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Updated: 9 hours 11 min ago

jUNE 27/Comex gold open interest rises by a huge 10% up to 619,597 contracts/Gold OI for june rises by another 129 contracts/ A huge 5384 contracts still standing for July or 16.5 tonnes of gold/Huge devaluation in the yuan adds to the turmoil in...

Mon, 06/27/2016 - 18:56

Good evening Ladies and Gentlemen:

Today’s quote from Martin Schulz, President of the European Parliament…

Schulz: The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate“.

Gold:  $1,322.50 UP $2.30    (comex closing time)

Silver 17.74  down 5 cents

In the access market 5:15 pm

Gold: 1325.00

Silver: 17.76

.

The June gold contract is an active contract. Last  night we had a fair sized 41 notices filed last night, for 4100 oz to be served upon today.  The total number of notices filed in the first 17 days is enormous at 15,481 for 1,548,100 oz.  (48.15 tonnes)

ii) in silver we had 31 notices filed for 155,000 oz..  Total number of notices served  in the 17 days: 615 for 3,075,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 278.966 tonnes for a loss of 24 tonnes over that period

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In silver, the total open interest fell by a considerable 1,533 contracts down to 217466, AND NOW CLOSE TO A  ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS UP 44 CENTS with respect to FRIDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.087 BILLION TO BE EXACT or 155% of annual global silver production (ex Russia &ex China)

In silver we had 31 notices served upon for 155,000 oz.

In gold, the total comex gold OI ROSE by a HUGE 50,091 contracts UP to 619,597 as the price of gold was UP $58.80 with FRIDAY’S trading (at comex closing). 

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

 

GLD

A huge changes in gold inventory. a massive deposit of 18.415 tonnes into the gold inventory/

Total gold inventory: 934.313 tonnes

SLV

A tiny 570,000 oz enters the SLV inventory

Inventory rests at 332.784 million oz.

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

 

1. Today, we had the open interest in silver fell by 1533 contracts down to 217,446  DESPITE THE FACT THAT THE price of silver was UP 44 CENTS with FRIDAY’S trading. The gold open interest ROSE by a CONSIDERABLE 50,091  contracts UP to 619,597 as the price of gold was SKYROCKETED NORTHBOUND BY $58.80  ON FRIDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

2c) FRBNY gold inventory movement report:

(Harvey)

3. ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 41.42 POINTS OR 1.45% / /Hang Sang closed DOWN 31.30 OR 0.16%. The Nikkei closed UP 357.19 POINTS OR 2.39% Australia’s all ordinaires  CLOSED UP 0.458% Chinese yuan (ONSHORE) closed DOWN at 6.6508 /Oil FELL to 47.33 dollars per barrel for WTI and 48.10 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6810 yuan to the dollar vs 6.6508 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS MASSIVE USA DOLLARS DISAPPEARS FROM CHINESE SHORES

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN b) REPORT ON CHINA

 

Sunday night:  China devalues the yuan the most in 10 months on the fix

i) onshore yuan  (CNY) 6.6218

ii) offshore yuan (CNH  6.6530)

thus the spread widens and causes huge amounts of USA dollars to leave China.

Then trading began:

CNH: 6.6509

CNY:  6.6810

and then turmoil ruled the day!

iii) Euro/uSA swaps plummets as dollars disappear.

this adds to the turmoil of the pound plummeting.  Late Sunday night, the pound started trading at 1.3361 and ended early morning at 1.3197

( zero hedge)

4. EUROPEAN AFFAIRS

i)Saturday morning:  Newspaper headlines around England: a country divided!

( zero hedge)

ii)Friday night:  Scotland and Norther Ireland may have BREXIT veto rights.  This will then create such a FX mess that gold will skyrocket!

( zero hedge)

iii)Saturday morning:  Sure enough Scotland threatens to veto the BREXIT as they want to stay in the Euro.  Thus, it is possible to see Scotland break with England and adopt the Euro and also the reunification of Northern Ireland with the Republican of Ireland.

again gold will go skyrocketing:

( zero hedge)

iv)Sunday morning:

Adding to the confusion,  the EU, as sore losers are telling England to hurry up with article 50 and abandon the European union.  Yet Germany correctly states that there is no need to rush. Why? Germany has always been the net benefactor  of the union; ( zero hedge)

v)The world’s 400 richest people lose 127 billion from the BREXIT vote:

( zero hedge)

vi)Pro Government newspaper Akit gloats over the fact that the “crusader union is falling apart”. If the EU supports Turkey’s admission into the EU then votes for an exit from each country would prevail. Then Turkey will unleash allof those migrants onto European shores.

a real mess…

( zero hedge)

vii)And now onto Spain’s election Sunday night:

actual results were a little better for the PP party than anticipated.  The actual results are similar to the voting in December and thus the election was futile

( zero hedge)

viii)Sunday morning:

UK Labour Party revolt as a 12th shadow cabinet member resigns as Corbyn refuses to step down

( zero hedge)

ix) Trading today from Europe:

 

a)The pound plummets to new lows; the 10 yr British bond yield slides to under 1% and two British banks are halted;  (Barclays and Royal Bank of Scotland) after crashing.  Deutsche bank also crashed and is trading at its lowest point ever at 12.30 euros.

b) And now closing from trading in Europe:  Bank stocks collapse; Deutsche bank trading at its all time lows/Italian banks close down 20-25%; Euro/dollar swaps collapse signifying huge demand for scarce USA dollars as derivatives blow up; UK default risk rises to 3 year high

 

x)At the end of the day, S and P downgrades Great Britain

( S and P /zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey apologizes to Putin over the death of that Russian Pilot shot down.  They now call Russia a friend.  They also restore ties with Israel and that now opens up the Russian gas pipeline through Turkey and Israel and then onto Europe through Greece:

( zero hedge)

6.GLOBAL ISSUES

GLOBAL MARKETS:

The JPMorgan Quant specialists now target a huge 5o to 10% downdraft in markets :a total of up to 300 billion form all program selling; and a 5- 10% selling in the S and P.  The speed of this downdraft will put many of our derivative players completely offside.  We must watch Deutsche bank to seek if smoke is billowing from its chimney:

(courtesy JPMorgan/Quant specialists/zero hedge)

7.OIL ISSUES i)Canada is back in production and also we are witnessing oil companies in the Gulf of Mexico ramp up production.  Nigeria has made a deal with its rebels and it too will restart production.  This is why oil is tumbling today back into the 46 dollar handle: (courtesy Kennedy/Oil Price.com/zero hedge) ii)This is going to hurt Europe:  the huge Dutch natural gas field Groningen is being curtailed due to a great number of seismic activity in the area.  The Dutch are afraid of a huge earthquake that may render the entire field useless!

(courtesy Dave Forest/Oil Price.com) 8.EMERGING MARKETS

Venezuela

Armed guards are now guarding food trucks and stores in Venezuela

(courtesy Michael Snyder)

9. PHYSICAL STORIES

i)And now Ambrose Evans Pritchard of the UKTelegraph, which backed a BREXIT, gives his take on the vote:

( zero hedge)

ii)Craig Hemke..gives a detailed look at the comex with respect to   probable OI for Monday with respect to Friday’s trading.  The CME gives a projected OI reading for Monday late Friday night.  It generally is not even close to accurate.  However the CME stated that probable OI rose by 60,000 contracts.  Craig discusses the fraud initiated by the banks and how they get away with it

( Craig Hemke/TFMetals/GATA)

 

iii)Greenspan warns that a crisis is imminent and urges a return to the gold standard or else hyperinflation will grip all nations:

( CNBC/Greenspan

 

iv)Bill Holter interview/Holter and SGT report)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Any chance for a rate hike is now in tatters!!  This was the big stumbling block for gold. Now it is clear sailing northbound!

( zero hedge)

Harvey: David Stockman/brexit

ii)Something is up if both Yellen and Carney pull out of an ECB banking forum in portugal:

(courtesy zero hedge)

iii)The dominant sector in the USA economy is the service sector.  With the latest service PMI printing a flat 51.3 on expectations of a rise to 52.00. The USA economy is going nowhere!

(courtesy zero hedge)

 

iv)Bank of America and Citibank are crashing in the USA as contagion is spreading to the USA

( zero hedge)

v)Dallas Fed states that we are in recession.  It’s data suggestion contraction for 18 straight months;( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 619,597 for a HUGE GAIN of 50,091 contracts AS  THE PRICE OF GOLD SKYROCKETED NORTHBOUND with respect to FRIDAY’S TRADING. JUNE IS THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR AND IS A VERY ACTIVE MONTH FOR GOLD DELIVERIES. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A GOOD GAIN IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI RISE to 420 for a loss of 129 contracts. We had 24 notices filed ON FRIDAY, so we GAINED a HUGE 153 contracts or 15,300 additional oz  WILL  STAND FOR METAL. The next active contract month is July and here we saw it’s OI ROSE by a GOOD SIZED 348 contracts up to 5,384.This level is still very high and no doubt will be troublesome for our bankers as the front July contract month open interest is extremely high for a non active month and it also refuses to shrivel . In ounces, FOR THE FRONT MONTH OF JULY, we have 538,400 oz or 16.74 tonnes STAND FOR DELIVERY.  The next big active contract month is August and here the OI ROSE by 39,937 contracts up to 447,424. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was A HUGE at 307,606. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was HUGE at 629,499 contracts. The comex is not in backwardation. I  cannot wait until tomorrow to see the new  OI figures.

Today we had 41 notices filed for 4100 oz in gold.

 

And now for the wild silver comex results. Silver OI FELL by A CONSIDERABLE 1,533 contracts from 218,479 to 217,446 AND CLOSE NEW ALL TIME RECORD HIGH FOR SILVER OPEN INTEREST. The OI fell despite the huge rise in the price of silver.  The banksters are getting nervous. The front month of June saw it’s OI fall by 58 contracts reducing to 32 . We had 93 notices filed YESTERDAY , so we  GAINED 35 SILVER CONTRACTS AND THUS 175,000 ADDITIONAL  OUNCES STANDING FOR DELIVERY IN THIS NON ACTIVE CONTRACT MONTH FOR JUNE.  The next big delivery month is July and here the OI fell BY 4,294 contracts down to 44,936. We have less than  1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at 109,211 which IS huge. The confirmed volume YESTERDAY (comex + globex) was HUGE at  116,396. Silver is not in backwardation . London is in backwardation for several months.   We had 31 notices filed for 155,000 oz.  

JUNE contract month:

INITIAL standings for JUNE

June 27. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  NIL

SCOTIA Deposits to the Dealer Inventory in oz 1736.100 OZ

54 KILOBARS

BRINKS Deposits to the Customer Inventory, in oz   112,528.000 OZ

SCOTIA.,HSBC

3500 KILOBARS No of oz served (contracts) today 41 contracts
(4100 oz) No of oz to be served (notices) 379 contracts

37,900 oz Total monthly oz gold served (contracts) so far this month 15,481 contracts (1,548,100 oz)

(48.150 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  256,902.3 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  1736.100 oz

(54 KILOBARS)

total dealer deposit:  1736.100  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 2 customer deposits:

i) Into Scotia: 16,075.000 oz (500 KILOBARS)

ii) INTO HSBC  96,453.000   (3,000 KILOBARS  ALMOST)

Total customer deposits; 112,528.000   OZ  3500 KILOBARS

Today we had 0 customer withdrawal:

 

total customer withdrawals:  NIL oz

Today we had 1 adjustments:

i) Out of Delaware:  385.800 oz oz were transferred out of the customer and into the dealer Delaware.(12 kilobars)

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 41 contracts of which 11 notices was stopped (received) by JPMorgan dealer and 3 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,481) x 100 oz  or 1,548,100 oz , to which we  add the difference between the open interest for the front month of JUNE (420 CONTRACTS) minus the number of notices served upon today (41) x 100 oz   x 100 oz per contract equals 1,586,000 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED AND WE HAVE NOW WITNESSED THE SAME RESULT FOR JUNE.   Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,481) x 100 oz  or ounces + {OI for the front month (420) minus the number of  notices served upon today (41) x 100 oz which equals 1,586,000 oz standing in this   active delivery month of JUNE (49.331 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE  GAINED BACK  ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.331 TONNES) . WE GAINED 153 contracts or an additional 15300 oz will  stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. SOMEBODY TODAY WAS IN URGENT NEED OF  PHYSICAL GOLD Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 49.331 tonnes of gold standing for JUNE and 53.43 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 48.855 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018 = 65.426 tonnes still standing against 53.36 tonnes available.  Total dealer inventor 1,717,805.872 tonnes or 53.43 tonnes Total gold inventory (dealer and customer) =8,968,352.761 or 278.966 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.966 tonnes for a loss of 24 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!      end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 27.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  49,083.495 oz

CNT

HSBC Deposits to the Dealer Inventory NIL

  Deposits to the Customer Inventory  750,813.400  oz

JPM,SCOTIA No of oz served today (contracts) 31 CONTRACTS 

(155,000 OZ) No of oz to be served (notices) 1 contracts

5,000 oz Total monthly oz silver served (contracts) 615 contracts (3,075,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  24,237,682.6 oz

today we had 0 deposit into the dealer account

 

total dealer deposit:NIL oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 2 customer deposits:

i) Into JPMorgan:  150,596.100 oz

 

iii) Into Scotia: 600,117.300 OZ

Total customer deposits: 750,813.400 oz

everyday for the past few weeks, JPMorgan has been bringing in CONSIDERABLE  AMOUNT OF SILVER

 

We had 0 customer withdrawals

:

total customer withdrawals:  nil  oz

   

 

 we had 1 adjustment

i) Out of CNT: 150,821.49 oz was withdrawn from the customer and this landed into the dealer account of CNT

The total number of notices filed today for the JUNE contract month is represented by 31 contracts for 155,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (615) x 5,000 oz  = 3,075,000 oz to which we add the difference between the open interest for the front month of JUNE (32) and the number of notices served upon today (31) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  615 (notices served so far)x 5000 oz +{32 OI for front month of JUNE ) -number of notices served upon today (31)x 5000 oz  equals  3,080,000  of silver standing for the JUNE contract month. (TERRIFIC FOR A NON ACTIVE MONTH) We GAINED 35 SILVER CONTRACTS OR 175,000 ADDITIONAL  SILVER OUNCES WILL STAND FOR DELIVERY  IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.   Total dealer silver:  23.961 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   151.469 million oz The total open interest on silver is NOW NEAR its all time high with the record of 218,979 being set June 24.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. END And now the Gold inventory at the GLD June 27/a huge deposit of 18.415 tonnes into the GLD inventory/the new inventory rests at 934.313 tonnes.  The addition was a paper addition and not physical june 24./strange!! no additions to gold with its huge 58 dollar advance?? june 23/no change in gold inventory tonight/rests at 915.90 tonnese June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx june 27/ Inventory rests tonight at 934.313 tonnes

end

Now the SLV Inventory June 27/ a small deposit of 570,000 oz in the SLV inventory/Inventory rests at 332.784 million oz June 24/This makes no sense!! 855,000 oz of silver leaves the SLV headed straight to Shanghai/Inventory rests at 332.214 million oz June 23/ no change in silver inventory/rests tonight at 333.069 million oz June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/ June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495 June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz . June 27.2016: Inventory 332.784 million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.3 percent to NAV usa funds and Negative 2.6% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 61.5% Percentage of fund in silver:37.2% cash .+1.3%( June 27/2016). / 2. Sprott silver fund (PSLV): Premium FALLS  to +0.82%!!!! NAV (June 27/2016)  3. Sprott gold fund (PHYS): premium to NAV  falls TO +0.36% to NAV  ( June 27/2016) Note: Sprott silver trust back  into POSITIVE territory at +36% /Sprott physical gold trust is back into positive territory at +0.82%/Central fund of Canada’s is still in jail.      

END

 

Greenspan warns that a crisis is imminent and urges a return to the gold standard or else hyperinflation will grip all nations:

(courtesy CNBC/Greenspan)

Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard

On Friday afternoon, after the shocking Brexit referendum, while being interviewed by CNBC Alan Greenspan stunned his hosts when he said that things are about as bad as he has ever seen.

“This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say.”

Strangely enough, he was not refering to the British exodus but to America’s own economic troubles.

Today, Greenspan was on Bloomberg Surveillance where in an extensive, 30 minutes interview he was urged to give his take on the British referendum outcome. According to Greenspan, David Cameron miscalculated and made a “terrible mistake” in holding a referendum. That decision led to a “terrible outcome in all respects,” Greenspan said. “It didn’t have to happen.” Greenspan then noted that as a result of Brexit, “we are in very early days a crisis which has got a way to go”, and point to Scotland which he said will likely have another referendum on its own, predicting the vote would be successful, and Northern Ireland would “probably” go the same way.

His remarks then centered on the Eurozone which he defined as a truly “vulnerable institution,” primarily due to Greece’s inclusion in its structure. “Get Greece out. They’re a toxic liability sitting in the middle of a very important economic zone.” Ironically, the same Eurozone has spent countless hours doing everything in its power to show just how unbreakable the union is by preserving Greece, while it took the UK just one overnight session to break away. Luckily the UK was not part of the monetary union or else it would be game over.

But speaking of crises, Greenspan warned that fundamentally it is not so much an issue of immigration, or even economics, but unsustainable welfare spending, or as Greenspan puts it, “entitlements.”

The issue is essentially that entitlements are legal issues.  They have nothing to do with economics.  You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it’s going to be funded.  Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate.  That annual growth rate of two percent is not adequate to finance the existing needs.

 

I don’t know how it’s going to resolve, but there’s going to be a crisis.

 

This is one of the great problems of democracy.  It goes back to the founding fathers.  How do you handle a situation like this?  And it’s very troublesome, but eventually you get things like Margaret Thatcher showing up in Britain.  Their situation is far worse than ours.  And what she did is she turned it all around essentially by, as I remember it, the miners were going to strike and she decided – she knew they were going to strike.  Since at that point, the government owned these coal mines, she built up a huge inventory so that when they went on strike, there was enough coal in Britain so that eventually the whole union structure collapsed.  She fundamentally changed Britain to this day.  The fact that we are doing so well in the E.U. is not altogether clear that it is the E.U. or whether it was Margaret Thatcher.

