three-day gaining streak. Auto and insurance stocks led the declines, while technology, energy and real estate gained.

European investor sentiment had been roiled in recent day by prospects that Russian gas supplies could halt entirely, a scenario that strategists said would tip the regional economy into an immediate recession. And while on Wednesday morning Vladimir Putin signaled that Europe will start getting gas again through the Nord Stream 1 pipeline, he warned that unless a spat over sanctioned parts is resolved, flows will be curbed to at little as 20% of available inventory. There was some positive news when Italian Prime Minister Mario Draghi said he is ready to rebuild his governing coalition, helping Italian bonds rise.

Amid the broad-based swoon, European food delivery stocks rose as Citi said that Delivery Hero, Just Eat and Deliveroo’s stocks all have upside potential over the next 12 months, as the broker expects the three firms to record lower FY22 Ebitda losses than the consensus forecasts. Just Eat surges 12% as of 12:37pm CET, Delivery Hero jumps 8.8% and Deliveroo is up 3.5%. Here are some of the other notable European movers today:

  • Uniper shares rose as much as 21% after a report that the German government is nearing a bailout deal for the utility. Fortum, which owns 75% of Uniper, rises as much as 4.5%.
  • Georg Fischer shares jump as much as 7.8% after 1H earnings. Baader says the company’s resilient business model delivered a result above expectations despite headwinds from China lockdowns and supply chain disruptions.
  • Alfa Laval surges as much as 9.4% after the Swedish industrial equipment maker’s second quarter earnings surprised with beats on order growth, adjusted Ebita and sales.
  • Wise extends gains since Tuesday’s trading update, rising as much as 5.5% today. Credit Suisse boosts its price target and estimates for the money transfer firm.
  • Carrefour shares climb as much as 3.4% after the French grocer agrees to sell a controlling stake in its retail operations in Taiwan to local partner Uni-President for $970 million, a move welcomed by investors.
  • Royal Mail shares drop as much as 6.1% after the company posted what Liberum calls an “awful” 1Q trading update, though analysts see the potential separation of its two main business units providing some relief.
  • Telia falls as much as 5.6%, as analysts flagged weak free cash flow in its 2Q update. The Swedish telecommunications company beat estimates for net sales and adjusted Ebitda for the second quarter.
  • SKF shares fall as much as 3.8% after the Swedish ball bearings manufacturer reported 2Q earnings that missed the average analyst estimate.

The risk of a global downturn and Europe’s energy crisis doused optimism about the US earnings season and confidence the Federal Reserve will avoid very aggressive monetary tightening. “We don’t expect a sustained improvement in market sentiment until investors get greater clarity on the outlook for the economy, central bank policy, and political risks,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Going back to the US, in premarket trading Netflix added about 6% after it reported better-than-feared earnings late on Tuesday and said it expects to return to subscriber growth before the end of the year. Below we list some other notable premarket movers:

  • VBL Therapeutics (VBLT US) slumps as much as 80% after the biotech firm’s clinical trial for ovarian cancer treatment ofra-vec, or VB-111, didn’t meet its primary endpoints.
  • Omnicom (OMC US) rose 6.9% on low volume after second-quarter revenue beat the average analyst estimate and the advertising firm raised its organic sales growth forecast for the year.
  • Oil shares could be in focus as HSBC said in a note that a recent correction has left global integrated oil stocks looking attractive again and upgraded Chevron (CVX US) to buy.
  • Keep an eye on Cazoo (CZOO US) shares as the stock was initiated with a sell rating at Berenberg, with the broker flagging a more competitive environment in Europe for the online used-car retailer.
  • Watch Apple (AAPL US) shares as their price target was lowered to $185 from $205 at Wells Fargo Securities, a move that comes ahead of the iPhone maker’s upcoming results.
  • Keep an eye on US home retail stocks as Morgan Stanley cut estimates and price targets on consumer discretionary-exposed retailers, including Floor & Decor Holdings (FND US), Williams-Sonoma (WSM US) and Best Buy (BBY US), amid an expected slowdown in spending in the second half of the year.

Earlier in the session, Asian stocks advanced as a weaker dollar and report of a possible end to China’s investigation into Didi Global boosted sentiment.  The MSCI Asia Pacific Index gained as much as 1.7%, the biggest intraday gain in more than three weeks. Alibaba and Tencent were among the biggest boosts to the benchmark after the Wall Street Journal reported that China is expected to fine ride-hailing firm Didi more than $1 billion before wrapping up its year-long probe.

The dollar fell, underscoring waning haven demand, with the euro strengthening on the possibility of a bigger-than-expected rate hike by the European Central Bank. Asian stocks also got a boost from gains in US peers overnight amid optimism on earnings and better-than-feared subscriber numbers from Netflix. “A mix of global and local factors appear to be driving risk-on sentiment in Asia today,” said Chetan Seth, Asia Pacific equity strategist at Nomura Holdings in Singapore. “Stocks have been quite weak of late and investors appear to be very cautiously positioned, so incrementally positive news does help.”  Almost all main Asian markets were higher, with the Japan benchmark climbing more than 2% ahead of its central bank’s policy decision Thursday. Key equity measures in Hong Kong rose more than 1%. 

Japanese stocks climbed amid investor hopes for better-than-expected earnings and subsiding worry over interest-rate hikes. The Topix rose 2.3% to 1,946.44 at the 3 p.m. close in Tokyo, while the Nikkei 225 advanced 2.7% to 27,680.26. “Earnings from Netflix were not so bad, and this has led to an increase in expectations for better corporate performances,” said Mitsushige Akino, a senior executive officer at Ichiyoshi Asset Management.  Sony Group contributed the most to the Topix’s gain, increasing 4.1%. Out of 2,170 shares in the index, 1,966 rose and 143 fell, while 61 were unchanged. “It looks like things that had been sold off are rebounding,” said Hajime Sakai, chief fund manager at Mito Securities

India’s benchmark equity index extended gains for a fourth day in the longest rising streak this month as technology companies led advances.  The S&P BSE Sensex rose 1.2% to 55,397.53 in Mumbai on Wednesday, taking its weekly advance above 3%. The NSE Nifty 50 Index advanced 1.1%, taking cues from gains in other Asian markets. A gauge of IT companies rose the most among 19 sectoral indexes, of which 13 sectors gained. Technology stocks rally was led by Tech Mahindra and HCL Technologies that gained 3.8% and 3.1% respectively. Reliance Industries Ltd contributed the most to the index gain, increasing 2.5% after a cut in windfall taxes of fuels triggered gains in oil and energy shares. Out of 30 shares in the Sensex index, 22 rose and 8 fell.

In FX, the Bloomberg dollar spot index is near flat. CHF and NOK are the weakest performers in G-10. The euro held near a two-week high, with expectations buoyed by reports the European Central Bank may consider delivering a 50-basis-point hike at Thursday’s meeting, despite earlier signaling a smaller move. The Swiss franc underperformed other Group-of-10 currencies as appetite for haven currencies waned; a Bloomberg gauge of dollar strength edged lower for a fourth day.

In rates, Treasuries were richer across the curve, adding to gains in early US session as stock futures drop. US yields richer by up to 6bp across front-end of the curve as belly and front-end outperform, steepening 2s10s, 5s30s spreads each by 2bp on the day; 10-year yields around 2.97%, richer by 5bp on the day with bunds outperforming by additional 2.5bp and gilts by 6bp. Italian benchmark 10-year yields fell as much as 16 basis points to 3.17%; the yield spread over German equivalents narrowed to  199bps as Mario Draghi offered to remain as prime minister. Bunds outperformed with gilts, as traders adjust expectations for Thursday’s ECB policy meeting. US auctions resume with $14b 20-year bond reopening at 1pm ET; WI yield around 3.385% is ~10bp richer than June’s stop-out, which tailed the WI by 0.2bp.  UK gilts advanced, shrugging off an inflation print that showed consumer price growth accelerated to a new 40-year high in June

In commodities, crude futures dropped with WTI trading within Tuesday’s range, falling 1.7% to trade near $102.40. Brent falls 1.1% near $106.15. Most base metals trade in the green; LME nickel rises 3.1%, outperforming peers. LME tin lags, dropping 0.4%. Spot gold falls roughly $4 to trade near $1,708/oz.

Bitcoin hovered above $23,000 after climbing out of a one-month-old trading range.

To the day ahead now, and data releases include UK and Canadian CPI for June, US existing home sales for June, and the Euro Area’s preliminary consumer confidence for July. Otherwise, earnings releases include Tesla and Abbott Laboratories.

Market Snapshot

  • S&P 500 futures up 0.2% to 3,945.00
  • STOXX Europe 600 up 0.2% to 424.21
  • MXAP up 1.3% to 158.52
  • MXAPJ up 1.0% to 520.62
  • Nikkei up 2.7% to 27,680.26
  • Topix up 2.3% to 1,946.44
  • Hang Seng Index up 1.1% to 20,890.22
  • Shanghai Composite up 0.8% to 3,304.72
  • Sensex up 1.4% to 55,533.19
  • Australia S&P/ASX 200 up 1.6% to 6,759.21
  • Kospi up 0.7% to 2,386.85
  • German 10Y yield little changed at 1.23%
  • Euro up 0.1% to $1.0238
  • Gold spot down 0.2% to $1,707.69
  • U.S. Dollar Index little changed at 106.64

Top Overnight News from Bloomberg

  • Prime Minister Mario Draghi told the Rome senate on Wednesday that his fractious coalition can be rebuilt, tamping down concerns he’ll quit the government and throw Italy into chaos. Markets rallied after his comments.
  • Russian President Vladimir Putin signaled that Europe will start getting gas again through a key pipeline, but warned that unless a spat over sanctioned parts is resolved, flows will be tightly curbed.
  • UK inflation hit a new 40-year high in June, intensifying the cost of living crisis and heaping pressure on the Bank of England to deliver an aggressive interest-rate increase next month
  • Some suppliers to Chinese real estate developers are refusing to repay bank loans because of unpaid bills owed to them, a sign that the loan boycott that started with homebuyers is starting to spread.

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks followed suit to the gains in the EU and the US where sentiment was underpinned by Nord Stream optimism and a weaker buck. ASX 200 was led higher by tech outperformance and with miners firmer after further quarterly output updates. Nikkei 225 gained with the BoJ expected to stick with ultra-loose policy at its 2-day policy meeting. Hang Seng and Shanghai Composite conformed to the heightened risk appetite with tech encouraged despite reports Chinese authorities will fine Didi more than USD 1bln over data security breaches, as this ends a year-long investigation and paves the way for a Hong Kong listing. However, gains were somewhat capped in the mainland after the PBoC maintained its Loan Prime Rates which was as expected but disappointed outside calls for a cut to the 5yr LPR to assist with the ongoing mortgage strike issue, while China’s daily COVID cases surpassed 1,000 for the first time since May. China is yet to reach a deal with foreign bondholders over restructuring, according toEvergrande (3333 HK) WSJ sources

Top Asian News

  • Chinese military said it monitored US destroyer Benfold’s crossing of the Taiwan Strait and said frequent provocations by the US demonstrate that the US is a destroyer of peace and stability in the Taiwan Strait, while it added that troops in the theatre remain on high alert at all times, according to Reuters.
  • COVID cases in Japan are set to reach a record high in excess of 150k, according to the Nikkei.
  • Shanghai is to require residents to take a minimum of one COVID test per week until August 31st, according to an official; while Macau is to reopen some casinos on Saturday, July 23rd, according to Reuters source
  • VW’s Affordable Brands to Become More Similar Under the Hood
  • Pakistan Finance Chief Blames Politics as Rupee Drops to Record
  • Shift to Quality From Value in Japan Stocks Is Coming: Jefferies
  • China Tech Stocks Gain on Renewed Bets of Crackdown Ending
  • South Korea Investigates Abnormal Crypto-Linked FX Transactions
  • US Official Sees Russia Export Controls as Model for China

European bourses are modestly firmer at present as we move towards the week’s key risk events and as participants had already reacted to the Nord Stream developments. Stateside, futures are posting similar price action with key earnings including on the docket; aside fromTesla corporate developments, the US-specific docket is slim. German government will pass on some energy costs to consumers, as a component of the Uniper (UN01 GY). rescue package, according to Reuters sources. Subsequently, Handelsblatt reports Germany could take a 30% stake in Uniper.

Top European News

  • UK May House Price Index Rises 12.8% Y/y
  • VW’s Affordable Brands to Become More Similar Under the Hood
  • Draghi Tells Senate His Coalition Can Be Rebuilt: Italy Update
  • Italian Bonds Rally After Draghi Says Coalition Can Be Rebuilt
  • US Official Sees Russia Export Controls as Model for China
  • Draghi Says Italy’s Governing Coalition Can Be Rebuilt

FX

  • Kiwi extends gains vs Greenback ahead of NZ trade data amidst favourable AUD/NZD cross flows and as Aussie loses momentum against Buck, NZD/USD hovers around 0.6250, AUD/NZD circa 1.1050 and AUD/USD just over 0.6900.
  • DXY attempts to draw line in sand and hold around 106.500 before US existing home sales and 20 year note auction.
  • Sterling regains 1.2000+ status vs Dollar after post-UK CPI setback.
  • Euro elevated on eve of 50-50 half or quarter point ECB hike policy meeting, EUR/USD straddles 1.0250.
  • Loonie stalls into Canadian inflation update and Yen pauses as BoJ starts two-day policy confab, USD/CAD holds above 1.2850 and USD/JPY off sub-138.00 low

Bonds

  • Bonds lay down firm foundations for midweek revival.
  • Bunds up to 151.89 from 150.83 low, recover from 114.67 to reach 115.59 and touchesGilts 10 year T-note 118-10 vs 117-27 overnight low ahead of data and 20 year supply.
  • BTPs even more resurgent between 124.79-122.84 parameters after Italian PM Draghi’s pre-Senate debate speech.

Commodities

  • Crude benchmarks are modestly softer after Tuesday’s firmer settlement, newsflow has been relatively sparse and focused on, but not adding much, to recent Nord Stream updates ahead of the maintenance period concluding on Thursday.
  • US Private Inventory Data (bbls): Crude +1.9mln (exp. +1.4mln), Gasoline +1.3mln (exp. +0.1mln), Distillate -2.2mln (exp. +1.2mln), Cushing +0.5mln
  • Qatar sold September-loading Al-Shaheen crude at USD 9-10/bbl above Dubai quotes which is the highest premium in four months, according to sources.
  • India cut the windfall tax on diesel and aviation fuel shipments by INR 2/litre and cut taxes on domestically produced crude to INR 17k/ton.
  • Russian President Putin said Gazprom plans to fulfil its obligations and that there are no grounds for Ukraine to shut down one of the gas transit routes to Europe, while he added that one more Nord Stream 1 and thatturbine is expected to be sent for maintenance later this month Gazprom is ready to pump gas as. Furthermore, Putin said attempts to cap Russian oil prices will lead to prices skyrocketing and said Nord Stream volume will drop if the turbine return is delayed, according to Reuters.
  • Spot gold has been slightly choppy, extending to incremental new highs and lows during European hours, though fairly steady above USD 1700/oz overall.

US Event Calendar

  • 07:00: July MBA Mortgage Applications, prior -1.7%
  • 10:00: June Existing Home Sales MoM, est. -1.1%, prior -3.4%
  • 10:00: June Home Resales with Condos, est. 5.35m, prior 5.41m

DB’s Jim Reid concludes the overnight wrap

It’s going to be a huge 36 hours for Europe with questions over gas flows, Draghi’s future, the anti-fragmentation tool and last but not least whether the ECB move by 25bps or 50bps tomorrow. The very fact that we’re now contemplating 50bps is potentially yet another global incidence of forward guidance being ramrodded by the force of inflation.

This story came from numerous news sources which indicates that perhaps the ECB were trying to float the idea of 50bps to see the reaction or to try to put some pressure on the doves in the committee. It not impossible that it’s part of a trade-off to get a stronger anti-fragmentation tool for Italy. If we do get 50bps that would take the deposit rate out of negative territory for the first time since 2014, and go against the forward guidance from the June meeting, where they said in no uncertain terms that “the Governing Council intends to raise the key ECB interest rates by 25 basis points at its July monetary policy meeting.” Overnight index swaps moved to price in an additional +7.7bps worth of hikes at the upcoming meeting, with the 37.0bps worth priced in being almost equidistant between 25bps and 50bps.

This comes as Draghi makes a statement to the Italian senate today at 930 CET ahead of a day of debates. We should know more about whether this government can carry on or is about to collapse. See my CoTD yesterday (link here) for a reminder that Italy has had 162 governments in the last 131 years and that this near 18 month Draghi administration has actually outperformed the average life by around 3 months. Also see our economists latest thoughts (link here) on the political impasse in Italy published last night.

However the most important event is probably the Nord Stream pipeline theoretically reopening tomorrow. Yesterday it was reported by Reuters that flows would restart through the pipeline tomorrow, but this would be at a reduced capacity. What that capacity is we don’t know but the market has certainly got more worried about zero flows in recent weeks so if we got close to the 40% capacity we saw in the weeks before the 10-day maintenance period that would be very bullish for markets in the near term and according to our German economists’ supply monitor (link here), Germany could just get by through the winter. The Kremlin also know that so maybe they would cut back a little more than pre-maintenance levels. Indeed Putin was quoted overnight as saying supplies could be cut again if there are more delays in the return of the turbine from Canada. So we will see what we hear today in terms of clues.

Our utilities analyst James Brand suggested that utilities get told a day in advance what sort of flows are to be expected through pipelines. This isn’t usually published but these are exceptional times and if the info is available it will undoubtedly come out. Natural gas futures fell for a 4th consecutive session yesterday, coming down -1.78% to €154 per megawatt-hour. So nothing dramatic at this stage. A reminder that one of my CoTDs last week (link here) explained why a complete shut off was probably not in Putin’s best interest.

Markets were already bouncing back before the gas headlines but there was no doubt this gave it an extra impetus, especially in Europe. Unsurprisingly the DAX (+2.69%) led the way but the STOXX 600 (+1.38%) also rallied, with every sector on the day higher and a slight skew toward cyclicals outperforming defensives.

The S&P managed to hold on to its morning gains yesterday unlike on Monday, rallying +2.76% for its best daily performance in almost a month, while the NASDAQ outperformed climbing +3.11%, its best daily performance over the same time frame. Indeed, it was an incredibly broad-based advance for the S&P 500, with the 494 companies in the index moving higher representing the most daily gainers since April 2020 when policy relief measures were coming in left and right. That came in spite of a cut in Johnson and Johnson’s (-1.46%) full-year 2022 guidance to now expecting adjusted EPS of $10.00-$10.10, rather than $10.15-$10.35 previously. After the close, Netflix reported that they lost fewer subscribers than was feared, which drove their shares +7.71% higher in after-hours trading. That will come as welcome news for the streamer, which was down more than -66% YTD, highlighted by two forgettable earnings reports to start the year, with their share price falling -21.79% after 4Q21 earnings and falling -35.12% after 1Q22 earnings.

Over in fixed income, even with the 50bps ECB chatter bonds were relatively subdued but those headlines did prompt a yield sell-off. 10yr bunds (+6.2bps), OATs (+3.0bps) and BTPs (+4.0bps) all moved higher in yield terms on the day, and the more policy-sensitive front-end yields saw slightly larger increases. Gilts (+2.1bps) were a relative outperformer, although that reflected the fact that the BoE moving by 50bps (see more below re BoE Bailey’s speech) was already priced in, whereas for the ECB it very much wasn’t. Those developments on interest rates were a factor helping the Euro to strengthen +0.84% against the US Dollar, taking it to its strongest level since the beginning of the month.

Treasury yields soldoff modestly across the curve, which flattened -3.0bps to -22.5bps (2s10s). 10yr yields climbed back above 3%, gaining +3.5bps, bringing them +10.6bps higher to start the week. 2yrs increased +6.3bps, which coincided with fed futures pricing increasing in 2023, contrary to recent increases which were driven by increases in Fed pricing through the end of 2022. Indeed, the timing of the first Fed rate cut was pushed into Q2 2023, with policy rates expected to stay above 3.5% through the spring. As I type, yields on the 10yr USTs are fairly stable.

Onto BoE Governor Bailey’s annual Mansion House speech, where he said that “a 50 basis point increase will be among the choices on the table when we next meet”. So an explicit acknowledgement that they could follow the Fed and other central banks (maybe the ECB) in moving by a larger increment, which would mark the first time they’ve moved by more than 25bps since the BoE gained operational independence in 1997. He also made some comments on QT, saying that the next meeting would be “time for the MPC to discuss the strategy for beginning to sell the gilts held in our Asset Purchase Facility Portfolio”, and that they were looking at a reduction “of something in the region of £50-100bn in the first year.”

Overnight in Asia equity markets are strong. The Nikkei (+2.37%) is leading gains across the region this morning followed by the Hang Seng (+1.91%) and the Kospi (+1.04%) whilst the Shanghai Composite (+0.67%) and CSI (+0.43%) are slightly underperforming. Moving ahead, stock futures in DM point to further gains with contracts on the S&P 500 (+0.58%), NASDAQ 100 (+0.62%) and DAX (+0.75%) all trading up.

In central bank news, China maintained status quo on the benchmark rates for corporate and household loans, leaving the one-year loan prime rate (LPR) at 3.70%, and the five-year LPR at 4.45%, in line with market expectations, despite rising financial risks amid slowing economic growth. Elsewhere, the Reserve Bank of Australia (RBA) Governor Philip Lowe indicated that inflation for the second quarter (scheduled next week) will further step-up and there needs to be a path back to 2% to 3% inflation.

Oil prices are falling in Asian trade after rising earlier with Brent crude (-0.33%) lower at $107/bbl and WTI futures (-0.66%) at $103.53/bbl as we go to press.

Here in the UK, the competition to become Prime Minister continues with just 3 candidates now left in the Conservative leadership race: former Chancellor Rishi Sunak, trade minister Penny Mordaunt and Foreign Secretary Liz Truss. Sunak has been leading among the MP’s ballots, but a YouGov poll yesterday found that when it comes to the final 2 that the grassroots members vote on, then Sunak would lose to either Mordaunt or Truss. Today will see the final ballot of MPs take place ahead of that membership vote, and whilst Sunak is just shy of the votes needed to make the final 2, the big question is whether the remaining spot is taken by Mordaunt or Truss, with the betting markets favouring Truss’ chances.

On the data side, US housing starts fell to an annualised rate of 1.559m in June (vs. 1.580m expected), their lowest level in 9 months, and building permits similarly fell to a 9-month low, with an annualised 1.685m (vs. 1.650m expected). Meanwhile in the UK, the number of payrolled employees rose by +31k in June (vs. +68k expected).

To the day ahead now, and data releases include UK and Canadian CPI for June, US existing home sales for June, and the Euro Area’s preliminary consumer confidence for July. Otherwise, earnings releases include Tesla and Abbott Laboratories.

i)WEDNESDAY MORNING// TUESDAY  NIGHT

SHANGHAI CLOSED UP 25.29 PTS OR 0.77%   //Hang Sang CLOSED UP 229.16 OR 1.11%    /The Nikkei closed UP 718.58 OR % 2.67.          //Australia’s all ordinaires CLOSED UP 1.78%   /Chinese yuan (ONSHORE) closed DOWN AT 6.75500    /Oil UP TO 102.48 dollars per barrel for WTI and UP TO 105.80 for Brent. Stocks in Europe OPENED  ALL RED        //  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.7550 OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7570: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER 

3 a./NORTH KOREA/ SOUTH KOREA/

///NORTH KOREA/SOUTH KOREA/

3B JAPAN

3c CHINA

CHINA

China’s diesel and gasoline exports plunge

(Kennedy/OilPrice.com)

China’s Fuel Exports Plunge

TUESDAY, JUL 19, 2022 – 05:25 PM

By Charles Kennedy of OilPrice.com

China’s exports of gasoline and diesel slumped in the first half of 2022, per customs data out on Monday, as Chinese authorities continued to work to reduce overseas sales of fuels and allocated lower export quotas to refiners. 

Gasoline exports slumped by 42 percent annually in the first half of this year compared to the same period of 2021, according to Chinese customs data cited by Reuters. Diesel exports crumbled by an even larger percentage—they were down by 84 percent between January and July compared to the first half of 2021.   

This month, China’s fuel exports are expected to rebound after the government has recently allocated a new batch of export quotas to refiners, according to industry consultancy JLC quoted by Bloomberg.

The latest batch of export quotas has been issued, but combined with other quotas so far this year, overall export quotas from China are much lower than last year’s.

At the beginning of this month, China issued the latest batch of fuel export quotas for refiners, and total quotas so far this year are 39 percent lower than the collective quotas this time last year—a sign that Chinese fuel exports are unlikely to ease the tight fuel market globally.

The Chinese authorities have approved the latest batch for a total of 5 million tons, Reuters reported, citing sources. That would be enough for the refiners given quotas to make money with sales on the export market, but not enough to ease the global crunch in fuel supply.

China started this year by considerably reducing the allowances for fuel exports in the first export quota batch for 2022, signaling its intention to limit fuel sales abroad and curb excessive refinery output.

Exports were reportedly limited in the aftermath of the Russian invasion of Ukraine, as Chinese authorities were said to have asked state refiners in the country to consider halting diesel and gasoline exports in April due to heightened concerns about oil supply.

Chinese diesel and gasoline exports so far this year have been well below last year’s, while COVID-related lockdowns hurt demand in the spring, swelling domestic Chinese inventories.

end

CHINA/COVID

(Wu/EpochTimes)

China is experiencing a spread of Omicron variants and thus sparking new lockdown concerns.

(Wu//EpochTimes)

Faster Spreading Omicron Variants Hit China, Sparking Lockdown Concerns

TUESDAY, JUL 19, 2022 – 10:45 PM

Authored by Alex Wu via The Epoch Times,

Two, more infectious, COVID-19 Omicron variants were detected in China, and a new round of outbreaks has quickly spread to more than 20 of China’s 31 provinces in 2 weeks. Two big cities in western China have been locked down, while major Chinese port cities are conducting mass testing. All of this is sparking concerns about more lockdowns and economic repercussions.

Fourteen COVID-19 cases were reported on July 17 in China’s southwestern city Chengdu in Sichuan Province. The patients are infected with Omicron variant BA.2.12.1, which hadn’t been seen in China before.

According to mainland Chinese media China Business Network, as of July 18 as many as 10 subvariants of Omicron have been detected across the country since the first locally confirmed case of BA.5 variant was reported in China’s megacity Xi’an on July 6.

Public research data shows that the Omicron BA.2.12.1 variant strain is more infectious than the original variant of Omicron. Its transmission speed is 1.2 times that of the BA.2 variant. Both BA.2.12.1 and BA.5 can escape vaccine-elicited antibodies.

Faster Spreading Variants Causing Lockdowns of Big Cities

On July 18, authorities ordered a 7-day lockdown of Chengdu, the provincial capital with a population of 16.3 million. During that time, nobody is allowed to leave the city without a negative COVID-19 nucleic acid test result from the last 48 hours.

The official notice also states that indoor entertainment venues such as bars, KTVs, gyms, and various public cultural and sports venues in the city are temporarily shut down. Large-scale conferences are not allowed to be held in the city for the time being, in-person training and religious activities are suspended, no catering services for banquets, and various clinics are prohibited from accepting patients with a fever.

As the more infectious variants BA.5 and BA.2.12.1 are spreading in China, authorities in more big cities have ordered lockdowns, partial lockdowns, or district control.

Security staff stand guard at the entrance of a residental area following COVID-19 cases in Zhangye in China’s northwestern Gansu Province, on Oct. 23, 2021. (STR/AFP via Getty Images)

Many areas in Lanzhou, the capital city of Gansu Province, population 3.8 million, are under lockdown, and nearly 10,000 residents have been sent to centralized isolation facilities for quarantine due to the new outbreak.

Ms. Chen, the owner of a restaurant in Chengguan District of Lanzhou, told The Epoch Times on July 18 that the city was shut down last week. “The epidemic here is very serious. The entire area is locked down. All shops and restaurants have been closed since last week. Everyone is ordered to stay at home and not allowed to go out.”

Ms. Zhang, a resident of Yantan Road of Chengguan District in Lanzhou City also told The Epoch Times on July 18 that the city was already under lockdown.

“Because of the outbreak, the whole city of Lanzhou is shut down. You can’t get in. There are policemen standing on the streets, and you are not allowed to walk on the street. Taxi services are stopped. All the communities [neighborhoods] in the city are closed.”

The Epoch Times called Yanbei Street office in Chengguan District and the Lanzhou CDC but couldn’t get through.

Meanwhile, mass COVID-19 testing is conducted in the mega port cities of Shanghai and Tianjin, sparking fears of another round of city-wide lockdowns that would further worsen the Chinese economy and disrupt the global supply chain.

end

HUGE STORY!! The Evergrande situation is morphing into something bigger: Now the mortgage payment boycott is spreading as property suppliers refuse to pay their bills.

(zerohedge)

“We Decided To Stop Paying”: China’s Mortgage Payment Boycott Spreads As Property Suppliers Refuse To Pay Their Bills

WEDNESDAY, JUL 20, 2022 – 03:45 PM

The Great Debt Jubilee is picking up speed: China’s homebuyer mortgage boycott, which prompted Beijing to scramble to avoid a potentially devastating crash in what is the world’s biggest asset…

… is spreading, and according to Bloomberg, some suppliers to Chinese real estate developers are now also refusing to repay bank loans because of unpaid bills owed to them, a sign that the loan boycott that started with homebuyers is starting to spread.

In a jarring case study of what happens when a ponzi scheme goes into reverse, hundreds of contractors to the property industry complained that they can no longer afford to pay their own bills because developers including China Evergrande Group still owe them money, Caixin reported, citing a statement it received from a supplier Tuesday.

Similar to homebuyers who have taken a stand and refuse to pay for properties that remain uncompleted, one group of small businesses and suppliers circulated a letter online saying they will stop repaying debts after Evergrande’s cash crisis left them out of pocket.

“We decided to stop paying all loans and arrears, and advise our peers to decline any requests to be paid on credit or commercial bill,” the group said in the letter dated July 15, which was sent to the developer’s Hubei office. “Evergrande should be held responsible for any consequence that follows because of the chain reaction of the supply-chain crisis.”

As Bloomberg oh so perceptively puts it, “the payments protest is the latest sign of how a movement by homebuyers to boycott mortgages on unfinished homes in China is spreading to affect other sectors in the economy.”

Yes it is, and it’s also why Beijing should be freaking out (if it isn’t), because what is taking place in China is far worse than what took place in March 2020 when the global credit machinery ground to a halt, only back then it’s because there was no other option, now it’s a voluntary development and not even fears of reprisals from China’s ruthless, authoritarian, Lebron-beloved dictatorship is stopping millions of people from calling for a systemic boycott, one which can topple China’s entire $60 trillion financial system in moments.

It’s so bad, even Bloomberg has given up trying to put lipstick on this particular pig:

The development underscores a dilemma for Xi Jinping’s government as it grapples with who to bail out as the country’s property crisis deepens: Relief for some borrowers could prompt threats of non-payment by a whole host of others. While bending to demands for support could put a strain on state finances, ignoring them might lead to a spiral of defaults as more and more borrowers refuse to meet their obligations.

The mortgage strike, which kicked off in late June in a stalled Evergrande development in Jingdezhen, has rapidly grown to at least 301 projects in about 91 cities. The protests have exacerbated the country’s real estate woes and threaten to derail attempts to revive the market amid an economic slowdown. According to some estimates, millions of mortgages are now involved.

On Monday, we reported that as the pressure on Beijing rises to take measures, authorities urged banks to boost lending to builders to help complete the projects, and are also considering giving homeowners a grace period on payments.

Homebuyers’ refusal to pay mortgages stems from the widespread practice in China of selling apartments before they’re built. That practice imploded in the past year, as overleveraged Chinese developers were swept by a wave of insolvency, and have been in crisis mode over debt repayment as funds ran dry, and as construction stopped on more and more projects.