When asked if “we need an accident of history” to address this, Greenspan replied “Probably. In the United States, social benefits, which is the more generic term, or entitlements, are considered the third rail of American politics.  You touch them and you lose.  Now, that is a general view.  Republicans don’t want to touch it.  Democrats don’t want to touch it.  They don’t even want to talk about.  This is what the election should be all about in the United States.  You will never hear one word from either side.  ”

This is the same entitlements crisis that Stanley Druckenmiller has also been raging about for years, most recently in his “The Endgamepresentation delivered at the Ira Sohn conference.

Greenspan then went on to bash the false “recovery” narrative, warning that “the fundamental issue is the fact that productivity growth has ground to a halt.” 

 We are running out of people.  In other words, everyone is very pleased at the fact that the employment rate is rising.  Well, statistics tell us that we need more and more people to produce less and less.  That is not a prescription for a viable political system.  And so what we have at this stage is stagnation.  I don’t think that there is anything out there which suggests that there is a recession, but I don’t know that.  What I do know is that the money supply, and too, which has always been a critical indicator of inflation, is for the first time going up remarkably steadily 6 percent, 7 percent, almost a straight line.  It’s tilted up in the last several months.  It’s added a percentage point or two.  The thing that we should be worrying about now, which we have actually given no thought to whatsoever, is that this type of economic environment ends with inflation.  Historically, fiat money has always ended up that way.

And here we get to the heart of the matter, because in not so many words, Greenspan effectively says that hyperinflation is coming:

I know if you look at human history, there are times and times again where we thought that there was no inflation and everything was just going fine.  And I just basically say, wait.  This is not the way this thing ordinarily comes up.  I don’t know.  I cannot say I see it on the horizon.  In fact, commodity prices are soggy.  The oil prices has had a terrific impact on global inflation.  It’s not about to emerge quickly, but I would not be surprised to see the next unexpected move to be on the inflation side.  You don’t have inflation now.  And you don’t have it until it happens.

Of course, Greenspan ignores his own role in the creation of the boom-bust cycle which has doomed the world to series of ever more destructive bubbles and ultimately, hyperinflation which will likely be unlashed once the helicopter money inevitably arrives. In retrospect, the 90-year-old, who clearly is looking forward not backward, has a simple solution: the gold standard.

If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, we’d be fine.  Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard.  I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?

Why indeed. And of course, that’s rhetorical.

* * *

His full interview is below.

And now your overnight trading in gold,MONDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) Gold Surges 20% In GBP To Over £1,012/oz

Gold has surged over 10% in euro terms in the last two trading days due to the fallout of the UK’s monumental decision to leave the European Union. Gold has extended the biggest price gains since 2008 as market turmoil and sharp falls in stocks globally and especially bank stocks led to safe haven demand for bullion coins and bars, especially in the UK and Ireland.

Gold in GBP – 1 Year

Gold has surged in all currencies – especially in sterling and euros. Gold has risen over one hundred euros per ounce from €1,091/oz to over €1,210/oz. Gold has risen over one hundred and sixty pounds per ounce or 20%, from £847.55/oz to over £1,012/oz and gold has risen over eighty dollars per ounce or 6.5%, from $1,251/oz to over $1,331/oz in two trading days.

Bullion rose for a second day as the pound extended a record selloff and European equities and especially banks fell to the lowest since February. Gold closed 4.7 percent  higher on Friday in dollars as the referendum result caused turmoil across global markets, spurring a $4.3 billion surge in holdings in gold ETFs, the most in four years according to Bloomberg.

Gold and Silver News
Gold Surges for a Second Day as Investors Seek Brexit Havens (Bloomberg)
Pound slump deepens amid Brexit turmoil as gold gains with yen (Fin24)
Spot gold climbs 1.5 pct, investors seek safe-haven after ‘Brexit’ vote (Reuters)
Hedge Funds Win World-Beating Rally With Record Gold Holdings (Bloomberg)
Gold Rally Isn’t Over as Traders See Lasting Brexit Gain: Survey (Bloomberg)

Gold Helps One of UK’s Richest Man – “I May Be the Winner” (Reuters)
Soros Wins Big With Gold From Brexit (Independent)
BREXIT Impacts World Economy – Crash Coming – Casey (FMT)
Sky has not fallen after Brexit but we face years of hard labour – AEP (Telegraph)
Gold Acts as Portfolio Insurance and Protection Again Human Error (Smauldgld)
Goldman Tells Clients To Start Buying Gold; Raises Price Target By $100 (Zero Hedge)
Read More Here

Gold Prices (LBMA AM)
27 June: USD 1,324.60, EUR 1,200.49 & GBP 996.36 per ounce
24 June: USD 1,313.85, EUR 1,181.28 & GBP 945.58 per ounce
23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce
22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 & GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 & GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 & GBP 899.41 per ounce

Silver Prices (LBMA)
27 June: USD 17.70, EUR 16.06 & GBP 13.40 per ounce
24 June: USD 18.04, EUR 16.32 & GBP 13.18 per ounce
23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce
22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 & GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 & GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 & GBP 12.19 per ounce

Recent Market Updates
–  BREXIT Day – Markets Becalmed – Gold Panic Prelude – Trading Hours
– Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market
– Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”
– Gold Prices Higher For 5th Session On BREXIT and FED
– If BREXIT Happens – “Gold Will Be The World’s Strongest Currency”
UK Gold Demand Rises On BREXIT “Nerves”
 Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
 Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

Please share our research with family, friends and colleagues who you believe will benefit from being informed by it. www.GoldCore.com

end

No gold leaves Federal Reserve Bank of New York and no doubt Germany is quite angry!

(courtesy Harvey)

Federal Reserve Bank of New York, gold inventory movements out of the Bank:

June 26.2016:

Last month the reading from the FRBNY was 7,951.00 USA dollars worth of gold inventory valued at 42.22 dollars per oz.

This month the reading from the FRBNY is:  7951.00.00 USA dollars worth of gold inventory valued at 42.22 dollars per oz

Thus 0 dollars worth of gold and 0 ounces left the FRBNY.

Germany must be mad. Also the boys must be having great difficulty in finding the necessary gold to sent to Frankfurt.

end

And now Ambrose Evans Pritchard of the UKTelegraph, which backed a BREXIT, gives his take on the vote:

(courtesy zero hedge)

Ambrose Evans-Pritchard: The sky has not fallen after Brexit but we face years of hard labor

* * *

By Ambrose Evans-Pritchard
The Telegraph, London
Friday, June 24, 2016

It is time for Project Grit. We warned over the final weeks of the campaign that a vote to leave the European Union would be traumatic, and that is what the country now faces as markets shudder and Westminster is thrown into turmoil. …

The stunning upset last night marks a point of rupture for the post-war European order. It will be a Herculean task to extract Britain from the EU after 43 years enmeshed in a far-reaching legal and constitutional structure. Scotland and Northern Ireland will now be ejected from the EU against their will, a ghastly state of affairs that could all too easily lead to the internal fragmentation of the Kingdom unless handled with extreme care. …

end

Craig Hemke..gives a detailed look at the comex with respect to   probable OI for Monday with respect to Friday’s trading.  The CME gives a projected OI reading for Monday late Friday night.  It generally is not even close to accurate.  However the CME stated that probable OI rose by 60,000 contracts.  Craig discusses the fraud initiated by the banks and how they get away with it

(courtesy Craig Hemke/TFMetals/GATA)

TF Metals Report: Onward toward bullion bank collapse

Submitted by cpowell on Sat, 2016-06-25 23:51. Section:

7:48p ET Saturday, June 25, 2016

Dear Friend of GATA and Gold:

A lot of imaginary gold was created and sold Friday to keep the monetary metal’s price under control in futures contracts on the New York Commodities Exchange following the United Kingdom’s declaration of independence from the European Union, the TF Metals Report’s Turd Ferguson writes today. Ferguson attributes it to the “doubling down” of investment banks on their short position in gold futures.

But your secretary/treasurer has to wonder whether the gold shorting was actually done by governments and central banks using the investment banks as fronts. After all, records on file at the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission show that governments and central banks are surreptitiously trading all major U.S. futures contracts —

http://www.gata.org/node/14385

http://www.gata.org/node/14411

— and the major central banks announced on the eve of the Brexit referendum that they were prepared to intervene in the markets as necessary to control prices:

http://www.gata.org/node/16518

Fortunately for governments and central banks, mainstream financial news organizations will never inquire into this, having made themselves crucial participants in market rigging.

Ferguson’s analysis is headlined “Onward toward Bullion Bank Collapse” and it’s posted at the TF Metals Report here:

http://www.tfmetalsreport.com/blog/7700/onward-toward-bullion-bank-colla…

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

and here is his commentary in full!

Onward Toward Bullion Bank Collapse By Turd Ferguson | Saturday, June 25, 2016 at 12:14 pm

The events of Friday not only speed the eventual collapse of the Bullion Bank Paper Derivative Pricing Scheme, they also highlight the fraud of this current system and shine light upon the utter desperation of these Banks to maintain it.

We’ve written about this countless times over the past six years. Here are just two recent examples:

In short, as a measure of controlling the paper prices of gold and silver, The Bullion Banks that operate on The Comex act as de facto market makers of the paper derivative, Comex futures contract. This gives them the nearly unlimited ability to simply conjure up new contracts from thin air whenever demand for these contracts exceeds available supply and, almost without exception, these Banks issue new contracts by taking the short side of the trade versus a Spec long buyer. Never do these Banks put up actual collateral of physical metal when issuing these paper derivative contracts. Instead, they simply take the risk that their “deep pockets” will allow them to outlast the Spec longs and, without the risk of having to make physical delivery, The Banks almost always win. Eventually, an event like the runup to the Brexit vote or all of the Fed Goon jawboning of May will spook The Specs into selling and this Spec selling is used by The Banks to buy back (cover) their ill-gotten naked shorts and lower total open interest back down. (If you’re confused by this, please click the second link listed above for a more detailed explanation of this process.)

How this influences price is simple. If the supply of the paper derivative futures contract was held constant on a daily basis, then price would have to rise or fall based upon simple supply/demand dynamics. When the amount of buyers exceeded sellers, price would have to rise to a point at which existing owners would be willing to sell. But this is NOT how the Comex futures market operates! Because the market-making Banks have the ability to create new contracts from whole cloth, they can instead flood the “market” with new supply whenever it’s necessary. This mutes potential upside moves by imparting fresh new supply for the Spec buyers to devour. Price DOES NOT have to rise to a new, natural equilibrium. Instead, price equilibrium is found where demand meets this new supply.

As a case in point, simply study the “market” impact on gold “prices” in the hours that followed the Brexit decision in the UK. As turmoil shook the global markets, gold shot higher and, at one point, was up nearly $100. However, within hours it had given back nearly half of those gains and then spent the remainder of the day in am unusual and very tight trading range while virtually every other “market” was rocked with volatility throughout the trading day. See below:

The all-important question of the day is: How and why was this done? 

First, the “how”. At the end of each trading day, the CME Group issues an update that details total open interest changes for both gold and silver. Friday’s preliminary totals can be found here:http://www.cmegroup.com/trading/metals/precious/gold_quotes_volume_voi.html  What does the data show? On Friday, with global markets in turmoil and precious metals markets rallying significantly, The Bullion Banks on the Comex issued brand new supply of nearly 60,000 new paper gold contracts! At 100 paper gold ounces per contract, this represents a potential future obligation to deliver almost 6,000,000 ounces of gold, should the Spec long buyers ever stand for delivery (which they won’t). So, ask yourself these questions:

  • Did the world’s gold producers all suddenly decide to forward sell and hedge 186 metric tonnes of future production yesterday, just as the most significant economic event in eight years was beginning to unfold?

OR

  • Did the Bullion Banks suddenly put up a few million ounces of their own gold and then lever it up a few times and issue 60,000 new contracts based upon this collateral deposit?

Obviously, the answer to both questions is a big, bold NO! Instead, the market-making and price manipulating Banks simply played their usual game, writ large. In a desperate attempt to contain price, they simply issued these 60,000 new contracts and fed them to the Spec buyers. So next, ask yourself these vital questions:

  1. Without this added supply…which grew total open interest by over 10% in one day!…how much further would the paper price of gold have risen yesterday?
  2. If a natural equilibrium was forced to be found between buyers and sellers of existing contracts, would price have settled even higher?
  3. And how much higher? Gold was up nearly $60 yesterday. But without the paper derivative supply increase of 10%, would it have risen $100? $200??

So now let’s address the more important part of the question: “why”.

Simply put, these Banks are desperate and on the run. However, in their arrogance, they are still flailing away and attempting to postpone their demise. The minimal amount of physical gold that they do hold and utilize to backstop the paper derivative market is shrinking rapidly as investors and institutions around the globe seek gold as a safe haven against the financial devastation of negative interest rates.

But not only are The Banks attempting to reverse this trend that is rapidly deleveraging their system, they are also desperate to protect their established NET short positions from additional paper losses. Recall that the CFTC generates something that it calls The Bank Participation Report every month and we write about this report almost every month, too. Here’s the latest:http://www.tfmetalsreport.com/blog/7675/latest-bank-participation-report

So let’s cut to the chase…

With gold at $1060 back on December 1, 2015, the 24 Banks covered by this report were NET short just 30,757 Comex gold contracts. After running this NET short position all the way to 195,262 contracts on May 3, 2016, the report for June showed a NET short position of 133,396 contracts. However, data for this latest report was surveyed on June 7, with price at $1247 and total Comex open interest of 496,330 contracts. By this past Tuesday, in the days before the Brexit total were announced, price had risen to $1318 and then fallen back to $1270. However, total Comex open interest had risen to 571,517 contracts and, by analyzing the latest CFTC-generated Commitment of Traders Report, we can safely estimate that The Banks were likely NET short at least 180,000 Comex gold contracts.

Putting this all together, while price rose from $1060 to $1270, these 24 Banks added about 150,000 contracts of NET short liability to their Comex trading operations. So, with a NET position of 180,000 contracts short and with every contract representing 100 ounces of paper gold, the paper losses to these Banks for every $10 move in the gold price amounts to about $180,000,000. Multiplying that out…When gold was up nearly $100 early Friday, these Banks were on the losing side of a $1,800,000,000 move. Even for the likes of JPM et al, that’s a lot of fiat!

So, what did they do? Like any arrogant and addicted gambler, they doubled-down! They put “good money after bad” and, in doing so, likely increased their NET short position to nearly 250,000 contracts! All of this in order to suppress price and get it back under their control. This also allows them to somewhat control the message gold was sending. Can you even imagine the headlines if gold was up $200 yesterday? By holding the gains to just $50, The Banks hope to:

  • Manage the increased physical demand these higher prices are causing AND
  • Mitigate their paper losses. All of those new shorts lowered price by nearly $50 and nearly cut their one-day paper losses in half.

In the end, what’s the point of this post? First and foremost, it’s simply the latest installment of our efforts to shine the light of truth upon the incredible fraud and sham that is the current paper derivative pricing scheme. The Comex-derived price is not at all related to the price/value of true physical gold. Rather, the price discovered on Comex is simply the price of the derivative, itself, with the price of this derivative determined by changes of supply and demand of the derivative. Barely any physical metal ever exchanges hands on Comex so it is entirely inaccurate to say that the price discovered there has any connection at all to the underlying physical.

That said, though, we’ll leave you with one last link that you simply must read. Mark O’Byrne at Goldcore is closely-connected on the ground in London. In all of the hubbub of the Thursday and Friday, you may missed his daily report. If Mark and his sources are correct, we may be rapidly approaching the demise and destruction of these criminal Bullion Banks and their fraudulent pricing scheme. Demand for unencumbered, true physical gold is the key to ending this system and finding justice for gold holders, miners and producers around the globe…and this link may prompt you to think that we are closer to The End than at any other time in the past 40 years: http://www.goldcore.com/us/gold-blog/gold-lower-despite-panic-due-to-supply-issues-in-inter-bank-gold-market/

Friday’s Brexit vote truly was a game-changer and the single most important financial event since 2008. That it might accelerate the death throes of the Bullion Bank Paper Derivative Pricing Scheme is not something that is fully appreciated by the global gold “community”. Hopefully, this post has helped you to understand where we are at present, the reasons behind the price action of Friday and the significance of global physical supply/demand versus paper price going forward.

TF

www.tfmetalsreport.com/subscribe

end

Bill Holter and Sean of SGT discuss the BREXIT and the huge number of body bags taken to the morgue: BREXIT BODY COUNT — Bill Holter BREXIT BODY COUNT — Bill Holter BREXIT: Does it signal a tidal wave of rising sentiment against the international criminal banking syndicate and… end Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

:

1 Chinese yuan vs USA dollar/yuan  DOWN to 6.6220 ( MASSIVE DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6810) / Shanghai bourse  UP 41.42 OR 1.45%   / HANG SANG CLOSED DOWN 31.30 OR 0.16%

2 Nikkei closed UP 357.19 OR 2.39% /USA: YEN RISES TO 101.53

3. Europe stocks opened ALL IN THE RED  /USA dollar index UP to 96.31/Euro DOWN to 1.1007

3b Japan 10 year bond yield: FALLS  TO -.190%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 101.53

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  47.36  and Brent: 48.10

3f Gold UP  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil DOWN for WTI andDOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.107%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 9.34%/: 

3j Greek 10 year bond yield FALL to  : 8.670%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1328.60/silver $17.76(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 0 & 09 in  roubles/dollar) 65.05-

3m oil into the 47 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT a huge devaluation  from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.62 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9546 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -.107%

/German 10 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.471% early this morning. Thirty year rate  at 2.3000% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

European Stocks, US Futures Extend Slide On UK Chaos, Pound Carnage

With global asset correlations once again approaching 1, overnight stocks have been trading in broadly “risk off” mode, following every twist of pound sterling and the rapidly deteriorating British financial situation as “chaos infects” virtually all markets, from China, to European banks, to US equity futures.  As a result of ongoing aftershocks from the Brexit vote, coupled with the sudden political chaos in UK politics, where both parties now seem in disarray, with the pound has extended its selloff to a fresh 31-year low dropping below the Friday lows while European equities are dropping to levels last seen in February. Asian shares rebound, as oil, gold advance and steel prices surge in Shanghai.

“It’s going to continue to be a fairly choppy ride,” Michael Hewson, a market analyst at CMC Markets in London told Bloomberg. “Banking stocks will continue to struggle.”