Chinese banks claims that the risks from the housing loan nonpayments are controllable, and so far have disclosed only 2.1 billion yuan ($311 million) of credit at risk. That, of course, is a lie: GF Securities Co. expects that as much as 2 trillion yuan of mortgages could be impacted by the boycott. That’s millions of mortgages.

Overall, Chinese banks sit on 38 trillion yuan of outstanding residential mortgages and 13 trillion yuan of loans to the country’s beleaguered developers.

4/EUROPEAN AFFAIRS//UK AFFAIRS/

GAZPROM//RUSSIA//GERMANY/EU//update

Putin says Russia will honour gas commitments but flows will drop to as much as 20% of capacity depending on the return of the turbine

(zerohedge)

Putin Says Russia Will Honor Gas Commitment But Flows Will Drop As Much As 20% Of Capacity

WEDNESDAY, JUL 20, 2022 – 07:20 AM

With Europe still on edge over the risk of an extended Nord Stream shutdown in 24 hours, moments ago Russian President Vladimir Putin eased tensions when he said that Russia would fulfill its commitments to supply natural gas to Europe, but he warned that flows via the Nord Stream pipeline could be curbed soon if sanctions prevent additional maintenance on its components.

Translation: as we predicted, Putin will resume NS1 flows, but at levels at or below the pre-repair “new normal” of 40%.

As we reported previously, Nord Stream 1, the main artery for Russian gas to Europe, is currently down due to regular maintenance and European governments are worried the Kremlin won’t restore its flow when the work ends Thursday, roughly around the time the ECB announces a historic rate hike (as much as 50bps according to the latest press reports). A prolonged outage could lead to an even greater energy crisis, prompting governments to ration energy, hurting industry and sending the country into recession even faster.

Putin echoed comments made late Tuesday after his visit to Tehran, where the Russian president said that Kremlin-controlled energy exporter Gazprom PJSC, pipeline operator’s majority shareholder, “has always fulfilled and will fulfill all of its obligations.”

But he added that flows might fall to some 20% of capacity as soon as next week if a critical pipeline turbine that was undergoing repairs in Canada isn’t returned to Russia soon. Putin said that another turbine had to go for maintenance on July 26.

Even before the maintenance began, Gazprom last month cut deliveries on the pipeline to 40% of its capacity, blaming Canadian sanctions that had prevented the return of the turbine being repaired there. European officials have dismissed the turbine explanation as a pretext for Moscow to try and wreak economic havoc on the continent.

Germany has been racing to return the turbine to Russia after Canada earlier this month tweaked its own sanctions, allowing turbines for the Nord Stream pipeline to be repaired and returned to Russia.

In response to the threat of a complete Russian shutdown, the European Union has been pressing governments to step up their energy-conservation campaigns, rolling out new plans for possible rationing on Wednesday. The commission’s plan is expected to offer guidelines for curbing energy use and establish criteria governments can use to determine which industries to give priority to if there isn’t enough gas to go around. The guidelines also call for public buildings to limit air conditioning to 77 degrees Fahrenheit and cap thermostats at about 66 degrees during colder months.

Earlier this week, news hit that Gazprom invoked force majeure for its failure to deliver contractually agreed natural-gas shipments, according to European energy companies. It isn’t clear whether the notice—a legal declaration that exempts the company from fulfilling contractual obligations because of circumstances outside its control—covers a potential decision by Russia not to resume Nord Stream flows after the maintenance.

While some European officials have in recent days cast doubt on whether Nord Stream would come back online on Thursday, Putin’s comments helped fuel expectations the pipeline would restart. Separately, flows of gas through the pipeline spiked several times on Tuesday, which analysts say could be pressure tests ahead of the end of the maintenance.

Analysts at Goldman Sachs said they expected the pipeline to come back online Thursday at its pre-maintenance capacity of 40%.

A full stop “would remove flexibility from Russia’s supply decisions, once you’re at zero, there’s only one place to go: up,” the bank wrote in a note to clients on Tuesday, adding that such a scenario would also deprive Russia of gas revenues.

Below we excerpt from the Goldman Q&A (the full note is available to professional subscribers).

1. Why would Russia not keep NS1 at zero?.

Most of the clients we have talked to over the past week are split between the 40% and the 0 flow scenario for NS1 post maintenance, with many market participants in Germany in particular expecting the pipeline to indeed remain at zero. However, we still don’t see NS1 staying at zero as a likely scenario, as (1) it would remove flexibility from Russia’s supply decisions (once you’re at zero, there’s only one place to go: up); (2) it would significantly reduce Russia’s gas revenues, limiting its upside from a potential spike in European gas prices under that scenario; and (3) it would force an even faster rate of gas production shut-ins in Russia. Although we don’t see these shut-ins as a geological/technical issue for Gazprom, they effectively delay an increasing share of its gas revenues to the end of the life of the wells. The large number of clients that have expected the pipeline to remain at zero post maintenance suggests a sell-off in European gas prices from current levels is likely in case NS1 returns to at least 40% of capacity from July 21st. This is in line with today’s TTF move, down 5 EUR at 154 EUR/MWh, following media reports suggesting NS1 will restart below capacity as scheduled. To be clear, under a 40% NS1 flow rate scenario, we don’t believe such lower prices would be sustainable, with a return to a 170 EUR TTF range likely in our view in order to generate enough demand destruction to help take NW European storage to 90% full by end-Oct22.

2. What’s the risk to European gas markets if NS1 flows remain at zero

Under this tightest outcome, even taking into account offsets to the supply losses like coal restarts and government-driven demand destruction, among others, we would expect TTF to average over 210 EUR/MWh in 3Q22. This is based on our expectation that markets (and governments) will act to take NW European gas storage to 90% full ahead of the winter and our estimated demand elasticity of 1 mcm/d per 1.8 EUR/MWh move in price. This scenario would also likely push the Euro area into a clear recession, as recently highlighted by our economists.

3. What changes with the return of the turbine from Canada?.

Not much. Despite the recent focus around the timing of the repaired turbine’s return to Russia, now expected around Jul 24th, after NS1 maintenance is scheduled to end, we don’t believe this will be the sole driver of NS1 flows. In addition to the opaqueness behind the scale of the volume curtailments via NS1 last month, the absence of any Gazprom-driven re-routing of the reduced flows via an alternative pipeline to mitigate the impact to supply suggest Russia’s gas exports are as much a political/economic decision as a technical one.

4. Is it possible to track NS1 flows?

Maintenance is scheduled to end 6am CET this Thursday, July 21st. Intra-day flow data is available on Bloomberg using the OPAL (OPAMRXIF Index) and NEL (NELFPMIF Index) intra-day tickers, which added together show NS1 flows.

5. What is Gazprom’s recent force majeure declaration about?

The recent Gazprom force majeure (FM) declaration retroactively refers to realized export cuts (the NS1 cuts) over the past month, and does not reflect any new changes to gas flows. We see it as an effort by the company not to be seen as liable for the supply cuts to long-term customers observed since mid-June. We do not see this FM claim as particularly relevant to our NS1 flow expectations going forward.

6. Can Russian gas be diverted elsewhere, if it doesn’t flow to Europe?

Not really. The lack of pipeline connectivity between that particular producing region and alternative buyers has resulted in Russian gas export curtailments being split between domestic storage injections and production shut-ins. Specifically, Gazprom’s published data suggest its production is down 10% year-on-year year to date, and down more than 35% year-on-year for the fist half of July. We do not expect this to pose a geological issue, though, given Gazprom’s demonstrated ability to historically swing production up and down without damage to gas well pressure. The most recent example of that was its 50 Bcm production swing in 2020, during the peak of the pandemic. By 2021, Gazprom brought it all back and more, as demand recovered. We also note that, because Gazprom does not rely significantly on associated gas, its gas shut-in process has not impacted Russia’s oil production.

7. Why are our winter gas price forecasts so much lower than summer?

Although we are used to thinking of natural gas prices as being higher in winter than in summer, as that’s when demand is highest, we believe the current tightness in European gas balances flips that around. Without a recovery in Russian gas flows to Europe, the region’s blackout and heating risks in winter are potentially so high that we expect markets (and governments) to act now, in summer, to fix the problem. In particular, our 171 EUR/MWh TTF price forecast for 3Q22 under a 40% NS1 flow rate scenario solves for end-summer storage at 90% full. And the more work (i.e., storage building) is done in summer, the lower the work for prices to do in winter. This is especially the case in 1Q, because winter weather uncertainty drops significantly in the second half of winter vs the first half, taking our spot gas price forecasts then below 80 EUR. That said, this lower price would ultimately be driven higher once again during summer 2023 in our view, as price-driven demand destruction would likely be top of mind once more in the absence of normalized Russian gas flows

end

EU/

Facing a shortage of Russian gas, the EU is seeking a 15% in gas consumption from EU countries.

(zerohedge)

EU Seeks 15% Cut In Gas Consumption, Including Mandatory Limits In Supply Emergency

WEDNESDAY, JUL 20, 2022 – 09:27 AM

The European Commission on Wednesday asserted “there is no reason to believe this pattern will change” regarding diminishing Russian natural gas flows ahead of winter, issuing a new sweeping plan in a press communique that calls on member states to immediately and ‘voluntarily’ slash gas consumption.

It proposes a significant cut in gas consumption by 15% over the next eight months, and will require drastic action across industries, power producers and even citizens in their households, according to Bloomberg.

The EU executive noted that initial cuts would be voluntary cuts; however, in an unprecedented proposal the Commission has requested that in the scenario of an EU-wide alert “when there is a substantial risk of a severe gas shortage or an exceptionally high demand of gas occurs, which results in a significant deterioration of the gas supply situation” – that it possess the power to impose mandatory reductions

The “Save gas for a safe winter” communique is introduced by blaming and condemning the Kremlin’s “weaponisization of gas exports”, per the document

The European Union faces the risk of further gas supply cuts from Russia, due to the Kremlin’s weaponisation of gas exports, with almost half of our Member States already affected by reduced deliveries. Taking action now can reduce both the risk and the costs for Europe in case of further or full disruption, strengthening European energy resilience.  

The Commission is therefore proposing today a new legislative tool and a European Gas Demand Reduction Plan, to reduce gas use in Europe by 15% until next spring. All consumers, public administrations, households, owners of public buildings, power suppliers and industry can and should take measures to save gas. The Commission will also accelerate work on supply diversification, including joint purchasing of gas to strengthen the EU’s possibility of sourcing alternative gas deliveries.

As for the proposed “right” to declare a union-wide alert which would trigger mandatory powers exercised by the European executive, this language is contained in the following section: 

The Commission is proposing a new Council Regulation on Coordinated Demand Reduction Measures for Gas, based on Article 122 of the Treaty. The new Regulation would set a target for all Member States to reduce gas demand by 15% between 1 August 2022 and 31 March 2023. The new Regulation would also give the Commission the possibility to declare, after consulting Member States, a ‘Union Alert’ on security of supply, imposing a mandatory gas demand reduction on all Member States.

The Union Alert can be triggered when there is a substantial risk of a severe gas shortage or an exceptionally high gas demand. Member States should update their national emergency plans by the end of September to show how they intend to meet the reduction target, and should report to the Commission on progress every two months. Member States requesting solidarity gas supplies will be required to demonstrate the measures they have taken to reduce demand domestically.

The extraordinary measures (and powers apparently being claimed and adopted by Brussels) come amid what one analyst cited in Bloomberg has called possibly Europe’s “greatest energy crisis in its history” – also as the fate of Nord Stream 1 to Germany’s near and future term operationality remains unclear.

And it’s looking to last not just this upcoming winter, but years, as Bloomberg’s Javier Blas points out, “The European Commission is not only warning about gas supply this coming winter, but also flagging problems for the 2023-24 winter (the reason is that if you draw all your stocks this winter, you are in trouble for the next one).”

You will find more infographics at Statista

This plus talking up Putin’s ‘weaponization’ of energy, which casts the crisis in terms akin to fighting a war, naturally allowed Ursula von der Leyen to go so far as to claim the EU can enforce a slowdown in gas consumption. Of course, not even considering the mass pushback and protests from EU populations given even “households” would be targeted for forced cuts mandated by national governments via directives by Brussels, but wayward outlier countries like Viktor Orbán’s Hungary would unlikely sign on. Amid all of this, von der Leyen also announced that a seventh round of sanctions targeting Russia is currently underway.

END

A must read…Jim Reid Deutsche bank

(Jim Reid)

What The Reopening Of Nord Stream 1 Means For Europe

WEDNESDAY, JUL 20, 2022 – 11:46 AM

Over the last 24 hours it has become, Deutsche Bank’s Jim Reid writes, clearer that Russia will recommence gas flows when the Nord Stream pipeline reopens tomorrow. Indeed, Putin’s comments last night and again this morning, suggest we should have initial flows at the pre-maintenance volumes of 40% capacity.

To be sure, in light of “Doomsday” expectations as recently as one week ago, it is safe to say this is notably better and quicker than the worst case assumed by economists and pundits over the last couple of weeks. However, as Reid notes, there are near-term hurdles: even with the return of the turbine under maintenance in Canada that is expected back next week, Putin has warned that another turbine will require works around July 26th and, if the turbine that was in Canada does not return, then capacity may drop to 20%.

There are also doubts that Putin’s claims should be taken at face value, with German officials saying earlier this week that the turbine being returned from Canada was not due to be used until September, although with Putin calling all the shots, it’s not like Germany can do anything about this.

Incidentally, overnight Goldman energy analyst Samantha Dart looked at the question of what changes with the return of the NS1 turbine from Canada. Her response? “Not much.” She adds that “despite the recent focus around the timing of the repaired turbine’s return to Russia, now expected around Jul 24th, after NS1 maintenance is scheduled to end, we don’t believe this will be the sole driver of NS1 flows. In addition to the opaqueness behind the scale of the volume curtailments via NS1 last month, the absence of any Gazprom-driven re-routing of the reduced flows via an alternative pipeline to mitigate the impact to supply suggest Russia’s gas exports are as much a political/economic decision as a technical one.”

They sure are, but in any case, according to Deutsche Bank if we do manage constant 40% flows, the bank believes that Germany can just about get through the winter with a mild demand curtailment and quite high gas imports from other countries (including indirect LNG imports).

In summary, Reid warns to “expect the uncertainty to continue for many months and potential gas flows be linked to various geopolitical themes such as a cease-fire with Ukraine, Russian oil caps etc.” Furthermore, it’s unlikely that even if supply does hit 40% that you will have any certainty that it will remain there.

As such, Europe will be planning for reduced energy consumption this winter which will hit growth and push the continent into recession. Uncertainty will remain for the next few quarters but the news flow has been more positive for Europe over the last 24 hours.

For more on this topic Deutsche Bank has published a lengthy note “Thoughts ahead of scheduled NS1 re-opening” available to pro subscribers.

DENMARK

Denmark is to start demolishing parts of migrant ghettos.  This will lead to further problems in non ghetto areas.

(Watson/SummitNews)

Denmark To Start Demolishing Parts Of Migrant Ghettos

WEDNESDAY, JUL 20, 2022 – 03:30 AM

Authored by Paul Joseph Watson via Summit News,

Denmark is to start demolishing parts of migrant ghettos and moving people elsewhere in a bid to put an end to ‘parallel societies’ that have led to high crime and social dislocation.

The areas targeted by the policy are specifically where there are demographic concentrations of people with non-western backgrounds who are more prone to criminality and joblessness.

“Housing areas must have over 1,000 residents, of which over 50 percent have non-Western nationality or heritage, and fulfil two out of four criteria pertaining to the proportion of residents who are unemployed and aren’t pursuing an education, have criminal convictions involving arms or drugs, are low income, and lastly, have a basic school education or less,” reports Sputnik.

The policy has been called a “huge housing experiment” and will include forced evictions in an effort to create more mixed populations, eliminating ghettos where unintegrated migrants congregate and refuse to assimilate.

In Gellerupparken, more than 1,000 homes have been marked for demolition, with 5,000 residents having already been moved on.

The plan is part of a broader move to ensure that areas of the country are populated by no more than 30 per cent of people from a non-western background.

Despite attempts by the United Nations to argue that the policy will create “ethnic discrimination,” over the course of the next 10 years it will ensure that at least 70% of the population living in allocated areas have a western ethnic background.

Citizens from outside the EU, EEA or Switzerland will also be denied municipal housing support as will those with a criminal record.

By pursuing the same policy, the Scandinavian country was already able to reduce migrant ghettos from 22 in 2018 down to 15 as of last year.

As we highlighted last year, the net cost of non-western immigration to Denmark, after tax contributions have been deducted, has been revealed to be nearly $5 billion a year.

Perhaps the Danish government implemented the migrant policy after reading a 2019 study by academics from the University of Copenhagen which found that diversity is not a strength.

The study sought to answer whether “continued immigration and corresponding growing ethnic diversity” was having a positive impact on community cohesion.

The researchers found the opposite to be the case.

Studying existing literature and also carrying out a meta-analysis of 1,001 estimates from 87 studies, the researchers concluded, “We find a statistically significant negative relationship between ethnic diversity and social trust across all studies.”

Eric Kaufmann, Professor of Politics at the Birkbeck University of London, also tweeted about the study, commenting, “Higher diversity *is* significantly associated with lower trust in communities, even when controlling for deprivation.”

*  *  *

END

UK

UK to develop high energy laser weapons as the Ukraine war fuels demand

(Zhang/EpochTimes)

New UK Hub To Develop Anti-Drone Laser Weapons As Ukraine War Fuels Demand

WEDNESDAY, JUL 20, 2022 – 05:00 AM

Authored by Alexander Zhang via The Epoch Times,

A multinational defence firm will build a new weapons hub in Scotland to develop laser weapons that target small attack drones.

The defence and intelligence technology firm Raytheon UK said the war in Ukraine has highlighted the threat posed by drones.

“We’ve all seen that asymmetric threats like drones, rockets, artillery, and mortars are a serious problem, and demand is spiking for cost-effective lasers to defeat them,” said Michael Hofle, senior director of High Energy Lasers at Raytheon Intelligence and Space.

Experts expect high-energy lasers to make up as much as 30 percent of an air defence’s infrastructure in the future, said John Gallagher, managing director of weapons and sensors at Raytheon UK.

The planned “advanced laser integration centre” will be a European hub for high-energy laser weaponry, the firm said, and will be based in Livingston, some 15 miles from Edinburgh.

The centre will focus on the testing, fielding, and maintenance of defensive high-energy laser (HEL) weapons.

Gallagher said that establishing a regional laser integration centre in the UK is “an important step to deliver advanced defensive technology where it’s needed, while reducing overall costs of these systems.”

‘Novel Weapons Programme’

Last September, the Ministry of Defence (MoD) said the British armed forces would trial laser and radio frequency weapons as part of a “novel weapons programme.”

These new weapons will be integrated onto existing platforms for the Royal Navy and British Army and will undergo user experimentation from 2023 to 2025, the ministry said.

The first laser device will be fitted onto a Royal Navy Type 23 frigate to detect, track, engage, and counter unmanned aerial vehicles (UAV).

The MoD awarded a demonstrator contract to Raytheon UK, which was tasked to provide a high-energy laser weapon system to be installed on the UK’s Wolfhound land vehicle.

According to the MoD, these “directed energy weapons,” which are powered by electricity and operate without ammunition, will significantly reduce operating costs, increase platform endurance, and provide “unprecedented offensive and defensive flexibility to personnel on the front line.”

Russia Claims to Be Using Lasers in Ukraine

Laser weapons are reportedly already being used in the war in Ukraine.

Russia said in May that its armed forces were using a new generation of powerful laser weapons in Ukraine to burn up drones, deploying some of Moscow’s secret weapons to counter a flood of Western arms supplied to its former Soviet neighbour.

Yury Borisov, the deputy prime minister in charge of military development, told a conference in Moscow that a laser weapon called Peresvet was already being widely deployed and it could blind satellites up to 1,500 kilometres (930 miles) above Earth.

He said, though, that there were already more powerful Russian systems than Peresvet that could burn up drones and other equipment.

Borisov told Russian state television that the first prototypes of such weapons were already being used in Ukraine. He said the weapon was called “Zadira.”

end

ITALY

Italian bond yield rise after Salvini threatens the coalition

(zerohedge)

Italian Stocks/Bonds Reverse Draghi Gains As Salvini Threatens Coalition

WEDNESDAY, JUL 20, 2022 – 08:45 AM

Update (0855ET): Well that optimism lasted less than even we expected as League leader Salvini has threatened that his party will only remain in government if 5-Star is not in the coalition.

That sent Italian yields spiking back higher…

Source: Bloomberg

And Italian stocks lower….

Source: Bloomberg

How long before Draghi resigns again?

There is much at stake: a government collapse could worsen social ills in a period of rampant inflation, delay the budget, threaten EU post-pandemic recovery funds and send jittery markets into a tailspin.

*  *  *

In what smells like a ‘whatever it takes 2.0’ moment, Italian Prime Minister Mario Draghi said he was willing to remain in power but warned he would only reverse a previous decision to quit – and prevent Italy from tumbling into early elections – if his fractious coalition partners backed his reform agenda.

Draghi’s reassurance/threat comes a day before The ECB is set to hike rates for the first time since 2011.

As The FT reports, votes in parliament are due on Wednesday and Thursday that will serve as de facto confidence votes on his administration.

“The only reason I am here… is because Italians have asked me to stay,” Draghi told the Senate.

“But are you ready to rebuild? Are you? This is not an answer you have to give me – but you must answer the Italian people.”

Draghi threatened Five-Star leader Giuseppe Conte that his calls for higher public spending on social welfare measures is a no-go, stating that such calls would have to stop  with parties committing to compromise and to undertake difficult reforms in order to remain on a path to fiscal rectitude – if he was to remain in office.

“Italy doesn’t need a facade of confidence that evaporates before unpopular measures,” he said.

“We need a new pact of confidence that must be transparent and concrete.”

Parliamentarians will now debate for over five hours, setting out their positions. Draghi will then respond, before a vote later Wednesday.

“Draghi did not compromise. He was very tough,” Francesco Galietti, Policy Sonar analyst, told AFP.

“The entire speech was stick and carrot – though much more stick than carrot”.

The comments sent Italian bond yields lower, erasing most of the post-confidence-vote, post-resignation spike that prompted a wave of ‘defragmentation’ fears once again…

Source: Bloomberg

Interestingly Italian stocks are not loving the news…

Given that this is Italy, we suspect the market’s hope for a renewed coalition continuing forward is misplaced, but hey, hope has been a successful strategy for the last decade after all (backed by central bank liquidity of course).

END

The Italian Government will fall and that will surely suspend Lagarde’s attempt to raise rates with an election looming for Italy. Lagarde will be buying Italian debt hand over fist

(zerohedge)

Italy Government On Verge Of Collapse After Coalition Members Abandon Draghi; Euro Tumbles

WEDNESDAY, JUL 20, 2022 – 01:37 PM

Since the fall of the Berlin Wall, Italy has had 19 governments, lasting on average just over 18 months. As such, Mario Draghi’s government – which is about to collapse – is about to make it 20 failed government (but at least Draghi’s 17 months lasted right in line with the average).

Moments ago, Italy’s center-right League headed by Matteo Salvini party indicated that it will join Silvio Berlusconi’s Forza Italia in skipping a confidence vote over Prime Minister Mario Draghi’s government, assuring that Draghi’s government will collapse leading to snap elections as soon as the fall.

The news follows a speech earlier on Wednesday, in which the former Goldman partner and ECB head indicated he was willing to stay on as prime minister if his coalition partners could guarantee “sincere and concrete support” for him to continue, and sought a vote of confidence.

Well, Draghi’s partners couldn’t reach an agreement, assuring that Draghi’s government will fail the coming vote of confidence and ushering in fresh Italian elections, and sparking a fresh leg in the European government crisis, which takes place just one day before the ECB had leaked it could hike as much as 50bps.

Well, we can certainly remove that option, as there is no way Lagarde will tighten to 0% at a time when Italian bonds are about to implode on the spiking political uncertainty.

It’s also why the EUR tumbled to session lows just above 1.01 after rising above 1.02 yesterday having slumped below parity late last week.

The news was also enough to hammer the US stock rally, and undo 3 hours of gains in just minutes…

… although it appears that algos have misread this particular move, since a political crisis in Italy not only assures that the ECB will not be able to hike as much as it wants…

… but will force Lagarde to keep buying Italian bonds indefinitely, doing away with any pretense the central bank will ever be able to do away with QE, which in turn will also force the Fed to halt its tightening path unless Powell wants to send the US Dollar into deep space orbit.

END

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS/

RUSSIA/UKRAINE

Pointless destruction

Inbox

Robert Hryniak4:08 PM (4 minutes ago)
to

 
7/20/22 
By Avia.Pro 
Translated from Russian

Antonovsky bridge across the Dnieper in the city of Kherson was destroyed and blocked for the movement of freight transport after the attacks of the Armed Forces of Ukraine.

The Ukrainian military carried out at least 12 Himars multiple rocket launcher strikes on the Antonovsky bridge, which allowed land communication with Kherson across the Dnieper. As a result of multiple hits, the bridge was destroyed and at the moment its operation is not possible. This was stated by the deputy head of the military-civilian administration (CAA) of the Kherson region Kirill Stremousov.

This morning, 12 rockets were fired at the Antonovsky Bridge, 11 of which accurately hit the bridge structure, as a result of which the latter was seriously damaged. At the moment, there is a very serious risk of the collapse of the bridge as well, which in turn creates additional risks that Ukrainian troops could immediately launch a counteroffensive, although such a probability is quite small.

“The bridge is actually destroyed. If the strikes continue, it may collapse , ”Stremousov said.

Experts believe that the Ukrainian military can take advantage of the situation with the destruction of the Antonovsky bridge in order to strengthen their presence in the region.

Source:

https://avia.pro/news/vsu-razrushili-edinstvennyy-most-vedushchiy-v-herson-cherez-dnepr

end

The theatre of the absurd

Inbox

Robert Hryniak4:13 PM (2 minutes ago)
to

Cannot imagine why the ukies do not get they do not matter when it comes to European theater … it was always about money and not them 

7/20/22 
By WarNews 24/7 
Translated from Greek

Shock in Ukraine: The united front of sanctions broke

The EU decided to unfreeze Russian bank deposits under the guise of a food crisis, but the reality is that Germany agreed to exchange part of the sanctions for… some natural gas from Gazprom.

The news has sent shockwaves through Ukraine, which sees itself losing support within the EU.

Pres. Putin: Gazprom will fulfill its obligations 
In fact, Russian President Putin has confirmed that the Kremlin-controlled energy giant Gazprom is ready to fulfill its obligations regarding natural gas exports.

Speaking to reporters after visiting Tehran, where he met with the leaders of Turkey and Iran, Putin also said that Gazprom was not responsible for the reduction in gas flows, including Kyiv’s interruption of transit through Ukraine in Europe.

However, he warned that flows through the Nord Stream 1 pipeline, the largest pipeline carrying Russian natural gas to Europe, could fall further due to slow progress in equipment maintenance.

The pipeline remains idle for scheduled annual maintenance from July 11 to 21.

Afterwards, Putin emphasized that ” Europe is responsible for the energy crisis, which decided to abandon traditional energy sources and experiment with new energy sources such as renewable sources.

I don’t know if it’s worth going into details about the energy policy of European countries that have neglected the importance of traditional forms of energy and have relied on non-traditional forms.

They are experts in the field of non-traditional relationships, and in the field of energy, they have decided to rely on non-traditional types of energy.

Gazprom always fulfills and intends to fulfill its obligations”, but faces obstacles – for example, Ukraine “for no reason” closed one of the natural gas supply routes passing through its territory.

In addition, Gazprom has not yet received turbine data for Nord Stream 1, without which the volume of supplies through this natural gas pipeline will decrease by 50%.

Russia is ready to start Nord Stream 2, but now there are problems with this route as well – 50% of the volume of natural gas intended for this route had to be withdrawn “for internal consumption”.

The European Union unfreezes Russian bank deposits 
Two sources in Moscow told Reuters that natural gas flows through the Nord Stream 1 pipeline resumed as normal from Thursday after scheduled maintenance was completed.

Earlier, however, the Wall Street Journal reported, citing European budget commissioner Johannes Hahn, that the European Commission does not expect the pipeline to reopen after maintenance work.

At the same time, the Russian news agency Tass – citing Reuters – reports that the European Union intends to unfreeze some of the deposits of Russian banks in order to facilitate transactions in the global trade of food and fertilizers.

What does this mean; But profits and income for Russia!

According to the agency, the new measures will be taken today and will lead to the release of the “financial resources” of the Russian banks VTB, Sovcombank, Promsvyazbank, Novikombank, Otkritie Bank, Rossiya Bank and VEB.

The EU also plans to facilitate food exports from Russian ports, which were suspended due to sanctions, although these measures did not affect food exports (so what will it facilitate? rather Russia itself..)

According to the draft document, the funds will be unfrozen after “it is established that they are necessary for the purchase, import or transport of agricultural products, fertilizers and food…

Separately, in a decision to be adopted today, on July 20, Sberbank, Russia’s biggest bank, will also be subject to a freeze on its assets, with the exception of funds needed for food trade, an EU official told Reuters.

Will the lifting of sanctions just stay there or will there be other “under the carpet” deals to get Nord Stream 1 back up and running?

In any case, it is a huge victory for Putin. Russia’s president appears to have cornered the weak EU with a judo handle, exposing internal weaknesses and contradictions. The EU is proceeding with a forced folding…

source: 
https://warnews247.gr/lavi-tzounto-apo-v-poutin-stin-ee-i-evropaiki-enosi-xepagosei-katatheseis-rosikon-trapezon-me-antallagma-trofima-f-a-apo-gazprom-sok-stin-oukrania/

6. GLOBAL ISSUES AND COVID COMMENTARIES

Nothing new here

(Philips/EpochTimes)

Ex-COVID Czar Birx Admits Virus “Came Out Of The Box Ready To Infect”

TUESDAY, JUL 19, 2022 – 09:25 PM

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former top White House COVID-19 adviser Deborah Birx said Sunday that COVID-19 “came out of the box ready to infect” when it was first detected in Wuhan, China, in 2019.

Speaking to the Daily Mail, Birx said that COVID-19 “was already more infectious than flu when it first arrived,” saying that most viruses take months or years to become highly transmissible among humans.

Birx, who had worked under former President Donald Trump, told the paper that either COVID-19 was “an abnormal thing of nature” or that Chinese scientists at the Wuhan Institute of Virology were “working on coronavirus vaccines.” Researchers could have contracted the virus before spreading it to others or it escaped from the lab, she said.

Lab Leak

It happens, labs aren’t perfect, people aren’t perfect, we make mistakes and there can be contamination,” Birx said, noting that individuals with COVID-19 can be asymptomatic. “Someone working in the lab with one of the strains could’ve caught it and not known they had it,” she said.

The Chinese Communist Party (CCP) could have reduced deaths if officials told health leaders that the virus can spread asymptomatically, she said.

China was implying that they were containing it, but asymptomatic spread cannot be contained without testing,” Birx told the publication. “I think the world lost several months of preparation because we were thinking there wasn’t that level of human-to-human spread when there clearly was.”

While some news outlets and so-called fact-checking websites labeled the lab leak hypothesis as a conspiracy theory, top U.S. officials conceded later in 2021 that it’s within the realm of possibility. A report released by the 17-agency Intelligence Community in 2021 shows that some federal officials believe the virus emerged from the Wuhan laboratory, according to the White House in a May 26 news release.

Chinese officials, meanwhile, have claimed the virus was first found in December 2019, emerging from a wet market in Wuhan about 10 miles from the lab’s location. It was later revealed by the National Institutes of Health that it provided funding to researchers who were carrying out research on bat coronaviruses.

Read more here…

end

Dr Paul Alexander

a must view….