U.S. stock-index futures indicated equities will deepen declines, after the S&P 500’s worst selloff in ten months following Friday’s U.K. referendum. Contracts on the S&P 500 slid 0.5% to 2,009 in early trading. It earlier erased a drop as Asian equities rallied. Dow Jones Industrial Average futures fell 96 points to 17,150.

“We are in for a volatile period but I don’t think it’s one way down,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., which oversees about $116 billion. “The dust will settle and investors will realize there’s a long way to go for all of this and markets will eventually start to grind higher again.”

The only silver lining overnight was in Spain, where despite initial exit polls suggesting a victory for the left-wing alliance, the final result confirmed a repeat of the December result in which not only alliance will have a majority in parliament, and in fact Rajoy’s PP gained some votes, leading to a rebound in the IBEX, while yields on Spanish 10Y dipped below those of comparable Italian bonds.

Market Snapshot

  • S&P 500 futures down 0.3% to 2012
  • Stoxx 600 down 2% to 316
  • MSCI Asia Pacific up 0.6% to 126
  • Nikkei 225 up 2.4% to 15309
  • Hang Seng down 0.2% to 20227
  • Shanghai Composite up 1.5% to 2896
  • S&P/ASX 200 up 0.5% to 5137
  • US 10-yr yield down 9bps to 1.47%
  • Dollar Index up 0.83% to 96.24
  • WTI Crude futures down less than 0.1% to $47.60
  • Brent Futures up 0.2% to $48.49
  • Gold spot up 0.8% to $1,327
  • Silver spot up 0.3% to $17.78

Top Global News

  • Battered British Government Seeks Unity to Soothe Brexit Nerves: Osborne says Britain has resolve to cope with hit to economy
  • U.K. 10-Year Gilt Yield Drops Below 1% for First Time on Record: yield -9bps to 0.993
  • Brexit Adds $380b to Global Negative-Yielding Bond Pile: investors seek haven debt after U.K. votes to quit EU
  • Bloomberg View: Markets Were Rational, But U.K. Voters Weren’t, Matthew Winkler writes
  • Rajoy Wins as Spain Cleaves to Establishment After Brexit: traditional parties consolidate position as Podemos stumbles
  • Spanish Bonds Surge After Rajoy Wins Election With Bigger Margin: Rajoy’s People’s Party consolidates power as Podemos stalls
  • Italy Weighs $44b Capital Injection in Banks, Fatto Says: Il Fatto Quotidiano cites government, financial sources it doesn’t identify
  • Sanofi, Boehringer Ingelheim Agree to $25b Asset Swap: Boehringer to get animal-health unit, pay EU4.7b

Looking at regional markets, there was some optimism in Asia where some local bourses saw a mild rebound led by the Nikkei 225 (+2.4%) outperforms amid bargain buying following last Friday’s near 8% decline with reports PM Abe instructed Finance Minister Aso to intervene aggressively in response to the market if needed and also instructed the BoJ to ensure liquidity. Furthermore, Japan was also said to consider a JPY 10 trillion fiscal stimulus package in case of excessive JPY strength. Elsewhere, Chinese markets are mixed with the Hang Seng (-0.2%) resuming last Friday’s declines, while the Shanghai Comp (+1.5%) recovered following a firm PBoC liquidity injection and strength in Chinese commodities. Elsewhere, 10yr JGBs trade in positive territory despite the advances in Japanese stocks, as hopes of BoJ easing increased demand for the paper, while the central bank was also in the market for JPY 475b1n in government debt and inflation-linked bonds.

Top Asian News

  • Line Delays Setting IPO Price Range Amid Brexit Turmoil: Japan messaging service plans largest tech IPO of the year
  • China Weakens Yuan Fixing by Most Since August as Dollar Surges: Reference rate weakened by most since aftermath of devaluation
  • Yen Brexit Surge Seen Testing 95 in Threat to BOJ Stimulus Goals: HSBC changes year-end dollar-yen target to 95 from 115
  • HSBC, Nomura Fall in Asia as Brexit May Force Costly London Move: Nomura shares complete biggest two-day drop since March 2011
  • Pimco, JPMorgan See Asian Bond Stability Appealing After Brexit: Reduced supply gives support as dollar bond offerings drop 18%

In Europe the picture has been decidedly uglier. The leader of the EU parliament Martin Schulz said that David Cameron needs to formally begin proceedings to depart the EU, adding he wants the British PM to trigger Article 50 on Tuesday.  German Chancellor Angela Merkel has stated that the EU has “no need to be particularly nasty in any way” in the discussions with Britain about its exit from the bloc. However, German Government Spokesman Siebert states that there can be no informal negotiations will take place with the UK prior to Article 50 being triggered.Spain’s election results saw conservatives Partido Popular (PP) secure 136 of 350 seats, which although short of a majority, saw the party’s leader and acting Spanish PM Rajoy demand the right to govern after election win. In the UK, Moody’s downgraded UK’s Aa1 outlook to negative and stated that UK’s creditworthiness is at a larger risk after the Brexit vote as it faced substantial difficulties on exit negotiations.

Top European News

  • HeidelbergCement Said to Choose Bidders for $1b of Assets: Cimsa Cimento, Cementir among bidders for Belgian business
  • London Broker Foxtons Says Brexit to Prolong Housing Woes: sees lower 2016 rev., profit as decision to quit the EU prolongs uncertainty in London’s residential property market
  • EasyJet Joins IAG in Paring Profit Goal After Brexit Vote: demand for flights set to slide for rest of summer period
  • Nordea CEO Pledges Dividend Growth Amid Capital Shortfall Fears: CEO Casper von Koskull speaks to Bloomberg
  • Wirecard Rises Most in Two Weeks on Report of Alipay Interest: Bild report says Alipay discussing buying 25% stake

In FX, the pound was the worst performing among major currencies, falling to $1.3235 as of 10:27 a.m. London time after Friday’s 8.1 percent plunge. The euro weakened 0.9 percent versus the greenback, after sliding 2.4 percent in the last session, and the Norwegian krone fell 2 percent against the dollar. While protesters angry at the result took to the U.K. streets at the weekend and circulating petitions calling for a fresh vote, the EU’s founding members bolstered pressure on the U.K. to leave the group as soon as possible. Cameron has said he is in no hurry to make the move, indicating he will wait as long as three months before making way for a new leader who will be responsible for negotiating the exit. “People are finding it difficult to comprehend what Brexit implies for the future — we don’t know yet what the magnitude of the shock will be,” said Steven Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. in London. “So far, in terms of sterling-dollar, we’ve seen half the decline we’re likely to see this year.”

In Asia, the yen strengthened 0.3 percent to 101.96 per dollar. It jumped 3.9 percent in the last session and reached 99.02, the strongest since 2013. Finance Minister Taro Aso told reporters Monday that Prime Minister Shinzo Abe has asked for various measures to stabilize Japanese markets. The comments came after a meeting between officials including Aso, Abe and Bank of Japan Deputy Governor Hiroshi Nakaso. The yuan fell 0.2 percent after China’s central bank weakened the currency’s reference rate by 0.9 percent, the most since the aftermath of August’s devaluation. The move came after the Bloomberg Dollar Spot Index surged on Friday by the most since 2011 following the U.K.’s referendum.

In Commodities,  gold gained 0.8 percent on demand for a haven, set for its highest close since July 2014. West Texas Intermediate crude was little changed, erasing earlier losses. It plunged 4.9 percent on Friday, its biggest drop since February. Copper added 0.3 percent in London, while nickel gained 0.2 percent. “Everything is caught up in Brexit,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne. “The oil fundamentals for the moment will be put to one side as markets try to figure out exactly how this will all work.”

* * *

Bulletin Headline Summary from Bloomberg and RanSquawk

  • Brexit continues to dictate price action with GBP plummeting below 1.3300, UK financials underperforming and Gilt yields falling below 1%.
  • IBEX outperforms in reaction to the Spanish election with leftist Podemos party less likely to gain power.
  • As well as the fallout of the Brexit vote, other highlights include US Advanced Goods Trade Balance, Composite & Services PMIs alongside speeches from ECB’s Draghi and PBoC’s Governor Zhou.
  • Treasuries higher in overnight trading while Asian equities rally, European stocks drop as GBP drops below $1.32 for the first time since 1985 and the USD index strengthens.
    ECB removed Fed Chair Yellen from scheduled list of speakers for Sintra Forum on Wednesday, according to ECB comments
  • The aftershocks of the U.K.’s vote to leave the European Union reverberated across financial markets after a weekend of political turmoil, with the pound extending its selloff and European equities dropping to levels last seen in February
  • U.K. sovereign 10-year yields fell below 1% for the first time amid speculation the nation’s exit from the European Union will push the Bank of England to cut interest rates to a record low as soon as next month
  • Leaders of Britain’s splintered government sought to reassure investors they’ll be able to navigate the fallout from the stunning vote to quit the European Union as the pound extended its drop and international policy makers scrambled to respond
  • George Soros, the billionaire whose 1992 wager against the pound made hedge fund history, was “long” the currency before Britain’s vote to leave the European Union on Friday
  • Spanish government bonds jumped, pushing the yield down by the most in eight months, after Acting PM Mariano Rajoy defied opinion polls to consolidate his position in the country’s general election
  • Italy is considering injecting as much as 40 billion euros ($44 billion) into some lenders after the U.K.’s vote to leave the European Union sparked a selloff among banks already hurt by investor concerns tied to their bad loans
  • China weakened its currency fixing by 0.9% to 6.6375/dollar, the most since last August as global market turmoil spurred by Britain’s vote to leave the European Union sent the dollar surging
  • Asian stocks rebounded from the steepest slump since August as investors are watching for policy action by central banks globally to ease the market turmoil and pump liquidity into financial markets
  • Japan’s 20- and 30-year bond yields dropped to record lows as the U.K.’s decision to leave the European Union reinforced demand for the haven of government debt

DB’s Jim Reid concludes the overnight wrap

As we glance over our screens, the focus in markets this morning is once again in FX where the Pound is down just a shade over 2% versus the US Dollar and hovering at 1.3398 as we type – its yet to have quite breached the early Friday lows however. Sterling is also down -1.14% versus the Euro although interestingly it’s not actually the Pound which is the worst performer, but the Norwegian Krone which has weakened over 3% with the falls in Oil seemingly compounding the pain there. Staying in FX, the PBoC this morning weakened the CNY fix by the most since August (0.9% weaker) in the wake of the surge for the Dollar on Friday.

Meanwhile, equity markets are a little bit more mixed this morning. Following that huge leg lower on Friday, the Nikkei is +1.39% currently while bourses in China (Shanghai Comp +0.65%) are also a touch firmer. The ASX (+0.52%) is also up however the Hang Seng (-0.95%) and Kospi (-0.31%) are both down. FTSE 100 futures are currently -3.60% while US equity index futures are down around half a percent. Elsewhere, credit markets are weaker this morning with iTraxx indices in Asia and Australia between 4bps and 5bps wider.

The moves this morning follow what was a huge sell-off for risk assets on Friday. That said moves were relatively orderly in the end with a number of assets rebounding from the late Asia and early European open lows. Unsurprisingly it was the moves for Sterling which were front and centre for most. The Pound ended the session down at 1.3679 which was a loss of just over 8% – the biggest daily fall since data starting from the Bretton Woods collapse. That somewhat masks the fact though that the currency traded in an incredible 13.52% range over 7 hours or so. To put that into some perspective the range (on an intraday basis) for the entire 2016 prior to this was 8.03%.

Looking at performance for equities, the end result for the Stoxx 600 was a -7.03% loss which is the fifth biggest fall of all time for the index (and the largest since 2008). Regionally it was the peripherals which were hardest hit. The IBEX closed -12.35% and the FTSE MIB was -12.48%. The DAX and CAC collapsed -6.82% and -8.04% respectively however the relative outperformer on the day was actually the FTSE 100 which closed -3.15%. It had opened initially over 8% lower but bounced back as the session progressed with a number of USD-sensitive earners benefiting (BP +1.73%, GlaxoSmithKline +3.71%, Shell +1.08%, Astra Zeneca +3.41%). It’s amazing to see that the index also had its first positive week (+1.95%) since May. Across the pond the S&P 500 closed -3.59%.

There was no hiding for banks however. Indeed the Euro Stoxx Banks index tumbled -18.02% and easily the most of all time (the next closest being a -10.26% drop in 2008). Peripheral Banks were down anywhere from 20-30% and even the best performing banks in the index were down high single digits.

The underperformance for Banks was certainly the case for credit markets too. Indeed the iTraxx Main and Crossover indices were 19bps and 71bps wider respectively while the senior and sub financials indices were 32bps and 58bps wider respectively. Even though they rallied from the morning opening lows, these were the biggest moves wider since 2012 and 2014 respectively for those financial indices.
Unsurprisingly then the lone gains on Friday came from those flight-to-safety assets. Core sovereign bond markets were at the centre of that. 10y Bund yields reached a new record low of -0.051% after dropping over 14bps (intraday low was -0.183%), while 10y Gilt yields fell nearly 30bps and at 1.082% reached an all time record low. 10y Treasuries also struck a low of 1.561% after moving nearly 19bps lower. Meanwhile Gold rallied to the tune of +4.69% with other precious metals also up. That was as good as it got for the commodity complex though with Oil in particular down nearly 5% although in the context of some of the huge swings we’ve seen in the energy complex this year that didn’t seem all that eye-opening.

You’d be forgiven for missing the fact that there was actually some economic data released on Friday, although clearly that was very much second fiddle to events in the UK. In Germany we saw the IFO survey for June come in a little ahead of expectations at 108.7 (vs. 107.4 expected) after rising close to 1pt from May. The expectations component rose 1.4pts to 103.1 (vs. 101.2 expected) although you’d have to imagine that Friday’s result will dampen that next month. Meanwhile in the US the latest durable and capital goods orders data was disappointing. Headline durable goods printed at -2.2% mom in May, weaker than the -0.5% expected. Excluding transportation orders were down -0.3% mom although expectations had been for a +0.1% rise. Core capex orders (-0.7% mom vs. +0.4% expected) were also disappointing. The final release on Friday was the last June revision to the University of Michigan consumer sentiment reading which was taken down to 93.5 from 94.3 in the prior print.

Onto this week’s calendar now. It’s a quiet start to the week today (outside of the obvious EU debate) with the only data due out of the European session being the latest M3 money supply data for the Euro area. Across the pond this afternoon we’ll get the flash June services (expected to rise to 51.9 from 51.3) and composite PMI’s, as well as the advance goods trade balance for May and also the Dallas Fed manufacturing activity index. We start in Europe on Tuesday with the various confidence indicators out of France and Italy, as well as CBI sales data in the UK. The main focus in the US on Tuesday will be the third revision for Q1 GDP (expected to be revised up to +1.0% qoq from +0.8%), while we’ll also get consumer confidence data, the Richmond Fed manufacturing index and finally the S&P/Case-Shiller home price index for April. Turning to Wednesday, we’re kicking off in Asia with consumer sentiment data in China and also retail trade data in Japan. Over in Europe we’ll get the June confidence indicators for the Euro area, while German CPI data in June is also due out. The UK will also release the latest money and credit aggregates numbers. In the US on Wednesday we’ll get the PCE core and deflator prints for May (both expected to rise +0.2% mom), as well as personal income and spending data for the same month and finally the latest pending home sales data. We start in Japan again on Thursday where we’ll get the latest housing starts data along with industrial production data. It’s busy in Europe on Thursday. The Euro area CPI print for June will be released, along with French and Italian CPI, UK Q1 GDP (final revision) and also the June unemployment reading in Germany. We’ll also get the latest ECB minutes on Thursday. US data on Thursday consists of initial jobless claims and the Chicago PMI for June. It’s a busy end to the week in Asia on Friday. In China we’ll get the official manufacturing and non-manufacturing PMI’s for June, while in Japan we get CPI for May, manufacturing PMI and also the Q2 Tankan survey. In Europe on Friday we get the final manufacturing PMI numbers in June, while over in the US we’ll be keeping a close eye on the ISM manufacturing print (little change expected), while construction spending data, manufacturing PMI (final June revision) and vehicle sales data for June rounds things off.

Away from the data there will be plenty of focus on the aforementioned two-day EU leaders summit which kicks off tomorrow. Also worth keeping an eye on is the three-day ECB Forum in Portugal which starts today, with Yellen, Draghi and Zhou scheduled to speak. Elsewhere, over at the Fed we’ll hear from Powell on Wednesday and Bullard on Thursday. We’ll also hear from a number of ECB members at the event in Portugal over the next few days. It’s also worth keeping an eye on the release of the second part of the Fed’s stress test results on Wednesday.

END

 

Markets around the globe Sunday night:

 

Markets open in New Zealand:  GBPound/USA tumbles to 1.35 and the USA/Yen back down to 102.00 Gold not yet open until 4 pm est.

(courtesy zero hedge)

Currency Carnage Continues: Cable, USDJPY Tumble As FX Markets Open

The calm is over. FX marksts are open and Cable is currently down another 170 pips, testing 1.3500 once again. USDJPY is also sliding back below 102.00 as the world awaits China’s reaction with its official peg as offshore Yuan plunged on Friday…

Cable testing towards that 1.34 handle…

And USDJPY back under 102…

Remember, China had shut before all this carnage had happened…

Will PBOC devalue The Yuan fix and escalate global turmoil further?

end NEW YORK  FUTURES:  Sunday night Dow drops another  100 points or it is down 900 points from Pre Brexit. (courtesy zero hedge) Dow Futures Down 900 Points From Pre-Brexit Highs, Plunge Below Friday’s Crash Lows

US equity futures are tumbling at the open following Cable and USDJPY’s dive. Dow futures dropped 100 points (down 900 points from pre-Brexit highs) and broke below Friday’s early crash lows…

From Friday’s 18,025 highs to 17,128 lows… buit the fundamentals?

end Trading in Europe overnight: The pound plummets to new lows; the 10 yr British bond yield slides to under 1% and two British banks are halted;  (Barclays and Royal Bank of Scotland) after crashing.  Deutsche bank also crashed and is trading at its lowest point ever at 12.30 euros. Pound Plummets To New Lows; 10Y Gilts Slide Under 1%; British Banks Halted After Crashing

After a modestly stronger open, which saw sterling rebound to just under 1.35, the British currency has taken another sharp leg lower in recent trading tumbling another 3%, to a low of 1.3224 – taking out Friday’s post-vote lows when the currency plunged over 8% – and dropping to fresh 31 year lows, as it remains under heavy selling pressure as of this moment.