Dr. Geert Vanden Bossche & Dr. Paul Alexander discuss dangers of the COVID shots for children: ”These vaccines are extremely dangerous for children”; I repost this critical video to save our kids

Dr. Paul AlexanderJul 20

Video

GLOBAL COMMENTARIES/SUPPLY ISSUES

GLOBE//CLIMATE CHANGE AGENDA//CANADA

VACCINE INJURY/

Vaccine Impact

Wealthiest Criminal in the U.S. Continues to be Immune from Justice

July 19, 2022 6:17 pm

JPMorgan Chase is the largest federally-insured bank in the United States. It is also one of the largest trading houses on Wall Street. That’s the Faustian bargain the Clinton administration entered into with Wall Street when it repealed the Glass-Steagall Act in 1999. According to data from the FDIC, as of June 30 of last year, JPMorgan Chase Bank N.A. had 4,925 branches in 44 U.S. states holding $2.01 trillion in deposits. Many of those deposits belong to mom and pop savers who have no idea that the bank has admitted to five criminal felony counts since 2014 and has a rap sheet that is the envy of the Gambino crime family. The bulk of Americans also do not know that neither federal regulators nor Congress nor the Board of Directors of JPMorgan Chase have demanded that the Chairman and CEO of JPMorgan Chase, Jamie Dimon, who has sat at the helm of the bank throughout this crime spree, be sacked. Dimon’s tenure has been propped up by a public relations machine and an obsequious mainstream media. Corruption of this magnitude can’t be swept under the rug forever, however. Today, three cases are playing out simultaneously in federal courts. Observed together, which no member of mainstream media is currently doing, they paint an undeniable picture of a bank which has adopted fraud as a profitable business model.

Read More…


MICHAEL EVERY

Michael Every  on the day’s most important topics

And now Michael Every…(MAREY)

Rabobank: “We Are Not Convinced Of The Case For An “Unexpected” 50bps Hike By The ECB”

WEDNESDAY, JUL 20, 2022 – 10:45 AM

By Philip Marey, Senior US Strategist at Rabobank

EUR/USD jumped above 1.02 yesterday morning after reports that the ECB may consider a 50 bps hike on Thursday, instead of the 25 bps outlined at the June policy meeting.

In contrast, during the weekend, the Fed entered its blackout period after Fed speakers pushed back against the possibility of a 100 bps rate hike on July 27. The idea of an even larger than 75 bps hike gained traction in markets after the US CPI data surprised to the upside on July 13. However, with Fed speakers less enthusiastic about 100 bps than markets, the latter have moderated their expectations and at the moment futures markets are pricing in only about 81 bps for the July meeting. These diminished expectations are also keeping the upward potential for 10 year US treasury yields in check and the downward potential for EUR/USD, which has been trading above parity again this week.

While the Fed has been slow to react to the rise in inflation that started last year, the ECB has had an even longer sleep. This has contributed to EUR/USD falling to parity, but speculation about a more aggressive move by the ECB this week is causing a modest rebound of the euro.

The timing of this report certainly strikes us as odd. Our ECB watcher Bas van Geffen notes that if there was serious and (near) unanimous concern about the inflation outlook, and the Council was genuinely preparing for a 50bp hike, they could have started flagging that possibility well before their blackout period. Yesterday’s final release of the June inflation data confirms that the modest decline in core inflation was largely the result of the German government’s decision to offer public transit tickets at steep discounts, and this arguably adds to the ECB’s worries about the stickiness of inflation. However, we find it hard to believe that the ECB hadn’t already drawn these conclusions when the preliminary data were released earlier this month. In other words, little seems to have changed since the start of the blackout period. And we are therefore still not entirely convinced of the case for an ‘unexpected’ 50, although the upside risk of a 50bp move has risen with these reports and the resulting shift in market pricing ahead of the meeting.

After all, a bigger hike may be used as a bargaining chip in the difficult discussions on the anti-fragmentation instrument – which may become a heated debate if Lagarde pushes for a decision on the instrument at this meeting, as reported yesterday as well. And these ‘leaks’ should therefore also be seen in light of the horse-trading between the hawks and the doves in the ECB’s Governing Council, in contrast to the coordinated signal given by the Fed’s Board of Governors to the Wall Street Journal prior to the Fed’s 75bps (instead of 50bps) hike last month. As our ECB watchers explain, the hawks are probably increasingly concerned that their window of opportunity to hike is closing as the economy slows. Assuming that the ECB does announce the Transmission Protection Mechanism (TPM), we cannot rule out that it is accompanied by a 50bp hike: it could be the carrot that west the hawks on board with looser TPM modalities. However, we believe that the Council prefers to wait and see how their new instrument is received by markets.

For the Fed, which meets next Tuesday and Wednesday, we expect a 75 bps hike, followed by 50 bps hikes at each meeting in the remainder of the year. This would raise the target range for the federal funds rate to 3.75-4.00% by the end of the year, which is more than indicated by the FOMC’s dot plot (3.4%) and futures markets (3.55%). However, we think that the Fed is still underestimating the persistence in inflation, and has yet to acknowledge that a wage-price spiral has already started in the US. US CPI inflation rose to 9.1% in June and its core measure stands at 5.9%. With shelter already at 5.6% year-on-year and rising, core inflation is likely to remain persistent. Keep in mind that shelter accounts for 41% of the core CPI and tends to lag house prices. Shelter is likely to rise above 6.0% year-on-year later this year and remain elevated next year.

At the same time, nominal wages have risen by 6.7% year-on-year in July according to the Atlanta Fed’s wage growth tracker. This does suggest that the wage-price spiral that the Fed still hopes to avert, is already here.

7. OIL//OIL ISSUES//NATURAL GAS//ELECTRICITY ISSUES/USA//GLOBE

China Spent 72% More On Russian Oil In June As Moscow Remains Top Chinese Supplier; Saudi Volumes Tumble

WEDNESDAY, JUL 20, 2022 – 11:05 AM

Remember when sanctions on Russia were meant to cripple the country’s economy and destroy the ruble, and then all the deep state plans imploded spectacularly as the Russian current account surplus soared to a record, and the ruble hit decade highs?  Well, thank China for all that (which the Biden regime will never stand up against as Beijing possesses all that compromising Hunter/Joe information).

According to the latest Chinese customs data, Russia held the top spot as China’s biggest oil supplier for a second month in June as Chinese buyers (alongside India) cashed in on Moscow’s deeply discounted supplies, slashing more costly shipments from Saudi Arabia, which instead target the energy hyperinflation-ravaged wasteland that is Europe.

Imports of Russian oil, including supplies pumped via the East Siberia Pacific Ocean (ESPO) pipeline and seaborne shipments from Russia’s European and Far Eastern ports, totaled 7.29 million tonnes, up nearly 10% from a year ago, according to data from the Chinese General Administration of Customs.

Despite the pervasive discounts slapped on Russian oil, this translated into much higher dollar terms too: China spent 72% more on Russian energy purchases in June from a year earlier, according to Bloomberg. Chinese buyers spent a combined $6.4 billion, up from $3.7 billion in the same month the previous year, according to customs data released today.

It brings China’s total outlay on Russian energy from March to June to $25.3 billion, nearly double the $13.5 billion spent in the same four months of 2021!

Still, as Reuters calculates, Russian supplies in June, equivalent to about 1.77 million barrels per day (bpd), were below May’s record of close to 2 million bpd, a level analysts had expected to be maintained, likely as a result of continued covid zero shutdowns across China which limited demand.

Russia’s gain is Saudi Arabia’s loss: China imported 5.06 million tonnes from Saudi Arabia, or 1.23 million bpd, down from 1.84 million bpd in May and 30% below the level in June last year. 

On a year-to-date basis, Chinese imports from Russia totaled 41.3 million tonnes (1.67 million bpd), up 4% on the year but still trailing behind Saudi Arabia, which supplied 43.3 million tonnes (1.75 million bpd), a volume 1% below year-ago level.

China’s total crude oil imports sank in June to near a four-year low as rigid lockdowns to contain the spread of coronavirus reduced fuel demand. The rise in imports from Russia also displaced supplies from Angola and Brazil.

Notably, the Customs data showed China imported 260,000 tonnes of Iranian crude oil last month, its fourth official shipment of Iran oil since last December.  Despite U.S. sanctions on Iran, China has kept taking Iranian oil, usually passed off as supplies from other countries. These supplies, roughly 7% of China’s total crude oil imports, are facing competition from the growing Russian flows

On the other hand, customs reported zero imports from Venezuela. State oil firms have shunned purchases since late 2019 for fear of falling foul of secondary U.S. sanctions, although that doesn’t explain their eagerness to indicate Iranian imports.

And indeed, hinting that there’s more than meets the eye, imports from Malaysia, often used as a transfer point in the past two years for oil originating from Iran and Venezuela, soared 126% year-on-year to 2.65 million tonnes.

Separately, data also showed China’s imports of Russian liquefied natural gas (LNG) totalled 520,530 tonnes, the second highest monthly volume since at least the start of 2021. Russian LNG imports for the first half of 2022 – mostly from the Sakhalin-2 project in the Far East and Yamal LNG in Russian Arctic – were up almost 30% on the year to 2.36 million tonnes, the data showed. This is against a 21% year-on-year fall in the nation’s total LNG imports during the same period.

end

Saudi Arabia Reveals Upper Limits Of Oil Production Nears As World Structurally Short

WEDNESDAY, JUL 20, 2022 – 12:25 PM

Saudi Arabia, the world’s largest crude oil exporter, doesn’t have enough production capacity to boost oil production in a world still hungry for fossil fuels, implying that President Biden’s recent trip to the Kingdom was a waste of time.

Crown Prince Mohammed bin Salman (MbS) told the leaders of the US, the Gulf Cooperation Council (GCC) states, Jordan, Egypt, and Iraq at a meeting this weekend that additional capacity to increase production to 13 million barrels per day (bpd) by 2027 will be challenging.

WSJ’s energy correspondent Summer Said the Kingdom’s production stands around 10.5 million bpd and has a production capacity ceiling of 12 million bpd. That means the potential output increase is only 1.5 million bpd. And another million bpd in five years. 

Infographic: Is Saudi Oil Production at Capacity? | Statista

Summer spoke with people familiar with Saudi oil flows and said the Kingdom would struggle to produce another half million bpd at 11 million bpd. And it would be tough even to get production at 12 million bpd. They gave a handful of reasons why bringing on spare capacity would be a troubling task, such as maintenance requirements, declining production at some oil-producing fields, and technical issues involving pressure levels. It was also noted that when state oil company Aramco reduced drilling during the early days of the virus pandemic because of plunging global demand, boosting output rapidly by injecting wells with fluids to increase production could cause longer-term damage. 

The revelation that the Kingdom nears the long-term upper limit should not come as a surprise to manyas French President Emmanuel Macron stated at the recent G7 meeting that spare production capacity was very limited for the Saudis and UAE.

Bloomberg’s energy reporter Javier Blas opined this in a Bloomberg Opinion piece: 

Saudi Arabia, the holder of the world’s largest oil reserves, is telling the world that in the not-so-distant future it “will not have any additional capacity to increase production.”Let that sink in.  

Blas pointed out the output contain could be the lack of investment to boost output, or what’s worse: “If money isn’t the constraint, then it must be geology.” 

For years, Saudi Arabia has brought new oil fields online to offset the natural decline of its aging reservoirs and allowed Ghawar, the world’s biggest oil field, to run at lower rates. As it seeks to boost production capacity and not just offset natural declines, Aramco is increasingly turning to more expensive offshore reservoirs. Perhaps Riyadh is less confident in its ability to add new oilfields. Ghawar itself is pumping far less than the market assumed. For years, the conventional wisdom was that the field was able to produce about 5 million barrels, but in 2019 Aramco disclosed that Ghawar’s maximum capacity was 3.8 million.

If the obstacle to boosting production is geology, rather than pessimism about future oil demand, the world faces a rocky period if consumption turns to be stronger than currently expected. For now, Saudi peak production is a relatively distant matter, at least five years away. More urgent is whether Riyadh would be able to sustain its current output of 11 million — something it has achieved only twice in its history, and then only briefly — let alone increase it further. But that ceiling will matter towards the end of the decade, and perhaps even earlier.

The conservation among energy analysts is all about spare capacity at the moment. 

What comes next is an OPEC+ meeting scheduled for Aug. 3. The group has called for incremental, monthly increases in output. However, some members have expressed that they cannot meet their share of production. 

The world is structurally short production capacity at a time demand growth remains robust. Also, Russian energy supplies are declining due to the impact of the Ukraine invasion. JPM’s commodities team recently warned crude Brent prices could rocket higher if Russian production is slashed, with forecasts as high as $380 in a worst-case scenario

Brent prices remain over $105 on Wednesday morning as the market has no clear sight of where additional supply will come from to balance demand — maybe only a recession/depression is needed to crush consumer demand.

To sum up, Biden should’ve stayed home last weekend and enjoyed riding his bike and eating ice cream in Rehoboth Beach than trying to optically please Americans that he’s solving the energy crisis that appears to be a multi-year crisis. 

end

Tanker Companies Race To Ship Russian Oil Ahead Of New Sanctions

WEDNESDAY, JUL 20, 2022 – 01:25 PM

By Tsvetana Paraskova of OilPrice.com

Western sanctions have so far failed to crush Russia’s oil exports as Moscow is redirecting crude to its more than willing Asian buyers, China and India.  European vessel owners, especially private Greek operators, are moving a lot of the Russian oil in the months before the EU ban on seaborne Russian oil imports kicks in at the end of this year. Greek tanker owners have increased their exposure to Russian oil shipping in the past two months as they race to profit from the higher demand for heavily discounted Russian oil in China and India. 

Once EU sanctions on seaborne imports of Russian oil take effect this December, Greek tanker operators will have to stop shipping Russian oil. A much bigger blow to Russian oil exports that will have dramatic consequences on the global oil tanker market and oil prices comes from provision number two in the sixth sanctions package – EU operators will be prohibited from insuring and financing the marine transportation of Russian oil to third countries. 

Until the sanctions enter into force, European, especially Greek, tanker owners are moving a lot of Russian oil to Asia, making a lot of money in the process. Shippers from Greece, China, and Turkey are eagerly taking advantage of the situation, according to data compiled by Bloomberg. By shipping Russian ESPO crude from Kozmino to the Chinese coast, a ship owner can make $1.6 million—three times what they would have made before the war in Ukraine. 

Earlier this month, Ukraine called out Greece for shipping Russian oil. 

“We see Greek companies providing almost the largest tanker fleet for the transportation of Russian oil,” Ukrainian President Volodymyr Zelensky said in a speech to a conference in Athens via video link. 

“Once again: this is happening precisely when another Russian energy resource is being used as a weapon against Europe and against the family budget of every European. I am sure that this does not meet the interests of Europe, Greece, or Ukraine,” Zelensky added. 

Greek vessel owners made 151 port calls from Baltic and Black Sea Russian ports between May 1 and June 27, up by 41% compared to the same period last year, according to data compiled by Lloyd’s List using Lloyd’s List Intelligence. Almost half of all crude and refined products exported from key Baltic or Black Sea ports were shipped on vessels Greek tanker owners beneficially own, the data showed. TMS Tankers of billionaire George Economou is the biggest Greek player in the Russian market and second overall, second only to Russia-owned Sovcomflot, which is under Western sanctions, according to the data. 

Greek tankers are also participating in ship-to-ship (STS) transfers offshore Greece, Malta, and south of Gibraltar, Lloyd’s List data showed. 

It’s difficult to predict what will happen to the global tanker market when the EU sanctions enter into force, but demand for oil remains high, so tankers will be used on other routes, a CEO at a Greek shipping firm told The Wall Street Journal

“They will travel longer distances which means they will make more money,” the executive added. 

“Dark” STS transfers of Russian crude, alongside shutting off vessel transponders and attempts to disguise the origin of the oil, are set to only increase as the EU sanctions approach, analysts say. 

David Wech, Chief Economist at energy data provider Vortexa, wrote at the end of last month: 

“The need to export crude and products in growing volumes to long-haul destinations East of Suez, ideally disguising also the origins to attract potential buyers beyond China and India, may be growing well ahead of the sixth EU sanction package coming into force around the turn of the year.”    