As the following chart shows, with the expetion of just one currency, cable is the worst performing in the world this morning on ongoing Brexit fears.

Today’s 3%+ drop has added to an unprecedented 8.1% tumble on Friday, which was almost double the 4.1% decline on Black Wednesday in 1992, when the U.K. was forced out of Europe’s exchange-rate mechanism.

The flight to safety has meant that gains in U.K. government bonds pushed the 10-year gilt yield below 1% for the first time, while the FTSE 100 slid 1.3%,

And with money rushing into safety, it promptly left the local banks, as a result both Barclays and Royal Bank of Scotland fell more than 10% leading to their stock being halted due to excess volatility.

  • BARCLAYS HALTED IN LONDON ON VOLATILITY AFTER SHRS FALL 11.5%
  • RBS HALTED IN LONDON ON VOLATILITY AFTER SHRS FALL 14.2%

Not helping the local banks was a double-downgrade of Barclays by Jefferies to underperform from buy as its IB operations are too exposed to downside risk on capital and earnings, Jefferies said. The mid-market US bank cut its BARC PT to 115p vs 287p noting that Brexit outcome “changes everything”:

  • Management was already busy with Africa disposal, non-core asset reductions, trying to boost returns, capital ratios
  • Brexit calls Barclays’s IB into question
  • Outlook for lower rates, higher impairments, RWA density put pressure on profit
  • Sees Barclays earnings power “substantially diminished”
  • Sees Barclays 2018 statutory EPS at “miserly” 16.4p

It’s not just these two banks: the entire UK banking sector is down 13% today, after plunging 17% on Friday, meaning in just two days UK banks have lost nearly a third of their market cap.

Meanwhile, traders were on the sidelines, unwilling to commit capital: “People are finding it difficult to comprehend what Brexit implies for the future — we don’t know yet what the magnitude of the shock will be,” said Steven Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. in London. “So far, in terms of sterling-dollar, we’ve seen half the decline we’re likely to see this year.”

“We’ve seen so many developments around Brexit over the weekend since the FTSE closed and things are now looking even more concerning,” Angus Nicholson, Melbourne-based analyst at IG Ltd., said by phone. “It’s hard to have any idea about where fair value for the pound should be when you look at the fact that Scotland and Northern Ireland could no longer be part of the U.K. within the next year or two. ”

Pessimism prevailed: “From here, a 10 percent fall relative to the U.S. dollar seems about right,” Kit Juckes, a London-based strategist at Societe Generale SA, said in a Bloomberg Television interview on Sunday. “The low point will be somewhere between $1.20 and $1.25. However much you want to say the U.K. will survive and calm down, the uncertainty is going to have an economic impact, and the uncertainty is magnified at the beginning by the politics.”

As reported yesterday, while the market urgently needs clarity on whether or when the UK will trigger the Article 50 claus of official separation, for now the UK is taking its time, and that is taking a toll on the market. Britain and the rest of Europe are now feeling their way through the unprecedented situation, with an early sticking point being the timing of the exit negotiations themselves. Cameron, who will address Parliament on Monday, said Friday that the U.K. will wait until a new prime minister is in place before triggering the Brexit process by invoking Article 50 of the Lisbon Treaty. European leaders have called for talks to begin immediately.

As Bloomberg reminds us, while pro-“Leave” politicians sought to minimize the financial turmoil seen on Friday, recent European history has shown how politics can start driving markets, only for the relationship to swiftly reverse. During the euro region’s debt crisis at the start of this decade, investors played the role of vigilantes by dumping sovereign bonds and pushing governments to act.

“There’s a lot of questions that need to be answered right now — the longer this takes the more the pressure is going to be on the pound,” Vasileios Gkionakis, head of currency strategy at UniCredit SpA in London, said in a Bloomberg Television interview on Sunday. “The reaction we saw in the market on Friday was largely the result of speculative activity. What we haven’t really seen is the flow, the reversal of flows coming out of the U.K. When these start unwinding I’m pretty sure that we’re going to see some enormous pressure on the pound.”

A drop below $1.20 is possible, according to Gkionakis.

And while much of this pressure on UK assets may be forced to “assist” the local population with reconsidering its “Leave” vote, the bigger question is when will today’s sharp contagion spread to all of Europe.

Because while the shock facing the UK was expected, keep a close eye on Europe’s other banks, which as we wrote yesterday will be the true tell if the “market breaks” here: recall that according to Citi’s Matt King it is all about the banks…

… and as of this morning Deutsche Bank just hit a new all time low of 12.30, down 6.5% on the day. Needless to say, if DB goes, all of Europe will follow.

end

ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 41.42 POINTS OR 1.45% / /Hang Sang closed DOWN 31.30 OR 0.16%. The Nikkei closed UP 357.19 POINTS OR 2.39% Australia’s all ordinaires  CLOSED UP 0.458% Chinese yuan (ONSHORE) closed DOWN at 6.6508 /Oil FELL to 47.33 dollars per barrel for WTI and 48.10 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6810 yuan to the dollar vs 6.6508 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS AS MASSIVE USA DOLLARS DISAPPEARS FROM CHINESE SHORES

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES b) REPORT ON CHINA

Sunday night:  China devalues the yuan the most in 10 months on the fix

i) onshore yuan  (CNY) 6.6218

ii) offshore yuan (CNH  6.6530)

thus the spread widens and causes huge amounts of USA dollars to leave China.

Then trading began:

CNH: 6.6509

CNY:  6.6810

and then turmoil ruled the day!

iii) Euro/uSA swaps plummets as dollars disappear.

this adds to the turmoil of the pound plummeting.  Late Sunday night, the pound started trading at 1.3361 and ended early morning at 1.3197

(courtesy zero hedge)

China Devalues Yuan Most In 10 Months As Premier Li Warns Of Brexit “Butterfly Effect” On Financial Markets, Economy

In a somewhat shockingly honest admission of the fragaility of the global financial system, Chinese Premier Li warns that a disillusioned British butterfly has flapped its wings and the entire global financial system could collapse. Responding to the plunge in offshore Yuan since the Brexit vote (down 7 handles to 5-month lows over 6.65), PBOC devalued Yuan fix by 0.9% (6 handles) – the most since the August crash – to Dec 2010 lows. Finally, we note USD liquidity pressures buildingas EUR-USD basis swaps plunge.

Offshore Yuan is 3 handles cheap to onshore Yuan and 9 handles cheap to Friday’s fix…

And so PBOC was somewhat forced to devalue yuugely…

  • *CHINA WEAKENS YUAN FIXING BY 0.9%, MOST SINCE AUGUST
  • *PBOC TO INJECT 270B YUAN WITH 7-DAY REVERSE REPOS: TRADER

While Chinese stocks remain ‘stable’ (despite Goldman suggesting more pain is due – regional cost of equity to rise 50-75bps as risk appetite shrinks after Brexit, equal to 5%-10% index decline), the less managed rest of the world is struggling and China knows it…

Premier Li Keqiang said an increase in instability in a particular country or region could trigger the “Butterfly Effect,” which could, in turn, affect the global economic recovery and financial market stability, according to comments posted on Chinese central govt’s website.

All economies highly dependent on each other and no country can manage alone, Li said during meeting with WEF executive chairman Klaus Schwab in Tianjin.

Li called on all nations to enhance coordination and work together to address difficulties.

The shift in the Yuan Fix (red) seemed clear from the collapse in offshore Yuan… CNH > 6.65 (7 handles weaker than pre-Brexit)

Finally, we note that USD liquidity needs are getting very serious as EUR-USD basis swaps surge lower indicating major USD demand…

 

end

EUROPEAN ISSUES

Saturday morning:  Newspaper headlines around England: a country divided!

(courtesy zero hedge)

“See EU Later” – On The Front Covers Of UK Newspapers Today (courtesy zero hedge)

Two days ago, when Britain was set to vote for Brexit, we showed the front pages of the local newspapers which fell into two broad camps and could be summarized as follows: “Project Hope” and “Project Fear.” Project Hope won. And just as we did then, here is a snapshot of the newspaper and tabloid covers the local population will see on its European Independence day.

Neddless to say, the split in public opinion persists and can be best seen in the covers of the ideologically opposed Daily Express and The Mirror.

And the rest

end

Why England left, in pictorial form:

Source Ben Garrison

Choosing not to go down in flames…

Source: The Burning Platform

end

Friday night:  Scotland and Norther Ireland may have BREXIT veto rights.  This will then create such a FX mess that gold will skyrocket! (courtesy zero hedge) Not So Fast: Scotland And Northern Ireland May Have Brexit Veto Rights

Two days after the shocking Brexit result, the nightmares for the Remain camp – which refuses to accept a democratic reality – will not go away. As a result, it has gotten to the farcical point where disgruntled Remain voters have launched a petition demanding a second EU referendum, having clearly forgotten that it was the dramatically low turnout among their ranks that allowed the Leave vote to have such a knockout victory. To be sure this is a well-known technocrat approach: keep voting andrevoting until the desired outcome is finally achieved.

We doubt this particular approach has any hope of success. We also doubt that a call by Labor MP David Lammy, urging for a vote in Parliament to “stop this madness”, the madness in question being the will of the majority, which clearly is not appreciated by a member of a “democratically” elected institution. One can spend all day analyzing the amusing ironies in that statement.

View image on Twitter

David Lammy @DavidLammy

Wake up. We do not have to do this. We can stop this madness through a vote in Parliament. My statement below

11:36 AM – 25 Jun 2016

However, while these are merely desperation antics by a group who will do almost anything to hang on to the benefits presented to them by the status quo, regardless of the will of the majority, a curious observation has emerged courtesy of Jim Fitzpatrick, who points out that according to the 28-page government Command Paper laying out “The Process of withdrawing from the European Union“,which goes through the infamous Article 50 of the Treaty on European Union (TEU), the first time in history when Article 50 will be invoked, there may actually be a hurdle to the actual Brexit process, in the form of a Scottish and Northern Irish veto to Britain’s separation from the EU. To wit:

The role of the devolved legislatures in implementing the withdrawal agreement:

We asked Sir David whether he thought the Scottish Parliament would have to give its consent to measures extinguishing the application of EU law in Scotland. He noted that such measures would entail amendment of section 29 of the Scotland Act 1998, which binds the Scottish Parliament to act in a manner compatible with EU law, and he therefore believed that the Scottish Parliament’s consent would be required. He could envisage certain political advantages being drawn from not giving consent.

We note that the European Communities Act is also entrenched in the devolution settlements of Wales and Northern Ireland. Though we have taken no evidence on this specific point, we have no reason to believe that the requirement for legislative consent for its repeal would not apply to all the devolved nations.

To be sure, this is merely an interpretation and not a legalistic prescription. The basis of this opinion is as follows:

In February 2016, the Government published a Command Paper entitled The process for withdrawing from the European Union, the findings of which have been widely challenged by those campaigning to leave the EU. We wanted to have as clear an understanding as possible of the process whereby the UK would withdraw from the EU, should the electorate so decide on 23 June. We therefore held a public evidence session with two experts in the field of EU law: Sir David Edward KCMG, QC, PC, FRSE, a former Judge of the Court of Justice of the European Union and Professor Emeritus at the School of Law, University of Edinburgh; and Professor Derrick Wyatt QC, Emeritus Professor of Law, Oxford University, and also of Brick Court Chambers.

So is one interpretation of Article 50 on the potential stumbling block behind Brexit sufficient to derail the process? We doubt it: David Cameron has already resigned while Europe has activated the machinery for a British separation (even if it means keeping the UK as an “associated member” as Germany desperately needs the UK market to keep its own economy afloat). Then again, anything is possible and we are certain that thousands of lawyers are working feverishly at this moment to preserve any optionality the Remain group may still have before too much time has passed and enough procedures have been implemented making a return to the status quo impossible.

Further complicating matters is the announcement by Scotland’s first minister Nicola Sturgeon who saidthat a second Scottish independence vote ‘highly likely’ adding that it was “democratically unacceptable” that Scotland faced the prospect of being taken out of the EU against its will. She said the Scottish government would begin preparing legislation to enable another independence vote.

Whatever the outcome, it is certain that the status quo elites, who already lost hundreds of billions in equity “value” as a result of Brexit, will stop at nothing to prevent the existing globalized system from being deconstructed before their very eyes due to the “unexpected” arrival of democratic forces which demand real change. This will surely mean spending egregious amounts trying to find legalistic loopholes, and doing everything in their power to delay and prevent any incremental steps.

All of that is perfectly expected. That said we wonder if the same elitist minorities, which have already shown boundless disdain for the voice of the majority, will keep their interventionism within a peaceful framework because the last thing the world needs is for a tiny majority to start yet another global war to distract from their accelerating loss of influence and power. Then again, just like in the 1930s when the world was also squeezed in a global depression, the only thing that can boost the fortunes of the 1% is war.

Why is why war is the inevitable outcome that a world saddled with gargantuan amounts of debt, borrowed from a future that has no growth prospects, will get. We can only hope that Brexit is not the spark to this outcome.

 

end

 

Saturday morning:  Sure enough Scotland threatens to veto the BREXIT as they want to stay in the Euro.  Thus, it is possible to see Scotland break with England and adopt the Euro and also the reunification of Northern Ireland with the Republican of Ireland.

again gold goes skyrocketing:

(courtesy zero hedge)

Scotland Threatens To Veto Brexit

Yesterday we warned that the biggest threat to the UK political process in the aftermath of the Friday referendum is neither an arguably fake petition to hold another referendum (it won’t happen), nor the so-called buyer’s remorse on the side of “Leave” voters, especially with ComRes confirming a negligible 1% of those voters were “Unhappy” with the outcome…

Britain Elects @britainelects

On the EU referendum result:
Happy: 48%
Unhappy: 43%
Indifferent: 7%
(via ComRes)

Britain Elects @britainelects

Vote split // On the result (Remain / Leave):
Happy: 4% / 92%
Unhappy: 88% / 1%
Indifferent: 7% / 5%
(via ComRes)

5:40 PM – 25 Jun 2016

…but rather a surprising discovery in a UK government Command Paper laying out “The Process of withdrawing from the European Union“, which goes through the process of invoking the infamous Article 50 of the Treaty on European Union, and notes that there may be a rather substantial hurdle to the actual Brexit process: a Scottish and/or Northern Irish veto to Britain’s separation from the EU. To wit:

The role of the devolved legislatures in implementing the withdrawal agreement:

We asked Sir David whether he thought the Scottish Parliament would have to give its consent to measures extinguishing the application of EU law in Scotland. He noted that such measures would entail amendment of section 29 of the Scotland Act 1998, which binds the Scottish Parliament to act in a manner compatible with EU law, and he therefore believed that the Scottish Parliament’s consent would be required. He could envisage certain political advantages being drawn from not giving consent.

We note that the European Communities Act is also entrenched in the devolution settlements of Wales and Northern Ireland. Though we have taken no evidence on this specific point, we have no reason to believe that the requirement for legislative consent for its repeal would not apply to all the devolved nations.

As it turns out, this warning was spot on, because earlier today Scotland’s First Minister Nicola Sturgeon told the BBC that the Scottish Parliament could try to block the UK’s exit from the EU. As a reminder, unlike England where the vote went 52% to 48% in Brexit’s favor, in Scotland the picture was vastly different with 62% backing Remain and 38% wanting to go. And as predicted, the Scottish National Party leader, who went through her own UK independence referendum  two years ago and is now considering yet another referendum, said that “of course” she would ask MSPs to refuse to give their “legislative consent”.

In other words, Scotland’s leader is threatening to break down the very concept of a “Great Britain”, which includes England, Wales and Scotland, and pledge allegiance to the EU, while turning her back on more than half of the English population.

In an interview with the BBC‘s Sunday Politics Scotland program Sturgeon was asked what the Scottish Parliament would do now. Ms Sturgeon, whose party has 63 of the 129 Holyrood seats, said: “The issue you are talking about is would there have to be a legislative consent motion or motions for the legislation that extricates the UK from the European Union?

“Looking at it from a logical perspective, I find it hard to believe that there wouldn’t be that requirement – I suspect that the UK government will take a very different view on that and we’ll have to see where that discussion ends up.” When Sturgeon was asked by presenter Gordon Brewer whether she would consider asking the parliament not to back such a motion of legislative consent she replied “of course”.

She added: “If the Scottish Parliament was judging this on the basis of what’s right for Scotland then the option of saying look we’re not to vote for something that’s against Scotland’s interest, of course that’s got to be on the table.”

* * *

Still, as we also cautioned yesterday, the veto threat may be merely Scotland clutching at straws. Scottish Secretary and Conservative MP David Mundell, who also spoke to the Sunday Politics Scotland program, said: “We have to respect the result on Thursday, even if we don’t like it – it was a UK wide vote – it was a vote by people across the UK.”  Asked about the possibility of Scotland stopping Brexit, he said: “What we need to see is the legal mechanism that we go through to get to a situation of the UK leaving” and then said clearly that “I personally don’t believe the Scottish Parliament is in position to block Brexit, but I haven’t seen the legal documentation that you refer to in your interview with Nicola [Sturgeon].”

* * *

It is unclear what the final legal determination will be on this subject, but if someone Scotland does succeed in scuttling a historic referendum decision by the majority of the UK population, we urge Edinburgh to build a very big and vary tall wall on its southern border (ideally without waiting for Mexico, or the UK, to pay for it).

Meanwhile, as all this takes place, the UK ruling class is in a state of crisis, with both PM Cameron and Chancellor Osborne having disappeared, while the opposition Labour party is undergoing a real time coup attempt, in which as we reported yesterday, party leader Jeremy Corbin has been firing random MPs from the shadow cabinet, in an attempt to foil an ouster. For those eager to follow the drama live, the Telegraph has a good live blog at the following link: “EU referendum Labour crisis: Hilary Benn says Jeremy Corbyn ‘is not a leader’, after he is sacked over post-Brexit coup plot, as six shadow cabinet members quit and more expected to follow

For those still confused, the following tweet by the Telegraph’s Tim Stanley summarizes everything that has transpired in the past few days best:

Tim Stanley @timothy_stanley

Last 48 hrs have shown the public’s doubts in the political class were well founded. PM & chancellor disappear. Labour self destructs.