8 EMERGING MARKET& AUSTRALIA ISSUES & OTHER EMERGING NATIONS

PANAMA

Your early  currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM

Euro/USA 1.0187 DOWN  0.0044 /EUROPE BOURSES //ALL RED 

USA/ YEN 138.14   DOWN 0.046 /NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.1971 DOWN   0.0031

 Last night Shanghai COMPOSITE CLOSED UP 25.29 POINTS UP  0.77%

 Hang Sang CLOSED UP 229.16 PTS OR 1.11% 

AUSTRALIA CLOSED UP 1.78%    // EUROPEAN BOURSES ALL RED 

Trading from Europe and ASIA

I) EUROPEAN BOURSES ALL  RED 

2/ CHINESE BOURSES / :Hang SANG CLOSED UP 229.16 PTS OR  1.11% 

/SHANGHAI CLOSED UP 25.29 PTS UP 0.77% 

Australia BOURSE CLOSED UP 1.78% 

(Nikkei (Japan) CLOSED UP 718.58 OR 2.67%

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1707.95

silver:$18.78

USA dollar index early WEDNESDAY morning: 106.85  UP 0.30  CENT(S) from TUESDAY’s close.

 WEDNESDAY  MORNING NUMBERS ENDS

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And now your closing WEDNESDAY NUMBERS 1: 00 PM

Portuguese 10 year bond yield: 2.38%  DOWN 1  in basis point(s) yield

JAPANESE BOND YIELD: +0.239% UP 0     AND 1/10   BASIS POINTS /JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 2.48%// UP 0   in basis points yield 

ITALIAN 10 YR BOND YIELD 3.48  UP 5   points in basis points yield ./

GERMAN 10 YR BOND YIELD: FALLS TO +1.246% 

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY  

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

Euro/USA 1.0199 DOWN 31    or 31 basis points

USA/Japan: 138.13 DOWN 0.054  OR YEN UP  5  basis points/

Great Britain/USA 1.19974  DOWN  0.0026 OR 26  BASIS POINTS

Canadian dollar DOWN .0008 OR 8 BASIS pts  to 1.2882

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The USA/Yuan,  CNY: closed    ON SHORE  (CLOSED ..DOWN 6.7668  

THE USA/YUAN OFFSHORE:    (YUAN CLOSED (DOWN)…. 6.7659

TURKISH LIRA:  17.59  EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.

the 10 yr Japanese bond yield  at +0.232

Your closing 10 yr US bond yield DOWN 1  IN basis points from TUESDAY at  3.017% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic

 USA 30 yr bond yield   3.168 DOWN 1 in basis points 

Your closing USA dollar index, 106.78 UP 23   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 WEDNESDAY: 12:00 PM

London: CLOSED DOWN 28.31 PTS OR  0.39%

German Dax :  CLOSED DOWN 26.41  POINTS OR 0.20%

Paris CAC CLOSED DOWN 17.80 PTS OR 0.29% 

Spain IBEX CLOSED DOWN 101.40 OR 1.25%

Italian MIB: CLOSED DOWN 377.71PTS OR  1.74%

WTI Oil price 103.31   12: EST

Brent Oil:  106.44  12:00 EST

USA /RUSSIAN ///   RUBLE FALLS TO:  54.99  UP 0 AND 45/100       RUBLES/DOLLAR

GERMAN 10 YR BOND YIELD; +1.246

CLOSING NUMBERS: 4 PM

Euro vs USA: 1.0179 DOWN .0051     OR  51 BASIS POINTS

British Pound: 1.1967 DOWN .0033  or  33 basis pts

USA dollar vs Japanese Yen: 138.26  UP 0.073//YEN DOWN 7 BASIS PTS

USA dollar vs Canadian dollar: 1.2876 UP 0.0003 (CDN dollar DOWN 3  basis pts)

West Texas intermediate oil: 102.61

Brent OIL:  106.81

USA 10 yr bond yield: 3.032 up 2 points

USA 30 yr bond yield: 3.171  DOWN 1  pts

USA DOLLAR VS TURKISH LIRA: 17.60

USA DOLLAR VS RUSSIA//// ROUBLE:  55.02   UP 0 & 43/100 ROUBLES 

DOW JONES INDUSTRIAL AVERAGE: UP 51.15 PTS OR 0.16 % 

NASDAQ 100 UP 190.26 PTS OR 1.55%

VOLATILITY INDEX: 23.80 DOWN 0.70 PTS (2.86)%

GLD: 158.03 DOWN 1.51 PTS OR 0.95%

SLV/ 17.19 DOWN 10 CENTS OR 0.58%

end)

USA trading day in Graph Form

Big-Tech & Bitcoin Jump, Bonds & Bullion Dump As Housing Market Slumps

WEDNESDAY, JUL 20, 2022 – 04:01 PM

Ugly housing data and clear signals of demand destruction in the energy complex were not enough to stop stocks soaring further as the short-squeeze continues…

From last Thursday’s lows, “Most Shorted” stocks are up a somewhat stunning 16%…

Source: Bloomberg

Once again the opening of the US Cash equity market was the most bullish thing in bull-land and panic-buyers piled in, sending Nasdaq up over 2% at its highs (but selling hit as Europe closed). That didn’t last long as the short-squeeze resumed for another big day for Small Caps and Big-Tech…

Cyclicals have been ripped higher at the cash open for 4 straight days now while Defensives are flat-ish…

Source: Bloomberg

Treasuries were mixed today with the belly weakest (5Y+3bps) and long-end outperforming (30Y -1bps) as yields dumped and pumped on the day…

Source: Bloomberg

Which inverted the yield curve (5s30s) once again…

Source: Bloomberg

Italian bonds started the day off with a bid but the reality of Draghi’s collapsing coalition ended up sending yields soaring to 3-week highs…

Source: Bloomberg

Bitcoin extended its recent breakout gains, topping $24k today

Source: Bloomberg

Ethereum topped $1600…

Source: Bloomberg

The dollar rebounded off last week’s lows after 3 straight down days…

Source: Bloomberg

Gold futures tumbled back below $1700, driven a big sell program as Europe closed…

WTI closed back below $100 after rallying hard despite notable signals of demand destruction from Gasoline inventories…

And finally, while US pump prices have tumbled now for 34 straight days, President Biden’s approval rating has just collapsed to a new record low…

Source: Bloomberg

Maybe it’s not just about the “Putin Price Hike” after all?

end

And now Newsquak with their wrap up

US outperforms as Italy’s crisis, NS1 angst, and Ukraine woes hit Europe – Newsquawk US Market Wrap

Newsquawk Logo

WEDNESDAY, JUL 20, 2022 – 04:31 PM

  • SNAPSHOT: Equities up, Treasuries flat, Crude down, Dollar up
  • REAR VIEW: Lavrov touts objectives beyond the Donbas; Gas flows through NS1 pipeline expected to resume Thursday; Italian PM Draghi to offer intention to resign; F intends to cut 8k workers; Keystone pipeline may resume next week; Strong US 20yr auction; GOOGL to pause hiring for two weeks; NFLX subscriber loss better than feared.
  • COMING UPData: Japanese Trade Balance, US IJC Events: ECB, BoJ, CBRT & SARB Policy Announcements Speakers: ECB’s Lagarde Supply: Spain, France & UK Earnings: AT&T, Phillip Morris; Roche, Nokia.

For the full report and more content like this check out Newsquawk.

Try a 14 day trial with Newsquawk and hear breaking trading news as it happens.

MARKET WRAP

Major US stock indices were firmer (SPX +0.6%) on Wednesday as they managed to shake off the pessimism in Europe (DAX -0.2%), exhibited in the Dollar strength. Although there was a brief spell of index weakness after The Information reported, citing an internal memo, that Google (GOOG) was pausing new hires for two weeks, similar to the weakness seen Monday on Apple’s (AAPL) hiring u-turn. European assets were hit (at pixel time EUR/USD -0.5%) after Russia’s Foreign Minister Lavrov confirmed suspicions that Moscow has its eyes beyond the Donbas region in Ukraine, while Russian President Putin also spoke, alluding to a scenario where the Nord Stream 1 pipeline is completely shut off. However, as things stand, it has been reported that flows are set to resume on Thursday from the NS1, albeit at a slower pace, but the situation remains fluid. There was also internal pressure in Europe with ANSA reporting Italian PM Draghi is set to announce his resignation on Thursday morning. All of which will occur the same day as the ECB. Meanwhile, oil prices were lower in the wake of the stronger Dollar, mixed EIA inventories, and the Keystone pipeline force majeure. Treasuries bear-flattened after earlier strength out of Europe amid the Russia/NS1 woes that unwound as US stocks posted another rally.

CENTRAL BANKS

BOJ PREVIEW: The Bank of Japan is expected keep rates at -0.10% and QQE with Yield Curve Control to flexibly target 10yr JGB yields at around 0%. The central bank will also release its latest Outlook Report containing board members’ median forecasts for Real GDP and Core CPI. To download the full Newsquawk preview, please click here.

ECB PREVIEW: After standing pat on rates in June, the ECB is finally set to pull the trigger and commence its rate-hiking cycle. Up until this week, analysts had been near unanimous in their view that the hike would be by 25bps given the explicit nature of the June statement. However, recent reporting has suggested that policymakers will now discuss the possibility of a 50bps move. Accordingly, markets now assign a 60% chance to such a move vs. around 33% at the start of the week. If policymakers opt for a 25bps move this time around, the statement will likely reaffirm the pledge to raise rates by a larger increment in September, depending on the medium-term inflation outlook. The July meeting will also likely see the Governing Council present details of its new anti-fragmentation tool – Transmission Protection Mechanism (TPM). It remains to be seen how much in the way of details the ECB will provide on its new tool as policymakers might prefer to use a “whatever it takes” approach rather than tempt bond-sellers with a specific number. Furthermore, the issue of conditionality will also be key when assessing the efficacy of such a tool, particularly in lieu of recent events in Italy whereby domestic politics has seen the IT/GE spread widen; something which Northern nations will likely impress is not as a result of ECB monetary policy. To download the full Newsquawk preview, please click here.

GLOBAL

NORD STREAM 1: As things stand, there are indications that Nord Steam 1 flows will resume at reduced capacity on Thursday. The German energy regulator said Gazprom has renominated gas flows, seen at 30% capacity, but caveated that further changes are possible to the gas flow nominations. There was some earlier concern after Russian President Putin said Russia is yet to see in which condition the turbine for Nord Stream 1 will return from maintenance, adding that there is a risk the equipment can be switched off and Nord Stream 1 stops after its return from Canada. Putin also suggested that gas flows via the pipeline could fall further, from around 60mcm a day to 30mcm a day if a turbine is not replaced quickly. But the current assumption is that while the turbine will likely not be in operation for Thursday, flows will still resume at the reduced 30% capacity mentioned above.

US EXISTING HOME SALES: US existing home sales fell 5.4% in June to 5.12mln, the slowest pace since June 2020, and well beneath the expected 5.38mln and the prior 5.41mln. Looking into the report, Pantheon Macroeconomics note, “sales continue to track the steep decline in mortgage applications since the turn of the year, falling at a 38% annualized rate in Q2, and the bottom likely is still some way off.” Moreover, the consultancy adds, “soaring rates have severely curtailed potential buyers’ spending power, and consumers’ confidence has been hammered by the surge in gas prices and the correction in the stock market.” As such, the diminishing demand is complemented with flying supply, due to would-be sellers beginning to worry they will be stranded as buyers fade away. Nonetheless, Pantheon adds, “we estimate that the number of single-family homes for sales jumped by 6% in June, making a cumulative 40% surge over the past four months. As a result, prices fell by 1.8% m/m, the second straight decline.” Lastly, due to this PM expects prices to continue declining for the rest of the year, at least, meaning falling home prices in time will feed into slower rent inflation, but likely not until next year.

FIXED INCOME

T-NOTE (U2) FUTURES SETTLED 6 TICKS LOWER AT 117-25

Treasuries bear-flattened after earlier strength in Europe amid Russia/NS1 woes unwound as US stocks posted another rally. 2s +2.1bps at 3.252%, 3s +2.3bps at 3.255%, 5s +3.1bps at 3.181%, 7s +2.5bps at 3.154%, 10s +1.9bps at 3.038%, 20s -0.4bps at 3.431%, 30s -0.6bps at 3.171%. Inflation breakevens: 5yr BEI -1bps at 2.722%, 10yr BEI -0.7bps at 2.347%, 30yr BEI -2bps at 2.22%.

THE DAY: T-Notes traded sideways in a very tight range into the APAC Wednesday session before rallying as the European session got going, taking their cues from the advances in UK Gilts and periphery debt, specifically Italian BTPs, ahead of the Draghi confidence vote. The dip in oil prices also helped the bond bid, as did concerns over the Nord Stream 1 pipeline. Their was another spurt higher at the NY handover after Russia’s Lavrov confirmed fears that Russia is now looking to go beyond the Donbas region in Ukraine. Some comments soon after from Putin, who alluded to the NS1 pipeline potentially being switched off, saw another spurt higher for govvies, taking T-Notes to session highs of 118-17+. The contracts then pared through the NY session as US stocks managed to look past the woes in Europe and set off on another rally, but also as the non-financial corporate debt pipeline picked up, including a USD 3.25bln IBM (IBM) deal, ahead of the 20yr auction.

20YR AUCTION: The 20yr auction was particularly solid. The 3.240% stop was richer than June’s 3.448%, but still managed a massive 2.7bps stop-through, larger than the six-auction avg. 1.2bps and the prior tail of 0.2bps. The 2.65x was a touch firmer than avg. and the prior. But it was the breakdown that impressed even more, with Dealers taking a record low 7.9% after Indirects stepped up to take 78% from last month’s 67.4%, and well above average 67.8%.

STIRS:

  • EDU2 -2bps at 96.51, Z2 -2bps at 96.065, H3 -3.5bps at 96.20, M3 -2.5bps at 96.355, U3 -0.5bps at 96.535, Z3 -0.5bps at 96.67, H4 -0.5bps at 96.79, M4 -1bps at 96.895, Z4 -2bps at 97.015, Z5 -4.5bps at 97.06.
  • NY Fed RRP op. demand rose to USD 2.240tln from 2.212tln.
  • US sold USD 30bln of 119-day CMBs at 2.720%, covered 3.87x.

CRUDE

WTI (U2) SETTLED USD 0.86 LOWER AT 99.88/BBL; BRENT (U2) SETTLED USD 0.43 LOWER AT 106.92/BBL

Oil prices were lower Wednesday in the wake of the stronger Dollar, mixed EIA inventories, and the Keystone pipeline force majeure. The ongoing Nord Stream 1 saga continued to whip around the nat gas contracts but did not see much follow-through for the oil benchmarks. The EIA data saw a surprise 0.4mln bbl draw in crude stocks after the private data indicated a 2mln bbl build, while gasoline stocks saw a hefty 3.5mln build, indicative of softening end-user demand; refinery utilisation declined and crude production fell to 11.9mln BPD from 12mln. Not long after the data, Canada’s TC Energy (TRP) announced its 590k BPD Keystone pipeline was running at reduced rates for a third day, giving no timeline for completion of repairs to a third-party power utility that was damaged on Sunday. The Keystone news did coincide with a lift off the lows for oil, but note the upside in stocks at the time was also playing a part.

SAUDI: Saudi Arabia is touted to be facing the upper limits of its production capacity, with the producer currently pumping 10.5mln BPD but WSJ sources noted it would struggle to produce 11mln BPD for more than a few months “at a stretch” and 12mln BPD, which The Kingdom has said is its capacity, for more than a few weeks. The WSJ sources added, “If there is a big gap in the markets, Saudi Arabia could tap into hundreds of millions of barrels of oil it has in strategic storage to compensate for unexpected outages in supply.”

LIBYA: Libya has resumed oil exports from Es Sider (250k BPD) oil port, according to an oil ministry statement, also stating that the Waha oil fields have resumed production at an initial rate of 15k BPD.

EQUITIES

CLOSES: SPX +0.58% at 3,959, NDX +1.55% at 12,439, DJIA +0.15% at 31,874, RUT +1.43 % at 1,824.

SECTORS: Consumer Discretionary +1.76%, Technology +1.56%, Energy +1.02%, Communication Services +1.01%, Industrials +0.74%, Financials +0.32%, Materials +0.11%, Real Estate -0.53%, Consumer Staples -0.73%, Health -1.06%, Utilities -1.36%.