5:46 AM – 26 Jun 2016 end In Chart form: (courtesy zero hedge) Is Brexit The First Of Many Dominoes? A Few Charts Jun 25, 2016 10:16 PM Courtesy of: Visual Capitalist

Is Brexit the First of Many Dominoes?

Markets have been turned upside down by a surprise Brexit result and the resignation of David Cameron. While there is looming uncertainty around how this will affect the United Kingdom and Europe from an economic perspective, it might be just the tip of the iceberg in terms of long-run consequences.

A Brexit opens the door for future events that would be previously unfathomable by popular opinion, and it gives vital ammunition to groups that are seeking their own referendums for independence.

Unwilling Passengers?

As the UK ship distances itself from European docks, there are two passengers that may have been more comfortable remaining on shore.

While England and Wales voted to “Leave” with 53.4% and 52.5% respectively, Scotland and Northern Ireland were both firmly in “Remain” territory. Scotland, which previously held its own independence referendum in 2014, voted overwhelmingly to have the UK remain in the EU with a 62% vote. Northern Ireland had a similar sentiment with 55.8% voting “Remain”.

Scotland’s First Minister, Nicola Sturgeon, said today that a second independence referendum for Scotland is “highly likely”. She feels Scotland was taken out of the EU against its own will, and that Scottish independence is worth revisiting.

Meanwhile, Northern Ireland has echoed these calls, instead potentially looking at voting on a united Ireland. Northern Ireland is the only country in the UK that shares a land border with a country in the EU.

Others Dominoes

The Brexit result has energized other populist movements across the European Union. Anti-immigration leaders such as Geert Wilders and Marine Le Pen have ratcheted up cries for their own independence votes:

Geert Wilders @geertwilderspvv

Hurrah for the British! Now it is our turn. Time for a Dutch referendum! http://geertwilders.nl/index.php/94-english/1999-pvv-congratulates-british-with-independence-day …

12:31 AM – 24 Jun 2016 Marine Le Pen @MLP_officiel

Victoire de la liberté ! Comme je le demande depuis des années, il faut maintenant le même référendum en France et dans les pays de l’UE MLP

1:13 AM – 24 Jun 2016

However, it is not just people on the fringe that are interested in revisiting EU membership. Even before the Brexit result, a poll by Ipsos Mori showed that the majority of people in France in Italy want to at least have a referendum on leaving:

Meanwhile, over 40% of Swedes, Poles, and Belgians are in the same boat.

Now that Brexit is a thing, will these numbers trend higher? What will be the next domino to fall?

 

end

 

Sunday morning:  UK Labour Party revolt as a 12th shadow cabinet member resigns as Corbyn refuses to step down

(courtesy zero hedge)

UK Labour Party Revolt Continues: 12th Cabinet Member Resigns As Corbyn Refuses To Step Down

Update: Labour leader Jeremy Corbyn has said he will not step down, adding he will not “betray the trust” of those who elected him, according to Sky News.

View image on Twitter

As we detailed earlier…

“Jeremy [Corbyn] is a good and decent man but he’s not a leader. And that’s a problem,”exclaims Senior Labour lawmaker Hilary Benn who was fired after calling on Jeremy Corbyn to quit as party leader. His firing has triggered revolt among Corbyn’s shadow cabinet…

Corbyn, a long-time Euroskeptic who voted against EU membership in 1975, ran a low-key campaign for staying in this time. He didn’t make his first speech on the topic until two months after Cameron announced the referendum, and in his rare media appearances he repeatedly highlighted the EU’s flaws, even while arguing for a “Remain” vote. Swathes of Labour’s traditional heartlands in northern and central England, as well as Wales, voted to leave the bloc.

“There is growing concern in the Shadow Cabinet and the parliamentary party about his leadership,” added Benn, and he appears to be spot on as the 12th cabinet member just resigned

Jeremy Corbyn’s leadership has been plunged deeper into crisis as a string of shadow ministers quit Labour’s top team saying they had no confidence in his ability to win a general election. As AP reports,

Shadow leader of the Commons Chris Bryant became the latest senior figure to announce he could no longer work with Mr Corbyn, declaring: “We need someone new to lead and unite Labour.”

The party’s influential deputy leader Tom Watson is to hold emergency talks with Mr Corbyn on Monday to “discuss the way forward” after eleven members of the shadow cabinet announced they were resigning – with more expected to follow.

In a statement, Mr Watson said he was “saddened” so many colleagues felt unable to carry on and “deeply disappointed” at the sacking overnight of shadow foreign secretary Hilary Benn which triggered the walkout. He said: “My single focus is to hold the Labour Party together in very turbulent times. The nation needs an effective opposition, particularly as the current leadership of the country is so lamentable. “It’s very clear to me that we are heading for an early general election and the Labour Party must be ready to form a government. There’s much work to do. I will be meeting Jeremy Corbyn tomorrow morning to discuss the way forward.” A source close to shadow business secretary Angela Eagle, who has not resigned, said: “She is heartbroken about the position in which the party finds itself and desperately worried we’re failing to connect with communities across the country.”

However, as Bloomberg reports, Corbyn may survive a Labour leadership challenge thanks to his popularity with the party membership, but he has lost authority among many of its lawmakers.Those pushing for him to go fear that whoever replaces Cameron will call a snap election, at which Labour will need a clear position on its attitude to the European Union and a leader who looks like a potential prime minister.

In a letter to Labour MPs, veteran backbencher Dame Margaret Hodge who tabled the no confidence motion warned they were facing a disaster at the polls if they failed to act. “If a general election is called later this year, which is a very real prospect, we believe that under Jeremy’s leadership we could be looking at political oblivion,she wrote. Mr Murray told the BBC: “I think Jeremy Corbyn has to look at himself seriously in the mirror and see if he sees himself walking down Downing Street as being prime minister, whether or not there’s a general election in six months, or in May 2020. “I think he’s going to find it very difficult to answer yes to those questions – regrettably. He’s a decent human being, a lovely man who I got on incredibly well with, but he just can’t lead the Labour Party and I don’t think the public think he could be prime minister.”

end

Sunday morning: Adding to the confusion,  the EU, as sore losers are telling England to hurry up with article 50 and abandon the European union.  Yet Germany correctly states that there is no need to rush. Why? Germany has always been the net benefactor  of the union; (courtesy zero hedge) More Confusion: EU Tells Cameron To Hurry Up With Article 50 As Merkel Says No Need To Rush

While the political chaos slamming the UK over the weekend, will be its own chapter in the history books one day, with UK’s dynamic leadership duo of Cameron and Osborne suddenly nowhere to be seen while the Labour party is undergoing a rebellion even as Boris Johnson has yet to make a concerted push to claim the victory the British people unexpectedly handed him, things in Europe are no better. Case in point, Europe’s collective (or rather not so much) on the next major catalyst in the UK’s exit from the Eurozone, which as we explained previously, is the moment Article 50 is triggered, widely expected to take place some time over the next several months if not much sooner.

According to Reuters, the EU is allegedly interested in a quick and clean divorce, reporting that Britain need not send a formal letter to the European Union to trigger a two-year countdown to its exit from the bloc, EU officials said, implying British Prime Minister David Cameron could start the process when he speaks at a summit on Tuesday.

The potential delay in the triggering of Article 50 has been interpreted by some as a case of Buyer’s (or perhaps seller’s) remorse, going so far as to suggest that a Boris Johnson cabinet may never invoke it at all, and instead opt to remain in the EU, openly defying the will of the majority.

“‘Triggering’ … could either be a letter to the president of the European Council or an official statement at a meeting of the European Council duly noted in the official records of the meeting,” a spokesman for the council of EU leaders said.

Why does the EU want a quick response? According to a second EU official cited by Reuters, who noted the mounting frustration among leaders with the British prime minister’s delay in delivering the formal notification required to launch divorce proceedings, “It doesn’t have to be written. He can just say it.” Cameron will brief the other 27 national leaders over dinner at a European Council summit in Brussels on Tuesday on the outcome of Thursday’s referendum at which Britons voted to leave the EU, prompting him to announce he will resign.

On Friday, he said he would leave it to his successor as Conservative party leader and premier to trigger Article 50 of the EU treaty, which sets out a two-year process to quit the bloc. That appeared to be a reversal of a pledge to launch the process immediately after the vote. It has angered EU leaders who want a quick settlement to limit uncertainty. It has also prompted some above mentioned experts to speculate that it is Boris Johnson who is delaying the exit when in reality the balls is, and will remain for a while, in David Cameron’s hands.

What makes things complicated is that some Brexit campaigners have long said that Britain should aim to negotiate a comprehensive new relationship with the EU, seeking access to markets without submitting to EU rules or open migration, before binding itself into the two-year timetable that would be fixed for talks if Article 50 is triggered. Such talk worries EU officials and leaders who fear that a prolonged haggling with London will further increase the risk of a domino effect of nationalist-led demands for exit from other states. They do not see a legal way to force Britain to start the process but have piled political pressure on Cameron to honor his pledge to launch Article 50 negotiations and respect the popular vote.

The chief executive of Britain’s “Vote Leave” campaign called for informal talks before London notifies the EU it wants to leave under the Lisbon Treaty, which provides for two years of divorce proceedings.But German Foreign Minister Frank-Walter Steinmeier, a member of Merkel’s Social Democrat coalition partners, showed a greater sense of urgency.

“This process should get under way as soon as possible so that we are not left in limbo but rather can concentrate on the future of Europe,” he said after hosting a meeting with his colleagues from the other five founding members of the EU – France, Italy, the Netherlands, Belgium and Luxembourg.

Putting the heat back on Cameron, Reuters adds that the Council spokesman made clear that leaders cannot simply choose to interpret something Cameron says as the trigger without the prime minister saying clearly he means it to be.

“The notification of Article 50 is a formal act and has to be done by the British government to the European Council,” the spokesman said. “It has to be done in an unequivocal manner with the explicit intent to trigger Article 50. Negotiations of leaving and the future relationship can only begin after such a formal notification. If it is indeed the intention of the British government to leave the EU, it is therefore in its interest to notify as soon as possible.”

To be sure, all would be well – all things considered – if Europe could at least present a united front in its treatment of Brexit and Article 50, however even that appears impossible, because elsewhere Reuters writes that German Chancellor Angela Merkel sought to temper pressure from Paris, Brussels and her own government to force Britain into negotiating a quick divorce from the EU, despite warnings that hesitation will let populism take hold.

Almost alone in continental Europe, Merkel tried to slow the rush to get Britain out of the EU door. Europe’s most powerful leader made clear she would not press Cameron after he indicated Britain would not seek formal exit negotiations until October at least.”

Quite honestly, it should not take ages, that is true, but I would not fight now for a short time frame,” Merkel told a news conference.  “The negotiations must take place in a businesslike, good climate,” she said. “Britain will remain a close partner, with which we are linked economically.”

The issue is that with the strongest person in the EU suddenly backtracking on the urgency, it will likely only inflame even more tensions in Europe, where virtually everyone else demands a quick separation. Ironically, Merkel’s position may even help the Euroskeptic camp around Europe.

Eurosceptics in other member states applauded Britons’ decision to leave the European Union in a referendum that sent shockwaves around the world, with far-right demands for a similar vote in Slovakia underlining the risk of a domino effect.

This has promptly led to concerns among Europe’s core: French Foreign Minister Jean-Marc Ayrault warned of the dangers of delay. “We have to give a new sense to Europe, otherwise populism will fill the gap,” he said. They followed European Commission President Jean-Claude Juncker, who said on Friday it made no sense to wait until October to negotiate the terms of a “Brexit”.

European Council President Donald Tusk made a start by appointing Belgian diplomat Didier Seeuws to coordinate negotiations with Britain. Britain’s representative on the EU executive, Financial Services Commissioner Jonathan Hill, resigned on Saturday after campaigning against a British exit.

At the same time, the pressure on the UK is rising: after the referendum decision and Cameron’s resignation, European politicians and institutions felt free to shower demands on Britain over its future outside the world’s largest trading bloc. The European Central Bank said Britain’s financial industry, which employs 2.2 million people, would lose the right to serve clients in the EU unless the country signed up to its single market – anathema to “Leave” campaigners, who are set to lead the next government in London.

But it is not just the splintering of the EU that has grabbed everyone’s attention: as reported earlier, the United Kingdom itself could also now break apart as a result of Scottish First Minister Nicola Sturgeon’s threat that her government was preparing to present legislation allowing a second independence referendum while continuing discussions on its place within the EU. She also warned that her government may veto the Brexit decision.

Amid all this confusion, one thing is clear: with countless variables suddenly emerging and even more path permutations forward, nobody has any clue how any of this will play out, which likely means another bout of global risk off now that the markets have had a chance to catch up to the new post-Brexit reality, which in turn will force even more central bank intervention, just as the Central Bank’s Central Bank, the Bank of International Settlement, warns in its 86th annual review, that “easy-money policies and unprecedented monetary stimulus have started to backfire in global financial markets.”

In short: everyone is praying that someone, somewhere will be successful in kicking the can for at least a few more days/weeks/months.

 

end The world’s 400 richest people lose 127 billion from the BREXIT vote: (courtesy zero hedge) The Real Brexit “Catastrophe”: World’s 400 Richest People Lose $127 Billion

For all the scaremongering and threats of an imminent financial apocalypse should Brexit win, including dire forecasts from the likes of George Soros, the Bank of England, David Cameron (who even invoked war), and even Jacob Rothschild, something “unexpected” happened yesterday: the UK was the best performing European market following the Brexit outcome.

This outcome was just as we expected three days ago for reasons that we penned in “Is Soros Wrong“, where we said “in a world in which central banks rush to devalue their currency at any means necessary just to gain a modest competitive advantage in global trade wars, a GBP collapse is precisely what the BOE should want, if it means kickstarting the UK economy.”

On Friday, the market started to price it in too, and in the process revealed that the biggest sovereign losers from Brexit will not be the UK but Europe.

Not only, though. Because as we noted yesterday in “Who Are The Biggest Losers From Brexit?”, there is an even bigger loser than the EU: Britain and Europe’s wealthiest people.

Britain’s 15 wealthiest citizens had $5.5 billion erased from their collective fortune Friday after the country voted to leave the European Union. Britain’s richest person, Gerald Grosvenor, led the decline with a loss of $1 billion, according to the Bloomberg Billionaires Index. He was followed by Topshop owner Philip Green, fellow land baron Charles Cadogan and Bruno Schroder, majority shareholder of money manager Schroders Plc.

It wasn’t just Britain: as Bloomberg added overnight, the world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2 percent of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index. The biggest decline belonged to Europe’s richest person, Amancio Ortega, who lost more than $6 billion, while nine others dropped more than $1 billion, including Bill Gates, Jeff Bezos and Gerald Cavendish Grosvenor, the wealthiest person in the U.K.

Ironically, it turns out that when George Soros threatened “The Brexit crash will make all of you poorer – be warned“, what he really meant is “it will make me poorer.” And yes, George, the people were warned which is why they voted the way they did.

 

END

Pro Government newspaper Akit gloats over the fact that the “crusader union is falling apart”. If the EU supports Turkey’s admission into the EU then votes for an exit from each country would prevail. Then Turkey will unleash allof those migrants onto European shores.

a real mess…

(courtesy zero hedge)

Turkey Gloats: “The Crusader Union Falls Apart”

Earlier today, we showed the front pages of British newspapers on the first day after the historic Brexit referendum. Just as amusing front pages, however,  abound in Turkey and especially among the pro-government (and thus government-controlled) press, such as the Akit newspaper, which looks at the chaos in the UK and says “the Crusader Union falls apart” (somewhat ironic for the former Ottoman Empire).

As a reminder, many have noted that the Brexit referendum was not about economic issues as much as about immigration, and not one country received more attention than Turkey, whose EU-membership may have been the key variable that sealed the outcome of the referendum vote. Recall that while David Cameron was assuring voters that “Turkey would not join the EU until the year 3,000”, it turned out to be a lie when it was revealed that Europe was actually holding Turkish accession talks as soon on June 30.

For now Turkey may have won the battle…

View image on Twitter

Follow IrmakYenisehirlioglu @Irmak_Ye

Headline in  pro-gov’t daily on : “Crusader union falls apart.”

7:38 AM – 25 Jun 2016

… But it has almost certainly lost the war, as every other European nation will now be terrified of a similar popular uprising and referendum outcome should other countries support Turkey’s EU membership.

Which, of course, is the worst possible news for Angela Merkel, because if and when Erdogan realizes that his latest hope to become part of Europe has again been dashed, he will have no problem with unleashing the millions of Syrian refugees currently held back by Turkish borders, and send them right inside Germany, leading to Europe’s next migrant crisis – likely in the last months of 2016 – which in turn will lead to the full suspension Europe’s customs union, and yet another nail in the coffin of the European “union.”

 

END

 

And now onto Spain’s election Sunday night:

However actual results were a little better for the PP party.  The actual results are similar to the voting in December and thus the election was futile

(courtesy zero hedge)

In Latest Shock To Status Quo, Spanish Left-Wing Parties Set To Win Parliamentary Majority

While the world is focused on the aftermath of the Brexit vote, another surprise to the European status quo was just served thanks to Spain’s parliamentary elections, where according to the just released exit polls...

View image on Twitter

The Spain Report @thespainreport

LATEST: Table comparing two exit polls with actual result from December:https://www.thespainreport.com/articles/780-160626195143-spain-exit-poll-shows-podemos-overtaking-psoe …

2:06 PM – 26 Jun 2016

… the country’s two main progressive parties, the 137-year-old Socialists and the anti-establishment group Podemos, most likely have won a majority of seats in parliament according to early exit polls.

Podemos won 91 to 95 seats compared with 71 at the last vote in December while the Socialists won 81 to 85 seats compared with 90, according to the poll by Sigma Dos published by the state broadcaster. Parties need 176 lawmakers for a majority in the 350-seat chamber. Caretaker Prime Minister Mariano Rajoy’s People’s Party won the most seats with 117 to 121, though the second- and third-placed groups have both ruled out supporting him. The liberals of Ciudadanos fell to 26 to 30 seats compared with 40 last time.

The election is perhaps most notable for the latest confirmation of total apathy: while 37 million people are eligible to participate, barely half of them had voted by 6 p.m. in Madrid, the lowest turnout on record.

As a reminder, this is the second election following a previous one in December when the result was deadlocked, preventing any single party or alliance from claiming a majority.  Opinion polls had suggested the parliament that emerges this time will be just as fragmented as the previous one. Four big parties and six smaller regional ones are likely to win seats in the 350-strong assembly, none of them coming close to a majority.

The center-right People’s Party (PP) looks set to be the biggest party again, with around 120 seats. But its natural coalition partner, the liberal Ciudadanos (“Citizens”), appears likely to win only 30 seats or less, far worse than polls had expected, leaving them well short of the 176 needed for a majority.

In theory, the rise of Unidos Podemos (“Together We Can”), a leftist alliance led by Podemos, could offer a way out. The 90+ seats it is expected to win, combined with around 80 for the Socialist Party (PSOE), would be close to a majority. Support from some of the regional parties could enable them to form a government.

That said, it all depends on the socialists: analysts believe that the 137-year-old Socialist Party would prefer to form a ‘grand coalition’ with the PP, led by the acting prime minister, Mariano Rajoy, or give passive support to a minority PP government, rather than combine with a group that threatens their existence, according to Reuters.

“This is a crucial time for the left. Our time has come. We have an opportunity for change,” said Carlos Martinez, a retired administrative clerk who cast his ballot for Unidos Podemos in the Arganzuela neighborhood, in the south of Madrid. However, the 77-year-old, who voted in December for the former communists of United Left, now part of Unidos Podemos, said the anti-austerity alliance might find it hard to govern because other parties may coalesce to block it.

Ironically, such a scenario would have echoes of Greece, where a long-established center-left party, PASOK, joined a conservative-led government in 2012, only to find itself subsequently humiliated by the rise to power of the far-left Syriza party — which is close to Podemos.

It is not clear what impact the result of the British referendum will have on the Spanish election.

One thing for now appears clear: there is little risk of Spexit, at least in the immediate future. Iglesias, whose core support comes from well-educated young people shut out of the labor market, said the Brexit vote was a sign of the profound reform the EU needs. “Nobody would leave a fair and united Europe,” he said. “We have to change Europe.

Good luck.

 

end

 

And now closing from trading in Europe:  Bank stocks collapse; Deutsche bank trading at its all time lows/Italian banks close down 20-25%; Euro/dollar swaps collapse signifying huge demand for scarce USA dollars as derivatives blow up; UK default risk rises to 3 year highs

 

(courtesy zero hedge)

“It’s a F##king Bloodbath” – European Banking Stocks Collapse As UK Default Risk Spikes

Traders are frantic this morning as George Osborne’s calming words have done nothing to halt the carnage.From Italian bankscrashing over 25% to British banks being halted, trading at record lows, to Deutsche Bank extending its Lehman-esque trend, as one veteran stock market trader in London said, “it’s a f##king bloodbath, not even Draghi can save this one.” The contagion is spreading however as UK default risk has spiked to 3 year highs and USD liquidity needs are surging with funding markets seeing serious distress.

It’s everywhere…European Bank Stocks are down 23% in the last 2 days…

Italian Banks down 20-25%

British Banks bloodbathing….

Deutsche and CS are collapsing…

As a Lehman moment looms…

With Default risk soaring…

As funding markets enter serious distress….

But apart from that – it must be a great time to buy?

 

end

 

 And now on the close with respect to European banks: European Banks Crash To Worst 2-Day Loss Ever As Default Risk Soars

So much for George “Panic-Monger” Osborne’s calming statement this morning, European banks have collapsed this morning to close down between 20% and 30% since the Brexity vote. The last 2 days plunge in EU banks (down 23%) is the largest in history (double the size of Lehman) and pushes European bank equity market cap to its lowest (in USD terms) ever.

Worst.Ever…

UK and European banks have collapsed…

And bank risk is soaring…

As EU bank market cap (in USD) hita record low…

Charts: Bloomberg

 

end

 

At the end of the day, S and P downgrades Great Britain

(courtesy S and P /zero hedge)

 

S&P Downgrades UK From AAA To AA Due To Brexit: Full Text

That didn’t take too long: just as the rating agencies warned as part of the scaremongering campaing, the downgrades of the UK have begun. None of this is surprising: now that both S&P and Moodys are also policy tools of the “establishment”, demonstrated so vividly in the downgrade and upgrade games involving Greece and most recently Poland, this is merely another attempt to push the UK citizens to undo last week’s historic referendum.

Here is how you know S&P has gotten orders from up top to unleash the heavy artillery: “Brexit could also, over time, diminish sterling’s role as a global reserve  currency.”

Odd, that language was missing in 2011 when S&P downgraded the US.

In any case, considering 10Y Gilts are trading at a record low 0.93% knowing full well this downgrade was imminent, it is quite clear just how much “credibility” with the market rating agencies still have.

* * *

From S&P

Ratings On The United Kingdom Lowered To ‘AA’ On Brexit Vote; Outlook Remains Negative On Continued Uncertainty

OVERVIEW

  • In the nationwide referendum on the U.K.’s membership of the European Union (EU), the majority of the electorate voted to leave the EU. In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the U.K. We have reassessed our view of the U.K.’s institutional assessment and now no longer consider it a strength in our assessment of the rating.
  • The downgrade also reflects the risks of a marked deterioration of external financing conditions in light of the U.K.’s extremely elevated level of gross external financing requirements.
  • The vote for “remain” in Scotland and Northern Ireland also creates wider constitutional issues for the country as a whole.
  • Consequently, we are lowering our long-term sovereign credit ratings on the U.K. by two notches to ‘AA’ from ‘AAA’.
  • The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the U.K. if there is another referendum on Scottish independence.

 

RATING ACTION

On June 27, 2016, S&P Global Ratings lowered its unsolicited long-term foreign and local currency sovereign credit ratings on the United Kingdom to ‘AA’ from ‘AAA’. The outlook on the long-term rating is negative. We affirmed the  unsolicited short-term foreign and local currency sovereign credit ratings on  the U.K. at ‘A-1+’.

We also lowered to ‘AA’ from ‘AAA’ our long-term issuer credit rating on the  Bank of England (BoE) and the ratings on the debt programs of Network Rail  Infrastructure Finance PLC. We affirmed the short-term ratings on the BoE and  Network Rail Infrastructure Finance debt programs at ‘A-1+’. The outlook on the long-term rating on the BoE is negative.

As a “sovereign rating” (as defined in EU CRA Regulation 1060/2009 “EU CRA Regulation”), the ratings on the United Kingdom, are subject to certain publication restrictions set out in Art 8a of the EU CRA Regulation, includingpublication in accordance with a pre-established calendar (see “Calendar Of 2016 EMEA Sovereign, Regional, And Local GovernmentRating Publication Dates,” published Dec. 22, 2015, on RatingsDirect). Under the EU CRA Regulation, deviations from the announced calendar are allowed only in limited circumstances and must be accompanied by a detailed explanation of the reasonsfor the deviation. In this case, the reason for the deviation is the U.K.’s referendum vote to leave the EU. The next scheduled rating publication on United Kingdom will be on Oct. 28, 2016.

RATIONALE

The downgrade reflects our view that the “leave” result in the U.K.’s referendum on the country’s EU membership (“Brexit”) will weaken the predictability, stability, and effectiveness of policymaking in the U.K. and affect its economy, GDP growth, and fiscal and external balances. We have revised our view of the U.K.’s institutional assessment and we no longer consider it to be a strength in our assessment of the U.K.’s key rating factors. The downgrade also reflects what we consider enhanced risks of a marked deterioration of external financing conditions in light of the U.K.’s extremely elevated level of gross external financing requirements (as a share of current account receipts and usable reserves). The Brexit result could lead to a deterioration of the U.K.’s economic performance, including its large financial services sector, which is a major contributor to employment and  public receipts. The result could also trigger a constitutional crisis if it  leads to a second referendum on Scottish independence from the U.K.

We believe that the lack of clarity on these key issues will hurt confidence, investment, GDP growth, and public finances in the U.K., and put at risk  important external financing sources vital to the financing of the U.K.’s  large current account deficits (in absolute terms, the second-largest globally behind the U.S.). This includes the wholesale financing of the U.K.’s commercial banks, about half of which is denominated in foreign currency.

Brexit could also, over time, diminish sterling’s role as a global reserve  currency. Uncertainty surrounding possibly long-lasting negotiations around  what form the U.K.’s new relationship with the EU will look like will also pose risks, possibly leading to delays on capital expenditure in an economy  that already stands out for its low investment/GDP ratio.

Detailed negotiations are set to begin, with a great deal of uncertainty around what shape the U.K.’s exit will take and when Article 50 of the Lisbon  Treaty will be triggered. While two years may suffice to negotiate a departure from the EU, it could in our view take much longer to negotiate a successor  treaty that will have to be approved by all 27 national parliaments and the European parliament and could face referendums in one or more member states. While some believe the U.K. government can arrive at a beneficial arrangement with the EU, others take the view that the remaining EU members will have no incentive to accommodate the U.K. so as to deter other potential departures and contain the rise of their own national eurosceptic movements.

In particular, it is not clear if the EU–the destination of 44% of the U.K.’s exports–will permit the U.K. access to the EU’s common market on existing  (tariff-free) terms, or impose tariffs on U.K. products. Future arrangements  regarding the export of services, including by the U.K.’s important financial  services industry, are even more uncertain, in our view. Given that high immigration was a major motivating issue for Brexit voters, it is also  uncertain whether the U.K. would agree to a trade deal that requires the country to accept the free movement of labor from the EU. The negotiation process is therefore fraught with potential challenges and vetoes, making the outcome unpredictable.

We take the view that the deep divisions both within the ruling Conservative Party and society as a whole over the European question may not heal quickly and may hamper government stability and complicate policymaking on economic and other matters. In addition, we believe that Brexit makes it likely that the Scottish National Party will demand another referendum on Scottish independence as the Scottish population was overwhelmingly in favor of remaining within the EU. This would have consequences for the constitutional and economic integrity of the U.K. There may be also be similar constitutional issues around Northern Ireland.

These multiple and significant challenges will likely be very demanding and we expect them to take precedence over macroeconomic goals, such as maintaining growth, consolidating public finances, and the importance of finding a solution to worsening supply bottlenecks in the U.K. economy. Lack of clarity while negotiations ensue will also significantly deter private investment.

The U.K. benefits from its flexible open economy and, in our view, prospered as an EU member. We believe that the U.K. economy was able to attract higher inflows of low-cost capital and skilled labor than it would have without the preferential access that EU membership delivers. We consider that significant net immigration into the U.K. over the past decade helped its economic performance. EU membership also helped enhance London’s position as a global financial center.

We believe that the U.K.’s EU membership, alongside London’s importance as a global financial center, bolstered sterling as a reserve currency. When we assess the U.K.’s external picture, we incorporate our view that the U.K. benefits from its reserve currency status. This leads us to make a supportive external assessment, despite the U.K.’s very large external position in terms of external liabilities and external debt, on both a net and gross basis. Under our methodology, were sterling’s share of allocated global central bank foreign currency reserve holdings to decline below 3%, we would no longer classify it as a reserve currency, and this would negatively affect our external assessment. Sterling’s share was 4.9% in the fourth quarter of 2015, according to International Monetary Fund data.

Furthermore, since having joined the European Community 43 years ago, the U.K. has attracted substantial foreign direct investment (FDI), which has helped to solidify its role as a global financial center. High FDI inflows increased the capital stock in an economy that is notable for its low investment levels; FDI was an estimated 18% of GDP in 2015. This underscores the high importance of FDI inflows for the growth prospects of the U.K. economy.

About two-thirds of all FDI into the U.K. represents investment in the financial services sector. Most investment into the financial services sector is channeled into London. The U.K. financial system, measured by total assets, stands at about 4.5x GDP and foreign banks make up about half of U.K. banking assets on a residency basis. Foreign branches account for about 30% of total U.K. resident banking assets. Brexit could lead financial firms, especially foreign ones, to favor other destinations when making investment decisions.

Net FDI is also a major source of financing for the U.K.’s current account deficit, which has persisted without interruption since 1984. The current account deficit exceeded 5% of GDP in both 2014 and 2015. We believe the “leave” vote will put pressure on sterling and could improve net exports, in particular by weakening imports as growth decelerates, leading to a faster narrowing of the current account than if the U.K. had stayed in the EU. For this reason, we forecast the current account deficit to average 3.4% in 2016-2019 compared to our April forecast of 4.5%, though we would add that past episodes of sterling weakness largely did not necessarily improve the U.K.’s merchandise deficit, which last year was 6.7% of GDP. The U.K.’s services sector ran a net surplus of almost 5% of GDP last year, but to the extent that financial services may face more difficult access to EU markets (subject to the outcome of negotiations with the EU), that position may also worsen.

Nevertheless, we see the U.K.’s high external deficits as a vulnerability, and we view an EU departure as a risk to financing sources. The U.K.’s gross external financing needs (as a share of current account receipts and usable official foreign exchange reserves) is the highest among all 131 sovereigns rated by S&P Global Ratings. At over 800%, this ratio stands at over twice the level of the G7 runners-up (U.S. and France are under 320%).

The U.K. economy had been recovering robustly since 2007. Over the past two years, it has grown faster than any economy in the G7, and faster than almost all the large European economies, including Germany. However, given the uncertainty and fall in investment tied to the “leave” vote, we are forecasting a significant slowdown in 2016-2019, with GDP growth averaging 1.1% per year (compared to our April forecast of 2.1% per year). A fall in investment will affect growth, job creation, private sector wage growth, and consumer spending.

At 84% of GDP (2016 estimate), the U.K.’s net general government debt ratio remains high. Since the 2008 financial shock, fiscal consolidation has been substantial–primarily in the form of cuts to general government expenditure. Fiscal consolidation will become harder to achieve given the slower growth, as well as in the face of rising risks of discretionary fiscal easing to arrest the economic slowdown. In our opinion, the decision to leave the EU raises further the fiscal challenges of meeting already ambitious targets, as weaker consumption and investment, possibly via a correction in the U.K.’s highly valued housing market, would take a toll on tax receipts. Over the medium term, a reduction in employment and earnings in the financial services sector could further undermine public finances. Since Brexit, plans to start the sale of shares in government-owned banks may have to be postponed owing to economic uncertainty.

We view the U.K.’s monetary and exchange rate flexibility as a key credit strength. During the financial crisis, it enabled wages and prices to adjust rapidly, relative to trading partners, we expect it to provide as rapid an adjustment again. Exchange rate adjustments can help to broadly maintain competitiveness. The U.K. authorities have drawn on the flexibility afforded by its reserve currency, and this has benefited GDP growth and public debt sustainability, in our view. As mentioned earlier, if the U.K. were to lose its reserve currency status, we would view this as a significant negative.

Despite the uncertainty around Brexit, we believe that the U.K. will continue to benefit from its large, diversified, and open economy, which exhibits high labor- and product-market flexibility, and enjoys credible monetary policy. Additionally, the U.K. benefits from deep capital markets and a globally competitive financial sector.

WEBCAST DETAILS

S&P Global Ratings will hold a webcast on Tuesday June 28, 2016, at 2:00 p.m. GMT / 9:00 a.m. EST, during which senior analysts will discuss the impact of the referendum vote.

You can register for this webcast by clicking on the link below:http://event.on24.com/wcc/r/1217054/50797011DA9088CFBDE74625D73D9253

OUTLOOK

The negative outlook reflects the multiple risks emanating from the decision to leave the EU, exacerbated by what we consider to be reduced capacity to respond to those risks given what we view as the U.K.’s weaker institutional capacity for effective, predictable, and stable policymaking.

We could lower the rating should we conclude that sterling will lose its status as a leading world reserve currency; that public finances will deteriorate; or that GDP per capita will weaken markedly beyond our current expectations (see “GDP Per Capita Thresholds For Sovereign Rating Criteria,” published on Dec. 21, 2015). In addition, we could lower the rating if another referendum on Scottish independence takes place, or other significant constitutional issues arise and create further institutional, financial, and economic uncertainty.

We would revise the outlook to stable if none of the aforementioned negative developments occur.

 

end

GLOBAL ISSUES

GLOBAL MARKETS:

The JPMorgan Quant specialists now target a huge 5o to 10% downdraft in markets :a total of up to 300 billion form all program selling; and a 5- 10% selling in the S and P.  The speed of this downdraft will put many of our derivative players completely offside.  We must watch Deutsche bank to seek if smoke is billowing from its chimney:

(courtesy JPMorgan/Quant specialists/zero hedge)

JPM Head Quant: Expect Up To $300 Billion In Program Selling, “5-10% Near-Term Downside To The S&P500”

On Friday, when we described the assessment of UBS derivative strategist Rebecca Cheong, who anticipates as much as $150 billion in program and systematic strategy selling in the next 2-3 days, we wondered if the Friday silence from JPM’s quant guru meant he was willing to hand over the baton of the market’s most prominent prognosticator of quant moves to others. The answer was no, because shortly thereafter Kolanovic chimed in with a note just after the US close, in which he agreed with Cheong and said that the program selling was about to begin, to wit:

As we noted earlier this week, we expected a Brexit outcome to have an asymmetric impact for equities, with downside exacerbated by unwind of long equity investor positioning. In particular, increasing equity volatility would induce systematic strategies (Volatility Targeting, Risk Parity, CTAs) to start deleveraging their high equity exposure, resulting in $100-300 billion of selling.

The reason is simple: few were prepared for a Brexit outcome and “going into this event, long/short equity and macro hedge funds had higher equity exposure than average, while mutual fund cash balances have remained low and retail investor equity exposure were close to 2007 highs.”

Kolanovic adds that “this comes at a time of a weak fundamental backdrop, where corporate earnings are expected to contract for a fourth consecutive quarter (3Q15 to 2Q16E).”

Specifically, regarding the impact of Brexit on fundamentals, Kolanovic believes it will be contained: “Direct impact of Brexit to US corporate profitability will likely be contained, with S&P 500 revenue exposure at ~1% to UK and 6-7% to Europe.”