EUROPEAN CLOSES: Euro Stoxx 50 -0.06% at 3,585; FTSE 100 -0.44% at 7,264; DAX -0.20% at 13,281; CAC 40 -0.27% at 6,184; IBEX 35 -1.18% at 8,028; FTSE MIB -1.60% at 21,348; SMI -0.56% at 11,059.

EARNINGSNetflix (NFLX) saw gains post-earnings, where it lost 970k subscribers in the Q, but that was less than the expected 2mln decline so was framed as better-than-feared. Moreover, NFLX beat on EPS but missed on revenue. Looking ahead, guidance was light as it expects Q3 subscribers of +1mln, short of the expected +1.8mln, whilst EPS and revenue guidance was also short. Desks warn of a potential rocky road for the Co. until it gets its ad-supported tier operating. Biogen (BIIB) was lower, despite a strong report, highlighted by beating on EPS and revenue alongside raising FY22 outlook. Baker Hughes (BKR) was lower after it missed on EPS and revenue citing various challenges including component shortages and supply chain inflation. Moreover, BKR noted the demand outlook for the next 12-18 months is deteriorating. Omnicom (OMC) firmed after it surpassed Wall St. consensus on EPS and revenue. CEO noted it is in a strong financial position heading into the second half of the year. ASML (ASML) current Q was strong, highlighted by topping on profit and revenue, but looking ahead ASML cut revenue outlook for both FY and Q3. Co. added its customers are turning somewhat cautious in anticipation of slowing chip demand. Abbott (ABT) beat on EPS and revenue, alongside raising FY EPS view. Elevance Health (ELV) posted a strong report, as it beat on EPS and revenue as well as raising its FY22 EPS view.

STOCK SPECIFICSFord (F) planning to cut up to 8k salaried workers related to gas-powered vehicles in the coming weeks amid its push into EVs, according to Bloomberg. Google (GOOGL) stated, as previously alluded to, will pause hiring for two weeks, according to an internal email cited by The Information. Merck (MRK) was softer after it announced its Keytruda cancer drug failed to meet its goal in a late-stage study focused on head and neck cancer patients. Bath & Body Works (BBWI) cut guidance noting it is navigating a challenging environment. Highlighting this, BBWI sees Q2 sales down 6-7% Y/Y (prev. up low single digit) and FY22 Revenue growth seen down mid- to high-digit (prev. up low-single digit). Lowers EPS view to USD 0.40-0.42/shr (prev. 0.60-0.65, exp. 0.62). Casino names, such as LVS, MGM, WYNN, MLCO, saw upside after Macau announced plans to reopen casinos on July 23rd. EU antitrust regulators likely to reinforce Apple (AAPL) investigation with new evidence and no new changes, according to Reuters sources. Goldman Sachs (GS) CEO said tightening economic conditions will affect the consumer and slow growth, via CNBC. Boeing (BA) is preparing to increase production of its 787 Dreamliner soon after US air-safety regulators allow the aircraft to resume deliveries, according to WSJ sources; BA expects deliveries to restart as soon as this summer. New Relic (NEWR) to explore a sale amid private equity interest, according to Reuters sources.

FX WRAP

The dollar was firmer Wednesday, reaching a high of 107.250, with the Buck seeing pronounced upside in the European morning after Russian Foreign Minister Lavrov diminished the risk appetite. On this, he said the objective of the “special operation” in Ukraine has changed from just Donetsk and Luhansk to a number of other territories. Further adding to the punchy rhetoric, Lavrov said if the West delivers long-range weapons to Ukraine, then geographical goals in Ukraine will be advanced even further. Moreover, Lavrov noted that it makes no sense in the current situation when commenting on the prospect of peace talks with Ukraine. Elsewhere, US existing home sales disappointed, falling to the slowest pace since June 2020. Looking ahead, after-hours Wednesday is Tesla (TSLA) earnings, before Phillip Morris (PM) and AT&T (T) Thursday, as well as the key risk event of the ECB rate decision.

Activity currencies were more-or-less flat, with AUD and GBP seeing very mild losses against the Buck, whilst NZD and CAD were flat. Cable saw a high of 1.2037, but for the third consecutive session was unable to hold gains above the key level. Regarding the day, Cable saw a slight boost in the European morning after blowout inflation metrics, but this faded through the session amid heightened recession fears. The Aussie saw very mild losses, akin to the Pound, and traded within tight ranges as AUD/USD pivoted 0.6900, with a range of 0.6930-0.6874. For the Aussie, RBA Governor Lowe said they are going to have to increase rates with inflation going to 6% or 7%, adding that steady rate increases are now needed to restrain inflation expectations. The Loonie was in a tight 1.2906-1.2855 range, and as previously mentioned, any early momentum was quickly lost following Lavrov’s remarks. Elsewhere, Canadian CPI was a welcome report and was not as hot as expected, on both the core and headline metrics; USD/CAD rallied to its peak in wake of the report. Kiwi was the outperformer throughout Wednesday’s session, with help from a marked turnaround in the AUD/NZD cross that faded ahead of 1.1100 and tested lows below 1.1050 not far from 50 and 21 DMAs (1.1034 and 1.1030 respectively). NZD/USD held ‘comfortably’ above 0.6200, albeit waning from a 0.6272 peak awaiting NZ trade data for further direction.

EUR was the G10 underperformer on a few negative headlines. Firstly, as previously mentioned, in the European morning the single-currency saw weakness after punchy rhetoric from Lavrov, which was only accentuated after Russian President Putin stated we are yet to see in which condition equipment for Nord Stream 1 will return from maintenance, and there is a risk that equipment can be switched off and Nord Stream 1 stops after its return from Canada. Additionally, Euro continued to see weakness into the close, and printed a low of 1.0156, after reports the Italian Government is on the cusp of collapse as parties refuse to back PM Draghi. Moreover, according to ANSA, Draghi is to announce Thursday at 08:00BST/03:00EDT at the Chamber of Deputies his intention to resign. Market participants await the key ECB meeting on Thursday (preview here), where the debate resides over a 25 or 50bps rate hike alongside any anti-fragmentation plan.

Safe havens, CHF and JPY, were mixed with the Swissy lower but the Yen flat. The former traded in very narrow ranges, highlighted by a roughly 50 pip range for the day as market participants await the key BoJ meeting. On this, the BoJ is expected to keep rates at -0.10% and QQE with Yield Curve Control to flexibly target 10yr JGB yields at around 0%. The central bank will also release its latest Outlook Report containing board members’ median forecasts for Real GDP and Core CPI (preview here). Swissy handed back gains to the Buck and recoiled back above the key level of 0.9700 to highs of 0.9736.

EMFX was predominantly lower against the Buck. RUB was the outperformer and firmed, but ZAR, BRL, MXN, TRY, CNH/CNY all saw losses. USD/CNH rally stalled, with gains in equities limiting the upside, but signs suggest higher levels due with analysts noting if risk-off takes hold the USD/CNH rally should resume, with 6.8000 targeted. Lastly, EUR/CZK rallied after CNB vice-governor Mora noted it is desirable to continue restrictive monetary policy and he does not support FX interventions. Mora added inflation will not go down without decisive central bank action.

I) / EARLY MORNING TRADING//

end

ii) USA DATA//

US Existing Home Sales Plunge In June As Affordability Collapses

WEDNESDAY, JUL 20, 2022 – 10:08 AM

On the heels of ugly homebuilder sentiment and tumbling single-family home starts and permits, analysts expected existing home sales to extend their recent decline with a 1.1% MoM drop in June. They were right in direction but severely wrong in magnitude as existing home sales slumped 5.4% MoM in June…

Source: Bloomberg

That is the 5th straight month of existing home sales declines, and home sales are down a stunning 14.2% YoY.

“Falling housing affordability continues to take a toll on potential home buyers,” said NAR Chief Economist Lawrence Yun.

“Both mortgage rates and home prices have risen too sharply in a short span of time.”

The SAAR is below the full year pace for 2019…

Source: Bloomberg

Interestingly, properties typically remained on the market for 14 days in June, down from 16 days in May and 17 days in June 2021. The 14 days on market are the fewest since NAR began tracking it in May 2011.

Finally, there is some good news – The number of homes for sale rose for the first time in three years on an annual basis to 1.26 million, the highest since September. At the current sales pace it would take three months to sell all the homes on the market, marking the fifth straight rise in months’ supply.

“Finally, there are more homes on the market,” Yun added.

“Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

Despite hopes that prices would start to roll over – helping with affordability – the median selling price rose 13.4% from a year earlier to a fresh record of $416,000. First-time buyers accounted for 30% of US sales last month, up from 27% in May.

END

Mortgage application activity just hit a fresh 22-year low

July 20, 2022 at 7:16 a.m. ET

MarketWatch

Purchases and refinances are down due to recession fears, higher rates and inflation, the Mortgage Bankers Association said.

The numbers: Weakness in refinances and purchases

pushed the Market Composite Index, a measure of mortgage loan application volume, down to the lowest level since 2000, the Mortgage Bankers Association (MBA) said on Wednesday.

The market index fell by 6.3% to 281.1 for the week ending July 15. This is the third week the index fell, due to rising rates and recession fears. Last week the index fell by 1.7% to 300. One year ago, the index stood at 698.3.

Key details: The Refinance Index dropped by 4% to a 22- year low and was down 80% compared to a year ago. The Purchase Index — which measures mortgage applications for the purchase of a home — fell by 7% from the previous week.

The big picture: The Federal Reserve’s rate hike has cooled demand for homes considerably, with mortgage rates much higher than they were a year ago.

“Mortgage applications declined for the third week in a row, reaching the lowest level since 2000,” Joel Kan, associate vice president of economic and industry forecasting at MBA, said in a statement.

With rates higher than they were a year ago, “demand for refinances continues to plummet, with MBA’s refinance index also falling to a 22-year low,” Kan added.

Fears of a recession, high inflation and high rates are putting off would-be homebuyers. Builders are responding to lower demand by cutting prices. Construction of single- family homes has also slowed in June.

The contract rate for the 30-year fixed-rate mortgage averaged 5.82% for the week ending July 14, the MBA said. The MBA also noted a drop in the 15-year fixed-rate mortgage to 4.88%, and a drop in adjustable rate mortgages.

-END-

IIB) USA COVID/VACCINE MANDATES

end

iii)a.  USA economic stories

For your interest…

‘Water Cops’ Patrol Drought-Stricken Los Angeles, Searching For Violators

WEDNESDAY, JUL 20, 2022 – 06:55 AM

Water police comb through Southern California neighborhoods, searching for illegal lawn irrigation or residents washing their vehicles. Those disobeying the new water restrictions will be issued a warning, and repeat offenders will be slapped with hundreds of dollars in fines. 

Los Angeles Department of Water and Power (LADWP) has a team of water conservationist police patrolling city streets and sidewalks for water wasters. The ‘water cops’ also investigate hundreds of complaints by neighbors (or so-called ‘Karens’) who report one another about water wasting. 

AFP spoke with one water specialist, Damon Ayala, who rides around Los Angeles, writing down addresses of homes where he finds evidence of infringement of the strictest ever conservation rules that went into effect early last month.

Effective June 1, outdoor watering is restricted to two days per week, down from three. Households are prohibited from watering lawns between 0900 and 1600 local time. LADWP has asked residents not to clean sidewalks, walkways, driveways, or parking areas with water.  

Those violating the ordinance will be warned the first time but will escalate with fines for repeat offenders. LADWP can restrict water flow to household supply on the fifth offense. 

Ayala’s hunt for water wasters comes as the western half of the US is facing one of the worst droughts in years

The big issue is reservoirs in the state, feeding metro areas, are dangerously low. 

Ayala said many households are unaware of the new ordinance, and the first infraction is an education lesson not to waste water. 

“We’re not looking really for their money – that doesn’t get us more water. We’re trying to get behavioral change,” he said.

“So that way, we can capture the water savings from making those changes.”

We noted in May it was only a matter of time before water cops hit the streets of California. 

end

The Fed will probably pivot a lot sooner than most think

(Cignarella/Bloomberg)

“If The Fed Pivots Sooner Than Most Think, The Second Half Of 2022 Risk Rally Will Be Enormous”

WEDNESDAY, JUL 20, 2022 – 07:20 AM

By Vincent Cignarella, Bloomberg Markets Live reporter and analyst

The Fed is hiking blindly into an economic downturn, putting pressure on risk assets unnecessarily.

The good news, with cash levels at the highest since 9/11 and equity allocation the lowest since the Lehman collapse, if the Fed stops sooner than many think, the second half of 2022 risk rally will be enormous (ZH: and they will: according to Michael Hartnett, the Fed will pivot in November, while Marc Cabana says QT will end well ahead of schedule).

Housing and retail began to turn lower in October of 2021, retail likely as wages failed to keep up with inflation and housing due to higher prices and less inventory. That trend continues into this year, possibly leveling off in June before likely resuming a turn lower.
The rate hikes which began in March of 2022 came some 22 months after the economy began to recover and now are coming at a time when the economy is slowing down, which will likely cause even slower growth.

The Federal Reserve Bank of Atlanta’s GDPNow index suggests U.S. gross domestic product will retract -1.59% in the second quarter. That is two consecutive negative quarters of growth; the Fed is hiking into a recession.

As growth slows, there is a high degree of probability that inflation will peak and begin coming down to the Fed’s target. There is no real reason to aggressively tighten rates.

The Fed will see this as the data shows slowing growth and at least temporarily halt the rate hike cycle, igniting a surge in risk into 2023.

END

Cannot recruit and many sleft because they were unvaccinated

(Ly/EpochTimes)

Army Set To Cut Force-Size By 20,000 Amid “Unprecedented Challenges” In Recruitment

BY TYLER DURDEN

WEDNESDAY, JUL 20, 2022 – 04:20 PM

Authored by Mimi Nguyen Ly via The Epoch Times,

The U.S. Army has indicated it is likely to significantly fall short of its target number of troops over the next two years amid what a top general said were “unprecedented challenges” in attracting, training, and retaining soldiers.

Army Gen. Joseph Martin, vice chief of staff for the Army, told a House military personnel panel on Tuesday that the projection for the estimated total number of troops in the force by the end of the 2022 fiscal year, Sept. 30, is 466,400.

The original target end strength for the 2022 fiscal year is 473,000, reported the Army Times. Martin’s estimate would mark a drop of 6,600 from the original target.

Meanwhile, for the end of fiscal year 2023, the Army is projecting a troop size of between 445,000 and 452,000, Martin told lawmakers.

It originally had a target for fiscal year 2023 of 476,000 troops, the Army Times reported. Martin’s Tuesday estimate would mark a drop of 24,000 to 31,000 from the original target.

‘Unprecedented Challenges’

The Army’s number two officer told lawmakers it is striving to reach a troop size of 455,000 for the end of fiscal year 2023, but “the question is whether we can achieve it.”

“Right now what we’re experiencing—the “why” of what we think is going on right now—is we’ve got unprecedented challenges with both a post-COVID-19 environment and labor market, but also private competition with private companies that have changed their incentives over time,” he told the House Armed Services subcommittee.

He also noted that only about 23 percent of the population are physically, mentally, and morally qualified to serve, and within that figure, a smaller number want to serve.

[ZH: Jesse Kelly had some thoughts…]

https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=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&frame=false&hideCard=false&hideThread=false&id=1549542044007530497&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fmilitary%2Farmy-set-cut-force-size-20000-amid-unprecedented-challenges-recruitment&sessionId=f853b253ed7eb096b194dc7636a6a0edef185a1c&siteScreenName=zerohedge&theme=light&widgetsVersion=6da0b7085cc99%3A1658260301864&width=550px

When asked about what the Army would need to do if it fell short of its goals in recruiting or retention, such as whether it would need to make cuts to its force structure, Martin said: “We don’t need to do that immediately.”

“But if we don’t arrest the decline that we’re seeing right now in end strength, that could be a possibility in the future, but we don’t see the need in the near term,” he added.

“In the near term, the way we’re going to manage any shortfalls is ways we’ve done it in the past, where we prioritize formations that have missions or preparation for missions and those missions will be prioritized to be manned.”

If the shortfall in Army troop size persists, however, it could have an impact on readiness, Martin said.

Vaccine Mandates Questioned

When asked about the vaccine mandates, Martin disputed that some 75,000 people were facing discharge for refusing to take the COVID-19 vaccine. He said the figure is “less than 20,000,” but noted: “it’s still a significant number and that’s why I’m looking forward to improvements.”