That’s the good news. Here’s the not so good:

The bigger unknowns, however, are the second order effects, which could manifest themselves through various potential channels. Geopolitical uncertainty around trade and regulatory framework is a risk as it could spill over into business sentiment. Financial contagion could materialize if the banking sector continues to see significant weakness and spread into Eurozone periphery, even though leverage in the system may not be high. In any case, higher volatility from these uncertainties may in itself be enough to induce investors to deleverage and reduce their high equity exposure. While these risks are potential catalysts for a market correction in the short term, it is reasonable to expect these would not precipitate a global recession as central banks globally are expected to intervene and provide liquidity and staunch contagion from spreading. In fact, the Fed noted this morning that it is prepared to offer dollar liquidity through existing swap lines, and the market is expecting a significantly more dovish US rate outlook with no hikes priced in for two years.

Finally, his conclusion: “We see another 5-10% downside to the S&P 500 in the short term as likely, but we maintain our 2016 year-end price target at 2,000.

end RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey apologizes to Putin over the death of that Russian Pilot shot down.  They now call Russia a friend.  They also restore ties with Israel and that now opens up the Russian gas pipeline through Turkey and Israel and then onto Europe through Greece:

(courtesy zero hedge)

Erdogan Apologizes To Putin Over Death Of Russian Pilot, Calls Russia “Friend”, Restores Ties With Israel Jun 27, 2016 9:55

In two stunning geopolitical developments over the past 24 hours, Turkey – which is finding itself increasingly snubbed by not only Europe but also the US – has pivoted dramatically and shortly after restoring full deplomatic ties with another country that has recently seen the cold shoulder from the Obama administration, namely Israel,moments ago apologized to Russia for last year’s downing of a Russian jet which allegedly crossed above its territory as part of the Russian campaign against ISIS.

As RT reports, Vladimir Putin has received a letter in which Turkish President Recep Tayyip Erdogan apologized for the death of the Russian pilot who was killed when a Russian jet was downed over the Syrian-Turkish border last November, the Kremlin said. Erdogan expressed readiness to restore relations with Moscow, Kremlin spokesman Dmitry Peskov said on Monday.

Putin and Erdogan, stock photo.

“The head of the Turkish state expressed his deep sympathy and condolences to the relatives of the deceased Russian pilot and said ‘sorry,’” Peskov said.

In his letter, Erdogan called Russia “a friend and a strategic partner” of Ankara, with whom the Turkish authorities would not want to spoil relations.

“We never had a desire or a deliberate intention to down an aircraft belonging to Russia,” the letter read, according to a statement published on the Kremlin website. According to the statement, Erdogan’s letter stressed that “the Turkish side undertook all the risks and made a great effort to recover the body of the Russian pilot from the Syrian opposition, bringing it to Turkey. The organization of the pre-burial procedures was conducted in accordance with all religious and military procedures.”

Erdogan said that Turkey “shares the pain of downed Su-24 pilot’s death with his family” and “sees it as Turkey’s pain”, according to Peskov. Ankara said it treated the family of the dead Russian pilot as if it were a Turkish family and is “ready for any initiatives to relieve the pain and severity of the damage done,” the letter said.

The address by the Turkish leader also informed that a criminal investigation has been launched against the person suspected of killing the Russian pilot, Alparslan Celik, the Kremlin said. In addition, Erdogan expressed readiness to tackle security challenges in the region and fight terrorism together with Moscow, it added.

This takes place just hours after Turkey and Israel agreed to restore full diplomatic ties after more than six years of animosity, clearing the way for renewed cooperation between the U.S. allies and an easing of Israel’s blockade of the Hamas-ruled Gaza Strip. As the WSJ reported overnight, officials from both countries said late Sunday that negotiators in Rome had reached a deal that will be made public in Jerusalem and Ankara on Monday. Israeli Prime Minister Benjamin Netanyahu was in Rome to meet with Secretary of State John Kerry and discuss the agreement.

Relations collapsed in 2010 after nine Turkish citizens and a Turkish-American were fatally wounded—including one who died years later— during an Israeli commando raid on a Turkish ship carrying activists trying to break the blockade and enter Gaza by sea.

At a briefing in Rome on Monday morning with Mr. Kerry, ?the Israeli leader called it an important step toward normalizing relations that would have?”immense implications” for Israel’s economy. He didn’t provide further details but was scheduled to speak at a news conference later in the day.

“It’s a positive step we wanted,” Mr. Kerry said. “We hope it’s the beginning of others.”

The push toward rapprochement came amid security threats to both nations—the Syrian conflict on their borders, the rise of the extremist group Islamic State and what many regional governments view as Iran’s assertive military and political posture.

The deal won’t end the tight controls Israel imposed on Gaza’s borders in 2007 to hold Hamas militarily in check—a concession Turkey had demanded. But, in a compromise that broke a deadlock after months of talks, Turkey will be allowed to send aid to Gaza through the Israeli port of Ashdod and to build a 200-bed hospital, new power plants, residential buildings and other badly needed infrastructure in the war-torn Palestinian enclave.

Israel will also make it possible for Turkey to launch major development projects in the West Bank, a Palestinian territory whose borders are also controlled by Israel, a senior Turkish official said.

“There are absolutely no references to Hamas in the agreement. Turkey will continue supporting the Palestinian state and the people of Palestine… We are pleased to announce that representatives of the Palestinian government and Hamas have voiced their support to Turkey within the context of the negotiations,” the Turkish official said early Monday.

Just as importantly, the two countries will rebuild military and intelligence ties, which grew close in the 1990s and early 2000s, an Israeli official said. They will send ambassadors back to each other’s capitals.

Under the agreement, Israel will set up a $20 million fund to compensate families of those killed and wounded in the 2010 raid, the Israeli official said, and Turkey will ensure that Israeli officials are shielded from prosecution over the incident.

But the real news here is the formation of a new middle-eastern Axis, one which will include not only Turkey, which in recent months has pivoted toward restoring relations with Saudi Arabia and Qatar, but now includes Israel and most importantly Russia. This will have huge geopolitical implications for not just regional military developments but also for Russian oil transit plans, as the restoration of diplomatic relations with Turkey may mean that the Turkish stream pipeline is once again back online.

EMERGING MARKETS

Venezuela

 

Armed guards are now guarding food trucks and stores in Venezuela

(courtesy Michael Snyder)

They Are Putting Armed Guards On Food Trucks In Venezuela

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

We are watching what happens when the economy of a developed nation totally implodes.  Just a few years ago, Venezuela was the wealthiest nation in all of South America, and they still have more proven oil reserves than anyone else on the entire planet including Saudi Arabia.  But now people down there are so hungry and so desperate that some of them are actually hunting dogs, cats and pigeons for food.  Just a few days ago, I gave a talk down at Morningside during which I warned that someday we would see armed guards on food trucks in America.  After that talk was done, I went back up to my room and I came across a New York Times article which had been republished by MSN that explained that this exact thing is already happening down in Venezuela…

With delivery trucks under constant attack, the nation’s food is now transported under armed guard. Soldiers stand watch over bakeries. The police fire rubber bullets at desperate mobs storming grocery stores, pharmacies and butcher shops. A 4-year-old girl was shot to death as street gangs fought over food.

Venezuela is convulsing from hunger.

Hundreds of people here in the city of Cumaná, home to one of the region’s independence heroes, marched on a supermarket in recent days, screaming for food. They forced open a large metal gate and poured inside. They snatched water, flour, cornmeal, salt, sugar, potatoes, anything they could find, leaving behind only broken freezers and overturned shelves.

All over the country, people are standing in extremely long lines day after day hoping to get some food.  Sometimes the food trucks don’t bring anything, and sometimes it is just scraps like fish heads and rotten fruit.  To get a better idea of what life is like in Venezuela right now, just check out this YouTube video

As people down in Venezuela get hungrier and hungrier, extreme desperation is setting in.  And with extreme desperation comes crime and violence

A 4-year-old girl, Britani Lara, was reportedly shot to death Tuesday in the Caracas suburb of Guatire as she stood in line with her mother outside a  government-owned Mercal grocery store.

El Nacional newspaper reported that gangs on motorcycles have fought over the right to control and distribute food at the Guatire store and that the gunfire may have been a result of  that dispute. Eight others were reportedly injured in the incident.

Violence also was reported at a food protest staged in front of a store in the city of Cariaco in central Sucre state, where 21-year-old Luis Fuentes was killed by a gunshot. Eleven others were wounded, according to El Nacional newspaper.

Could you imagine living in a nation where all this is going on?

Most Americans could not even conceive of such a thing.  But of course the truth is that up until just recently most Venezuelans could not either.  In fact, just a couple years ago Venezuela was one of the most prosperous nations in all of South America

Two years ago, Venezuela was a normal functioning nation, relatively speaking of course. It was by no means a free country, but the people still had a standard of living that was higher than most developing nations.

Venezuelans could still afford the basic necessities of life, and a few luxuries too.

They could send their children to school and expect them to receive a reasonably good education, and they could go to the hospital and expect to be effectively treated with the same medical standards you’d find in a developed nation. They could go to the grocery store and buy whatever they needed, and basic government services like law enforcement and infrastructure maintenance worked fairly well. The system was far from perfect, but it worked for the most part.

There are all sorts of signs that the thin veneer of civilization that we all take for granted in the United States is starting to crumble as well.  If you follow End Of The American Dream on a regular basis, you know that I post articles about this theme all the time.  But today I just want to share one tidbit with you.  Reuters is reporting that the number of heroin users in this country has nearly tripledsince 2003, and the number of heroin-related deaths is now about five times higher than it was in the year 2000…

A heroin “epidemic” is gripping the United States, where cheap supply has helped push the number of users to a 20-year high, increasing drug-related deaths, the United Nations said on Thursday.

According to the U.N.’s World Drug Report 2016, the number of heroin users in the United States reached around one million in 2014, almost three times as many as in 2003. Heroin-related deaths there have increased five-fold since 2000.

“There is really a huge epidemic (of) heroin in the U.S.,” said Angela Me, the chief researcher for the report which was released on Thursday.

Just like Venezuela, our society is rotting too.  As I have warned before, the exact same things that are happening down there right now are coming here too.

It is just a matter of time.

On a side note, I would like to congratulate the British people for voting for independence from the European Union.  As I have been writing this article, the results have been coming in, and at this point it looks like victory is virtually assured for the “Leave” campaign.

I would have voted “Leave” myself if I lived in the United Kingdom, but let there be no doubt about what comes next.  Uncertainty and chaos are going to reign in European financial markets, and we have already seen the biggest one day drop in the history of the British pound.  There is going to be short-term economic and financial pain, but the people of the United Kingdom have done the right thing for their children and their grandchildren, and for that they are to be applauded.

Jun 26, 2016 9:30 PM end OIL ISSUES Canada is back in production and also we are witnessing oil companies in the Gulf of Mexico ramp up production.  Nigeria has made a deal with its rebels and it too will restart production.  This is why oil is tumbling today back into the 46 dollar handle: (courtesy Kennedy/Oil Price.com/zero hedge) Oil Tumbles Amid Bad News For Glut As US Offshore To Hit Record In 2017  

WTI Crude has tumbled back to a $46 handle this morning (from over $50 on Friday) with Brexit volatility weighing on every asset class and Nigeria and Canada restart production (following rebel attacks and wildfires respectively) but as OilPrice.com’s Charles Kennedy notes companies pumping oil from the Gulf of Mexico will ramp up production in coming months, propping up American output, despite efforts to curb production and raise barrel prices.

The United States currently produces 8.7 million barrels a day – a half a million less than where the figure stood last year, according to data from the Energy Information Administration (EIA).

Low prices caused by the high output levels have kept oil exploration efforts at a minimum.

Around 500,000 more barrels of crude from Mexico’s namesake gulf will go online by 2017, according to analysis by the Wall Street Journal that included government and private sector sources.

“The projects are coming faster and sometimes bigger than expected,” Roger Diwan of IHS Energy told Dow Jones. “The ramp-up seems to have accelerated during low prices.”

A handful of sizable fields had been funded for construction years prior, when prices were higher. The projects completed construction as scheduled and will begin production in the coming months.

Once the fields become operational, the U.S. Department of Energy predicts offshore oil production will set a record in 2017 with 1.91 million barrels – 24 percent more than in 2015 – flowing out of surrounding bodies of water by next December.

The year 2009 held the previous record for highest offshore oil production rate, but British Petroleum’s spill in the Gulf of Mexico later that year caused a moratorium on the category of drilling.

Mexico has also begun efforts to encourage drilling in the Gulf. A total of 21 companies, including the Who’s Who of Big Oil, have registered to take part in Mexico’s deepwater oil auction to be held in December.

Shell, Chevron, ExxonMobil, British BP, French Total SA, Spanish Repsol, Norwegian Statoil and Mexican Pemex are among the major players now registered to bid for 10 blocks in the Gulf of Mexico, Prensa Latina reports.

Some 76 percent of the country’s potential oil resources are in the Gulf of Mexico’s deep waters,according to Forbes.

Furthermore, returning production in Canada and Nigeria, combined with the Brexit result, could mean “the drop in prices in the short term may be serious,” Russia’s Novak said in an e-mailed statement. If supply isn’t restored, a return to fundamentals is likely fairly quickly, he said.

end This is going to hurt Europe:  the huge Dutch natural gas field Groningen is being curtailed due to a great number of seismic activity in the area.  The Dutch are afraid of a huge earthquake that may render the entire field useless! (courtesy Dave Forest/Oil Price.com) Earthquakes Cause Giant Natural Gas Field To Cut Production By 44% Jun 27, 2016 2:55 PM

Submitted by Dave Forest via OilPrice.com,

Europe just lost a big chunk of production from one of its most critical natural gas fields, and not for any of the usual reasons — technical problems, pipeline constraints, or terrorist disruptions.

These cuts are due to earthquakes.

The development came at the Groningen natgas field in the Netherlands. The largest producing field in Western Europe — and one of the world’s top 10 gas fields by size.

Groningen’s massive size has been an issue lately though, with drawdown from the field having caused seismic events in the areas above and surrounding the field.

Such concerns prompted the Dutch government to take action Friday. With the country’s Economics Minister Henk Kamp saying that regulators will reduce Groningen’s permitted output by 11.1 percent — to 24 billion cubic meters per year (850 billion cubic feet), down from a previous allowance of 27 billion cubic meters.

Minister Kamp also said that the reduced production quota will stay in effect for the next five years.This means that Europe has lost a significant slice of its go-to production for the foreseeable future.

This latest production cut continues a dramatic slide in Groningen’s output over the past 18 months. With the Dutch government deciding in early 2015 to cut production from 42.5 billion cubic feet annually to 39 billion cubic feet — and then further reducing the quota to 33 billion cubic feet just a few months later.

The further cuts announced Friday come after high-level Dutch regulatory body the Council of State ordered the government to take more action in protecting the public. With Minister Kamp saying thatthe new production cap would “reduce safety risks to Groningen’s residents and damage to buildings.”

The Minister did say that production could be increased above the quota in the event of exceptionally cold weather or other instances of strict necessity. But overall it appears that Groningen’s output is going to be 44 percent lower than it was less than two years ago — which could put upward pressure on prices in the European market.

That could have a number of knock-on effects. Including attracting more liquefied natural gas (LNG) to Europe — with countries here having a lot of under-used import capacity right now. Watch for the effects of the Dutch shut-in on prices — and structural changes in this market as a result.

 

end

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

Euro/USA   1.1007 DOWN .0078 (STILL  REACTING TO BREXIT)

USA/JAPAN YEN 101.53  DOWN 2.26 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.3197 DOWN .0464 ( BREXIT)

USA/CAN 1.3029 UP .0033

Early THIS MONDAY morning in Europe, the Euro FELL by 78 basis points, trading now JUST above the important 1.08 level FALLING to 1.1007; Europe is still reacting to BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP 41.42 POINTS OR 1.45%   / Hang Sang CLOSED DOWN 31.30 POINTS  OR 0.16%   AUSTRALIA IS HIGHER BY 0.45%/ EUROPEAN BOURSES ARE ALL IN THE RED  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this MONDAY morning: closed UP 357.19 POINTS OR 2.39% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 31.30 POINTS OR 0.16% . ,Shanghai CLOSED UP 41.42POINTS OR 1.45% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED  IN THE GREEN/India’s Sensex IN THE RED

Gold very early morning trading: $1330.00

silver:$17.79

Early MONDAY morning USA 10 year bond yield: 1.471% !!! DOWN 8.8 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.3000 DOWN 10 in basis points from FRIDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early MONDAY morning: 96.31 UP 87 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

 

END

 

 

And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.30% DOWN 6 in basis points from FRIDAY

JAPANESE BOND YIELD: -0.190% DOWN 4  in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:1.45%  DOWN 18 IN basis points from FRIDAY

ITALIAN 10 YR BOND YIELD: 1.51  DOWN 5 IN basis points from FRIDAY

the Italian 10 yr bond yield is trading 6 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.116% DOWN 6 FULL  BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

Euro/USA 1.1010 DOWN .0075 (Euro =DOWN 75 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 101.92 UP .162 (Yen DOWN 162 basis points )

Great Britain/USA 1.3109DOWN.01133 ( Pound DOWN 113 basis points/BREXIT DECISION AFFIRMATIVE

USA/Canada 1.3109- UP 0.0113 (Canadian dollar DOWN 113 basis points  AS OIL FELL  (WTI AT $46.47).

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This afternoon, the Euro was DOWN by 75 basis points to trade at 1.1010

The Yen FELL to 101.92 for a LOSS of 16 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was DOWN 480 basis points, trading at 1.3179

The Canadian dollar FELL by 113 basis points to 1.3109, WITH WTI OIL AT:  $46.47

The USA/Yuan closed at 6.648/

the 10 yr Japanese bond yield closed at -.190% DOWN 4  IN BASIS  points in yield/

Your closing 10 yr USA bond yield:DOWN 12 IN basis points from FRIDAY at 1.454% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.277 DOWN 14 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 96.49 UP 58 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY

London:  CLOSED DOWN 156.49 OR 2.55%
German Dax :CLOSED DOWN 288.50 OR  3.02%
Paris Cac  CLOSED DOWN 122.01  OR 2.97%
Spain IBEX CLOSED DOWN 142.20 OR 1.83%
Italian MIB: CLOSED DOWN 620.23 OR 3.94%

The Dow was DOWN 260.51  points or 1.50%

NASDAQ DOWN 113. 54 points or 2.51%
WTI Oil price; 46.46 at 4:30 pm;

Brent Oil: 47.40

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.53 (ROUBLE DOWN 0 & 41/100 ROUBLES PER DOLLAR FROM FRIDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD FALLS TO -.116%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:46.61

BRENT: 47.45

USA 10 YR BOND YIELD: 1.437% 

USA DOLLAR INDEX: 96.34 up 90 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.32171 down .04426 or 443 basis pts.