Rep. Mike Johnson (R-La.), a member of the House Judiciary and Armed Services Committees, took to Twitter to advocate for the end of the COVID-19 vaccine mandate in the military, noting the drastic projected reductions in strength in the Army.

“Army Reserve and Army National Guard reductions will be even worse. We must depoliticize the military and end the vaccine mandate,” he said on Twitter.

Johnson in late June accused the Biden administration of having destroyed the Army’s readiness “by creating an unnecessary recruiting and retention shortfall, and trying to make up the difference by lowering other crucial education and fitness standards.”

Recruiting Goal Not Met Despite Incentives

With just two and a half months to go in the 2022 fiscal year, the Army has achieved just 50 percent of its recruiting goal of 60,000 soldiers, according to a spokeswoman for Army Secretary Christine Wormuth, Lt. Col. Randee Farrell, per The Associated Press.

“The Army is facing our most challenging recruiting environment since the inception of the all-volunteer force. This is not a one-year challenge. We will not solve this overnight,” Wormuth said, reported the news agency.

She added that the service is looking at a wide range of steps to recruit more soldiers without lowering standards or sacrificing quality.

“We are facing a very fundamental question,” she added.

“Do we lower standards to meet end strength, or do we lower end strength to maintain a quality, professional force? We believe the answer is obvious—quality is more important than quantity.”

Military leaders have been spending tens of thousands of dollars in increased bonuses as incentives for recruits, hoping to compete with other employers around the country. The unemployment rate is about 3.6 percent.

In January, the Army, for the first time, began offering a maximum enlistment bonus of $50,000 to highly skilled recruits who join for six years.

“The recruiting crisis is only accelerating,” Johnson said in a release on June 29, citing increasing monetary incentives.

“In April, the Army offered $10K for potential recruits to go to basic training within 30 days. In June, the Army offered $25K, and last week, the Army began offering recruits in any career field $35K to ship to training.”

END

3b/INFLATION COMMENTARIES/LOG JAMS ETC

SWAMP STORIES

END

King report

The King Report July 20, 2022 Issue 6804Independent View of the News
 ECB weighs bigger rate hike with safety net for indebted countries
European Central Bank policymakers are considering raising interest rates by a bigger-than-expected 50 basis points at their meeting on Thursday to tame record-high inflation, two sources with direct knowledge of the discussion told Reuters…
https://www.reuters.com/markets/europe/ecb-policymakers-discuss-50-bps-rate-hike-this-week-sources-say-2022-07-19/
 
June Housing Starts 1.559m, 1.58m expected, May 1.591m; Permits 1.685m, 1.65m exp, May 1.695m
 
The Atlanta Fed Q2 GDPNow tracker is -1.6%, down from -1.5% last week.  “After this morning’s housing starts report from the US Census Bureau, the nowcast of second-quarter real residential investment growth decreased from -8.8 percent to -10.1 percent.
https://www.atlantafed.org/cqer/research/gdpnow.aspx
 
Stocks soared on Tuesday on pattern buying for Q2 results and because a few trading entities gamed the VIX July expiration.  The thin summer market makes it easier to push stocks and ESUs higher.
 
Long-time readers might recall that we regularly warn that summer rallies after ugly spring declines tend to produce even uglier autumn declines.  AND if the summer rally is supported by the notion the Fed will ease or halt a tightening cycle because the economy is ebbing, stocks can have a Fall Classic (plunge).
 
ESUs traded modestly higher when Asian opened on Tuesday.  ESUs and stocks traded sideways in listless action until ESUs jumped 14 handles for the European open.  By 3:44 ET, ESUs and stocks had rescinded their daily gains.  However, ESUs then rallied persistently until 6:36 ET.  The buying was steady and determined.  ESUs and stocks then retreated until another rally commenced at 8:38 ET.
 
The rally for the NYSE open produced a 22-handle ESU jump.  After trading sideways until 9:52 ET, someone aggressively forced ESUs to 3914.00 at the European close.  The rally plodded higher, with ESUs hitting 3938.75 at 14:09 ET.  The Russell 2000 hit a 5-week high!
 
Yesterday was the last trading day for VIX July options.  Today is VIX July futures expiry, which had an open interest of 36,414 before trading yesterday, and settlement for July options.
 
ESUs and stocks retreated after the manipulation for the VIX Fix.  At 14:48 ET, the rally for the expected late manipulation began. The rally quickly aborted, ESUs went inert until a late upward manipulation appeared at 15:40 ET.  ESUs hit the daily high of 3943.25 at 15:48 ET and then fell 5.00 into the close.
 
Biden to sign order vs. countries that detain Americans — but Saudis get pass https://trib.al/xW7nuof
 
@RNCResearch: For the third day in a row, Joe Biden has NO PUBLIC EVENTS on his schedule.
https://twitter.com/RNCResearch/status/1549414807941545985
 
Positive aspects of previous session
Stocks soared for earnings season and on a blatant manipulation for the VIX July expiration
Fangs led the rally, which is routine for earnings season buying and manipulations
 
Negative aspects of previous session
Bonds declined 22/32
Energy commodities rallied sharply
 
Ambiguous aspects of previous session
How many more companies will prepare for recession?
The dollar declined sharply on an expected 50bp ECB rate hike on Thursday
 
First Hour/Last Hour Action [S&P 500 Index]: 1st Hour from NYSE open: Up; Last Hour: Up
 
Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 3912.38
Previous session High/Low3939.81; 3860.73
 
CNN, MSNBC, ABC, CBS, NBC ignore Pelosi’s husband buying $1m of computer chip stock ahead of vote https://www.foxnews.com/media/cnn-msnbc-abc-cbs-nbc-ignore-pelosis-husband-buying-over-1-million-computer-chip-stock-ahead-vote
 
Biden to issue climate executive orders Wednesday – aimed at addressing the climate crisis
https://www.reuters.com/world/us/exclusive-biden-issue-climate-executive-orders-wednesday-sources-2022-07-19/
 
White House says it won’t declare climate emergency this week https://trib.al/HyOj0Hu
“Everything’s on the table. It’s just not going to be this week on that decision,” she added…
 
Biden approval rating falls to 36%, matching record low: Reuters/Ipsos poll (These guys tend to greatly overstated Biden/Dem strength.  They had Biden by 10 over DJT on Oct. 28, 2020)
https://www.reuters.com/world/us/biden-approval-rating-falls-36-matching-record-low-reutersipsos-2022-07-19/
https://www.ipsos.com/en-us/reutersipsos-core-political-survey-general-election-tracker-10282020
 
Meet the Ex-CIA Agents Deciding Facebook’s Content Policy
https://scheerpost.com/2022/07/18/meet-the-ex-cia-agents-deciding-facebooks-content-policy/
 
After the close, NFLX reported EPS of $3.20 vs $2.94 exp.  It soared as much as 11.6% because global paid net subscribers were -970,000 vs. expectations of -2 million.  NFLX rallied 5.61%, the best performing FANG for the NYSE session, before it released earnings.  Who knew the results early?
 
WSJ’s @NickTimiraos: BofA’s Ethan Harris observes that investors *really* expect inflation to drop over the next 12 to 24 months, but that isn’t how inflation (which is inertial) has historically behaved.
He offers 5 explanations for the disconnect: https://twitter.com/NickTimiraos/status/1549529524353654785/photo/1
 
Today – The blatant and determined manipulation to game the VIX July options expiry was wildly successful.  Will schemers again try to manipulate ESUs higher for the VIX July options and futures’ settlement at 14:15 ET?  Will the manipulation foment momentum buying and short covering?
 
Expected earnings: BIIB 4.15, BKR .22, ABT 1.13, CSX .47, DFS .380, UAL 1.87, TSLA 1.83
Expected economic data: June Existing Home Sales 5.36m
 
ESUs are +15.00; and USUs are -7/32 at 20:35 ET.  It looks like another VIX gambit is operative!
 
S&P 500 Index 50-day MA: 3923; 100-day MA: 4148; 150-day MA: 4289; 200-day MA: 4360
DJIA 50-day MA: 31,613; 100-day MA: 32,841; 150-day MA: 33,685; 200-day MA: 34,117
 
S&P 500 Index – Trender trading model and MACD for key time frames
MonthlyTrender and MACD are negative – a close above 4803.89 triggers a buy signal
WeeklyTrender and MACD are negative – a close above 4113.15 triggers a buy signal
DailyTrender and MACD are positive – a close below 3756.31 triggers a sell signal
Hourly: Trender and MACD are positive – a close below 3871.46 triggers a sell signal
 
Joe Rogan claims Trump was on ADDERALL during his presidency and slams him as a ‘man baby’: Podcast guest Tom Segura claims ex-president ‘struggled to read’ without the ADHD drug – he’d heard from former staffers on ‘The Apprentice’ that Trump need the drug Adderall to stay focused…
https://www.dailymail.co.uk/news/article-11025981/Joe-Rogan-calls-Donald-Trump-man-baby-claims-ADDERALL.html
 
Dr. Oz Says ‘MAGA Movement Is Dying’ While His Campaign Trails Democrat in Fundraising for Pa. Senate Race (Why did Trump endorse this chameleon?  DJT is a celeb doter.)
    Beachgoers in New Jersey — where Oz had been a longtime resident before moving into a Pennsylvania home owned by his in-laws ahead of the Senate race — recently saw a cheeky message from Fetterman about his opponent.  “HEY DR. OZ, WELCOME HOME TO NJ! ️ JOHN,” read a banner, pulled by a plane, as it flew over the Jersey Shore earlier this month…
https://people.com/politics/dr-oz-says-maga-movement-dying-while-campaign-trails-democrat-fundraising-senate-race/
 
Rand Paul slams Mitch McConnell for ‘secret deal’ with Biden to secure judicial nominee
The nomination came as part of a reported deal in exchange for McConnell not stopping future Biden judicial nominations… Paul disputed the accusation and roasted McConnell on Tuesday in a tweet. “I support Chad Meredith and supported him when he was considered for a different position. I think he would make a good judge. Unfortunately, instead of communicating and lining up support for him, Senator McConnell chose to cut a secret deal with the White House that fell apart,” he wrote…
https://justthenews.com/government/congress/rand-paul-slams-mitch-mcconnell-secret-deal-biden-secure-judicial-nominee
 
@FreeBeacon: AOC pretended to be in handcuffs when she was escorted away from the Supreme Court
https://twitter.com/FreeBeacon/status/1549448414072643585
 
@NBCNews: Texas blogger paid by Democratic Rep. Gonzalez’s campaign is attacking Republican opponent Rep. Flores as “Miss Frijole,” prompting a wave of denunciations by fellow Democrats.
 
Crew member shot dead on ‘Law & Order’ set in NYC: cops  https://t.co/LVINVtLwg6
 
Arrests in Chicago plummet to historic lows as crime rises and police admittedly pull back: ‘No way’ – The number of traffic stops and tickets have also dropped, and the number of investigative stops fell by more than 50% between 2019 and 2021… (The implications are grim, Fall of Rome stuff!)
https://www.msn.com/en-us/news/crime/arrests-in-chicago-plummet-to-historic-lows-as-crime-rises-and-police-admittedly-pull-back-no-way/ar-AAZJTec
 
Why Incarceration Matters – A Federal Sentencing Commission study rebuts progressive doctrine, showing a strong connection between lengthy sentences and lower recidivism rates.
https://www.city-journal.org/why-incarceration-matters?wallit_nosession=1#.YtW-GGIr2bc.twitter
 
We Have a Bifurcated Legal System Based on Your Politics.
“It’s unbelievable hypocrisy by Graves. He is prosecuting the January 6th protesters and to highlight the hypocrisy, more than 200 people have been charged, have pled guilty to parading on January 6th. Which is a petty offense class B misdemeanor. Even though they walked through open doors, in front of police, were not asked to leave, yet Graves has actually recommended charges and sentencing of 60 to 90 days in jail. But not of Colbert. It was unlawful entry misdemeanor, it’s all been dropped, it could have been up to 180 days in jail…   https://t.co/tpT2zLVaAg
 
John Kerry’s family private jet emitted over 300 metric tons of carbon since Biden took office
Special presidential envoy for climate Kerry arrived in Berlin, Germany on Tuesday for the Petersburg Climate Dialogue  https://www.foxnews.com/politics/john-kerrys-family-private-jet-emitted-300-metric-tons-carbon-biden-took-office
 
The Navy might be required to serve vegan meat on some bases
The amendment was introduced by Rep. Elissa Slotkin, a Michigan Democrat who worked at the State Department, Central Intelligence Agency and Department of Defense before her election to Congress in 2019…some house Republicans are decrying the proposal as an example of the liberal agenda infiltrating military matters…  https://nypost.com/2022/07/19/the-navy-might-be-required-to-serve-vegan-meat-on-some-bases/

 

Greg Hunter:interviewing Martin Armstrong

2023 Will Be Year from Hell – Martin Armstrong

By Greg Hunter On July 19, 2022 In Market Analysis1 Comment

By Greg Hunter’s USAWatchdog.com 

Legendary financial and geopolitical cycle analyst Martin Armstrong says the time to prepare is now for what is coming in 2023.  Armstrong’s Socrates computer program is predicting “2023 will be the year from Hell.”  Armstrong explains, “Our computer is predicting a ‘war cycle’ that hits in 2023, but that is also civil unrest.  So, you are looking at revolutions and etc. because of inflation.  Our projection on oil is that it is going to go up dramatically into 2023.  It’s going to be the same thing, I think, for gasoline prices.  This is just not over yet.  The euro looks like death warmed over. . . . Our computer is projecting the continued decline of the euro and rising commodity prices.  With these sanctions on Russia, you just had the leader of Hungary say Europe is committing suicide.  The sanctions are hurting Europe more than they are hurting Russia.  This is like a shot to the lung.  They can’t even breath at this stage.”

Armstrong says you are not going to have to wait until next year to see extreme stress in the financial system.  Armstrong is seeing financial upheavals coming in the August and September time frame.  So, the economic pain is already here and getting worse, especially in Europe.  Armstrong says, “I think you are going to see this come to a head. . . . It’s definitely tanking more anyway. . . . What makes things even worse for the world is the dollar going up and not down.  This is because you had all these emerging markets issue debt in dollars. . . . They were borrowing in dollars because it was a cheaper interest rate, and they had no concept of the foreign exchange risk. . . . This happened in Australia.  The currency swings, and, now, suddenly you owe 20% more. . . . You had the same thing with all these emerging markets. . . . Now, the dollar is going up and you are seeing bank runs.”

Armstrong says not only is the euro dramatically declining, but the euro bonds are being shunned by U.S. banks.  This is another bad financial sign for the EU.  Armstrong says, “All these things are a real crisis.  I can tell you that speaking to the top three banks in New York City, they refuse to accept any European sovereign debt as collateral—period.  That is what started the whole repo crisis in 2019.”

So, we are entering into a debt crisis with the EU financial system in the crosshairs.  Armstrong says, “This is why they are pushing for war. . . . They think they can create a new monetary system, and to do so, they need war.  They think they can keep it just conventional.  Then the United Nations can emerge as the white knight and the peacemaker.  Therefore, we get another Bretton Woods.  You can redesign all the currencies, and when you do that, you wipe out all the debt.  That is what is on the agenda. . . . There is no way they can get out of this other than default.  If they default, they are worried about millions of people storming the parliaments of Europe. . . .This is really a tremendous financial crisis that we are facing.  They have been borrowing year after year since WWII with zero intention of paying anything back.”

There is much more in the nearly 40-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Martin Armstrong, cycle expert and author of the upcoming new book “Manufacturing World III,” for 7.19.22.

(https://usawatchdog.com/2023-will-be-year-from-hell-martin-armstrong/)

After the Interview:

There is some free information, analysis and articles on ArmstrongEconomics.com.

To get a copy of Armstrong’s 5th edition of “Manipulating the World Economy,” click here.

To get a copy of “The Cycle of War and the Coronavirus: The New Threat to World Peace & Battle of the Billionaires,” click here.

After the Interview:

See you TOMORROW

One comment

  1. […] by Harvey Organ, Harvey Organ Blog: […]

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