German 10 yr bond yield at 5 pm: -.116%

 

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Bonds & Bullion Bid But Brexit Blowback Batters Banks Jun 27, 2016 :

You silly sod, you got us all worked up over a little [Brexit]…”

 

European bank stocks were a bloodbath…Worst.Drop.Ever…

 

But US Financials were not immune, catching down to Treasuries’ reality…

 

US Financials are down the most since Summer 2011’s US Downgrade…

 

Citi, BofA, and MS all spanked with GS outperforming JPM… but still ugly…

 

As The Dimon Bottom looms…

 

Since Brexit was unleashed, Bullion (+6%), and Bonds (+4%) are dramatically outperforming as Cable and Financials make new lows…

 

Nasdaq is down over 7% since Brexit…

 

Trannies are the worst cash index since Brexit…

 

Dow is down over 1000 points…

 

Every affort was made to keep the S&P 500 above 2,000…

 

VIX ETFs are pushing higher after hours like yesterday…

 

Treasury yields continued to plummet post-Brexit…

 

With 2s10s at it slowest since Nov 2007…when the last recession started!

 

The USD Index spiked to 3 month highs…

 

This is the biggest 2-day spike in The USD Index since 1992…

 

Gold gained modestly on the day as crude tumbled…

 

 

 

Seriously… every single fucking day…

 

Charts: Bloomberg

end

 

Any chance for a rate hike is now in tatters!!  This was the big stumbling block for gold. Now it is clear sailing northbound!

(courtesy zero hedge)

The Fed’s Rate Hike Plans Are Now “In Tatters” – What Wall Street Thinks Jun 26, 2016 

Any “faint prospect” of a Fed July rate increase has entirely vanished, ING economist Rob Carnell wrote in note adding that the longstanding ING call for Sept. hike looks to be “hanging in tatters.”  Here are more comments, courtesy of Bloomberg, from Wall Steet’s so-called experts, none of whom predicted the actual a Brexit outcome, about U.S. monetary policy outlook following the outcome of the U.K. referendum.

BofAML (Ethan Harris, others)

  • Next Fed hike now seen in Dec., not Sept.
  • Brexit vote is another in “long string of confidence shocks,” will reduce U.S. GDP by an est. 0.2ppts over next 6 qtrs

BoT-Mits (Cliff Tan)

  • Brexit will tighten financial conditions, mkt reaction is going to possibly be “pretty severe” over next few trading days

Janus Capital (Bill Gross)

  • Fed’s dots have no future relevancy
  • Brexit was storming of the gates of finance by populists

JPMorgan (Michael Feroli)

  • Fed now seen hiking in Dec., not Sept.
  • There’s “exceptionally low visibility” on monetary policy outlook now

Macquarie (David Doyle, Brendan Livingstone)

  • Fed could need mos. to get clear picture about Brexit’s effect on global outlook
  • Unlikely to be full clarity before Sept.

Renaissance Macro (Neil Dutta)

  • FOMC to stand pat in July, Sept.; 50% odds of Dec. move
  • Fed might hike in Dec. if labor mkt recovers, estimates of GDP remain ~2%, financial conditions ease

Stifel (Lindsey Piegza)

  • Fed “has no other option but to remain on sidelines”
  • Uncertainty, volatility from Brexit takes any near-term hike “off the table”

Warburg (Carsten Klude)

  • Fed may lower rates if Brexit-fueled volatility lasts
  • Lowering of rates may occur before autumn if equity mkts experience sustained turbulence

Fed funds futures price 1st rate hike to 0.50%-0.75% range as more than likely for Nov.-Dec. 2017 as of Fri., compared with Jan. 2017 at Thur.’s close. Also, as noted on Friday, there is a greater probability of a rate cut than a rate hike now.

end

end

Something is up if both Yellen and Carney pull out of an ECB banking forum in portugal:

(courtesy zero hedge)

Yellen, Carney Pull Out Of ECB Forum In Portugal Jun 27, 2016 9:16 AM

How do you know that “things are getting serious”? Well, one way as Jean-Claude Juncker explained before, is that “you have to lie.” Another is when central bankers start withdrawing from cenrtal bank gatherings, which as Reuters reported is what both Mark Carney and now Janet Yellen have done, in this case pulling out of the ECB Forum on Central Banking that starts today and lasts through Wednesday.  Clearly they have bigger things on their plate…

As Reuters notes, Federal Reserve Chair Janet Yellen is no longer due to speak at a global central bank summit starting on Monday, the second high-profile defection after the Bank of England’s governor pulled out following Britain’s vote to leave the European Union.

An updated version of the programme of the event, organised by the European Central Bank, showed on Monday that a panel with Yellen, ECB President Mario Draghi and BoE Governor Mark Carney had been taken out. Carney had cancelled his attendance over the weekend.

The ECB’s Forum on Central Banking takes place every year in Sintra, Portugal.

Cited by Bloomberg a Fed spokesman said that Yellen will not participate in the Wednesday policy panel at the ECB conference as was originally scheduled. She will be returning to Washington following the BIS meetings.  The Fed did not offer an explanation for Yellen’s change in schedule.

We are curious how long it will take algos to “analyze” that this is great news as it implied imminent central bank intervention and promptly send stocks back to near all time highs.

end

 

The dominant sector in the USA economy is the service sector.  With the latest service PMI printing a flat 51.3 on expectations of a rise to 52.00. The USA economy is going nowhere!

 

(courtesy zero hedge)

US Services Economy Disappoints As ‘Optimism’ Plunges To Record Lows

The June flash Services PMI printed 51.3, flat to May but below 52.0 bounce expectations with both employment down (3rd monthly drop in a row to lowest since Dec 2014) and optimism tumbling – “service providers indicated another drop in confidence regarding the year-ahead business outlook, with the latest reading the weakest since the survey began in late-2009.

Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said:

The survey data indicate that any rebound in the economy from the weak first quarter was largely confined to April, and that growth has since faded again. The June PMIs, which provide the first insight into national business activity in the second quarter, suggest the underlying rate of growth in the economy is only a meagre 1%.

“Growth continues to be reliant on the service sector, with manufacturing acting as a drag on the economy. However, even the service sector has seen growth weaken in recent months, with firms citing increased uncertainty over the economic and political outlook both at home and abroad.

“Business optimism was the lowest seen since the height of the financial crisis, with firms seeing greater hesitation in spending on services by business and households.

“Uncertainty looks set to intensify in coming months and the UK’s shock vote to exit the EU exacerbates domestic worries about the presidential election.

“Signs of weak economic growth and a sluggish labour market, combined with ‘Brexit’ uncertainty, suggest that already-cautious policymakers will be in no rush to tighten policy.”

So “one-and-done”?

end Bank of America and Citibank are crashing in the USA as contagion is spreading to the USA (courtesy zero hedge) US Banks Are Crashing

“Fortress balance sheets”?

The Brexit contagion is spreading as USD liquidity and counterparty risk in the interconnected global financial system has reached US banks with Goldman at 3 year lows and BofA and Citi plunging over 12%. This happens just two days after the Fed released its latest stress test results finding that none of the 33 banks tested would need additional capital in case of a “severe” financial crisis. That conclusion may be tested soon.

BofA and Citri are ugly:

S&P Financials ETF is down almost 8% in the last 2 days – the biggest drop since the summer of 2011 US downgrade… and below the August crash close:

Who could have seen this coming?

end

Dallas Fed states that we are in recession.  It’s data suggestion contraction for 18 straight months;

(courtesy zero hedge)

 

“This Is A Recession” – Dallas Fed Workweek Hits 7-Year Low

The Dallas Fed Business Outlook has now been in contraction for 18 straight months. The underlying components are mixed but the average workweek has collapsed back to its lowest since Nov 2009. As one respondent noted, This is a recession… Fed policy has us locked into a lethargic and tenuous position… We cannot have millions of people out of the workforce and be healthy economically – they are a burden not a benefit.

The biggest drop in Dallas Fed workweek since 2009!

The remarks from various Dallas Fed Survey respondents sums up the reality best…

The oil industry is suffering due to the crude price plunge worse now than in the 1980s. For the ninth month U.S. industrial production declined year over year. This is a recession. There is a continued significant negative impact due to the downturn in the energy industry as a result of weak commodity prices. Recent slight improvement in commodity prices is having no positive impact on business conditions, although it may be slowing the pace of deceleration in business activity.”

The economy is nervous, shaky and uncertain. Fed policy has us locked into a lethargic and tenuous position. It appears the Fed doesn’t know how to get off the horse it created. The Fed talks interest rate increases but looks for every reason not to do it. Until the Fed backs out of trying to manage the economy, we will be stuck on the cusp of slow growth and a recession. Add the difficulty in getting commercial and retail financing and rising employee costs (health care, minimum wage threats and the ridiculous overtime executive order), and hiring for many of us will be minimal. We cannot have millions of people out of the workforce and be healthy economically – they are a burden not a benefit.

end Well that is all for today I will see you tomorrow night h

June 24/BREXIT AFFIRMATIVE and with it a huge Sigma six derivative mess!/

Fri, 06/24/2016 - 19:09

Good evening Ladies and Gentlemen:

Gold:  $1,320.20 UP $58.80    (comex closing time)

Silver 17.79  up a tiny 44 cents

In the access market 5:15 pm

Gold: 1316.00

Silver: 17.74

 

.

The June gold contract is an active contract. Last  night we had a fair sized 21 notices filed last night, for 2100 oz to be served upon today.  The total number of notices filed in the first 16 days is enormous at 15,416 for 1,541,600 oz.  (47.950 tonnes)

ii) in silver we had 2 notices filed for 10,000 oz..  Total number of notices served  in the 16 days: 491 for 2,455,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 275.27 tonnes for a loss of 28 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by A WHOPPING  7,382 contracts UP to 213,000, AGAIN A NEW ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS UNCHANGED with respect to YESTERDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.065 BILLION TO BE EXACT or 152% of annual global silver production (ex Russia &ex China)

In silver we had 2 notices served upon for 10,000 oz.

In gold, the total comex gold OI fell by a HUGE 4998 contracts down to 566,569 as the price of gold was DOWN $2.50 with YESTERDAY’S trading (at comex closing). The bankers were overjoyed with the fall in gold OI but not silver which is giving them nothing but fits

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

No changes in gold inventory. ??? on gold’s huge advance???

Total gold inventory: 915.90 tonnes

SLV

Another  855,000 oz leaves the SLV inventory

Inventory rests at 332.214 million oz.

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

1. Today, we had the open interest in silver ROSE by 7,382 contracts UP to 213,000  DESPITE THE FACT THAT THE price of silver was unchanged with YESTERDAY’S trading. The gold open interest FELL by a CONSIDERABLE 4,948 contracts DOWN to 566,569 as the price of gold was DOWN $2.50  YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 37.64 POINTS OR 1.30% / /Hang Sang closed DOWN 609.21 OR 0.2.92%. The Nikkei closed DOWN 1,286.33 POINTS OR 7.92% Australia’s all ordinaires  CLOSED DOWN 3.09% Chinese yuan (ONSHORE) closed DOWN at 6.6220 /Oil FELL to 47.80 dollars per barrel for WTI and 48.82 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6438 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN b) REPORT ON CHINA

A very big story!! We are now witnessing a huge increase in Chinese bankruptcies due to their zombie loans outstanding (non performing loans)

(courtesy zero hedge)

4. EUROPEAN AFFAIRS

i)The BREXIT vote will cause European stocks to make new lows for the next few days according to JPMorgan.  Welcome to the new BREXIT world!

( zero hedge)

ii)Merkel, the EU all scramble and ask for calm.  They did not get it

( zero hedge)

 

iii)Now it is Italy’s turn to launch a referendum campaign in conjunction with Northlern League and 5 Star

( zero hedge)

iv)Thomas Cook runs out of Euros

( zero hedge/)

v)The following is a huge commentary from RBC’s Charlie McEllligott. This morning as he awoke he quickly saw massive losses on equities: First from Asia (e.g. Nikkei down 8%) and then his own Europe equities (down 8 to 12%) and then he noticed huge increase in peripheral yields in Spain, Portugal and Italy.  We put two and two together and said that we had massive derivative losses underwritten by our huge banks. and this was a SIGMA SIX event (tail probability gone bad).  Today Deutsche bank along with other bankers collapsed in price!

a must read… ( Charlie McElligott/RBC/zero hedge) 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

i)Central bankers around the globe scramble to defend markets as dollars flee all markets. Derivative losses are enormous

( zero hedge)

 

ii)The G7  and the IMF join central bankers to try to calm markets to no avail

( zero hedge)

 iii)The following commentary is a biggy!  RCB’s Charlie McElligott stated today there there is a huge tail risk or in other words, a massive sigma six event.  He states that today was the appetizer.  Monday is for real ( zero hedge/Charlie McElligot/RCB) 7.OIL ISSUES After three weeks of increases, finally we see a decline of 7 rigs this week (courtesy zero hedge) 8.EMERGING MARKETS none today 9. PHYSICAL STORIES

i)Chris Powell explains the gold price suppression scheme

( Chris Powell/GATA)

 

ii)Britain votes for a BREXIT

( Erlanger/New York Times) iii)A very important commentary from Alasdair Macleod as he talks about the fallout from the BREXIT: namely black swans which will appear due to the huge drops in prices on equities and an increase in peripheral bond yields in Europe and most important derivative busts in dealers of gold who have been short for many weeks and this huge rise will bring them offside..

a must read… ( Alasdair Macleod) iv) Another must read as Bill Holter also discusses the ramifications on the BREXIT (Bill Holter/Holter-Sinclair collaboration) 10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Durable goods orders crater in May down 2.2% and it is the 17th consecutive month for durable goods declines

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 569,506 for a GOOD GAIN of 2,937 contracts despite the fact that  THE PRICE OF GOLD WAS DOWN $6.80 with respect to YESTERDAY’S TRADING. OUR BANKERS WERE OVERJOYED WITH THE FALL IN TOTAL OI YESTERDAY.TODAY THERE WERE NOT HAPPY TO SEE THE OI RISE (PRIOR TO BREXIT) JUNE IS THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR AND IS A VERY ACTIVE MONTH FOR GOLD DELIVERIES. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 291 for a loss of 56 contracts. We had 21 notices filed YESTERDAY, so we lost a tiny 35 contracts or 3500 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI fall by a GOOD SIZED 53 contracts up to 5,036.This level is still very high and no doubt will be troublesome for our bankers as the front July contract month open interest is extremely high for a non active month and it also refuses to shrivel by much. In ounces, we have 503600 oz or 15.66 tonnes  The next big active contract month is August and here the OI ROSE by 240 contracts up to 407,487. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was A RECORD at 1,080,895. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was POOR at 164,450 contracts. The comex is not in backwardation. I  cannot wait until Monday to see the new  OI figures.

Today we had 24 notices filed for 2400 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by A WHOPPING 5,479 contracts from 213,000 to 218,479. The open interest rose despite the price of silver being up by only 4 cents  with respect to yesterday’s trading. The front month of June saw it’s OI fall by 2 contracts reducing to 94 . We had 2 notices filed YESTERDAY , so we NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING  . The next big delivery month is July and here the OI fell BY 8,235 contracts down to 47,230. We have less than  1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at 109,498 which IS huge. The confirmed volume YESTERDAY (comex + globex) was HUGE at  84,231. Silver is not in backwardation . London is in backwardation for several months.   We had 93 notices filed for 465,000 oz.  

JUNE contract month:

INITIAL standings for JUNE

June 24. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  48,407.25 OZ

incl

486 KILOBARS

SCOTIA Deposits to the Dealer Inventory in oz 3858.000 OZ

120 kilobars

BRINKS Deposits to the Customer Inventory, in oz   48,577.530 OZ

SCOTIA No of oz served (contracts) today 24 contracts
(2400 oz) No of oz to be served (notices) 267 contracts

26,700 oz Total monthly oz gold served (contracts) so far this month 15,440 contracts (1,544,000 oz)

(48.024 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  256,902.3 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  3858.000 oz

(120 kilobars)

total dealer deposit:  3858.000  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 1 customer deposits:

i) Into Scotia: 48,577.530 oz

Total customer deposits; 48,577.530   OZ

Today we had 2 customer withdrawal:

i) out of Brinks: 32,975.250 oz

ii) Out of Manfra: 15,432.000 oz (486 kilobars)

total customer withdrawals:  48,407.25 oz

Today we had 2 adjustments:

i) Out of HSBC:  99.991 oz oz were transferred out of the dealer and into the customer HSBC.  (we will deem this a settlement)

ii) Out of Scotia:  482.25  were transferred out of the dealer and into the customer. of Scotia. We will deem this a settlement. Total in tonnage: .018 tones

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 21 contracts of which 9 notices was stopped (received) by JPMorgan dealer and 12 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,440) x 100 oz  or 1,544,000 oz , to which we  add the difference between the open interest for the front month of JUNE (291 CONTRACTS) minus the number of notices served upon today (24) x 100 oz   x 100 oz per contract equals 1,570,700 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED AND WE HAVE NOW WITNESSED THE SAME RESULT FOR JUNE.   Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,440) x 100 oz  or ounces + {OI for the front month (291) minus the number of  notices served upon today (24) x 100 oz which equals 1,570,700 oz standing in this   active delivery month of JUNE (48.855 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE MOSTLY GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (48.855 TONNES) . WE LOST 35 contracts or an additional 3500 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. The 35 contracts were not doubt settled with a fiat bonus. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 48.855 tonnes of gold standing for JUNE and 53.36 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 48.855 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018 = 64.950 tonnes still standing against 53.36 tonnes available.  Total dealer inventor 1,715,683.972 tonnes or 53.36 tonnes Total gold inventory (dealer and customer) =8,854,088.661 or 275.399 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 275.399 tonnes for a loss of 28 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!    end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 24.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  948,196.886 oz

CNT

BRINKS Deposits to the Dealer Inventory 464,642.960 oz

CNT Deposits to the Customer Inventory  1,257,781.889  oz

JPM,CNT,SCOTIA No of oz served today (contracts) 93 CONTRACTS 

(465,000 OZ) No of oz to be served (notices) 1 contracts

5,000 oz Total monthly oz silver served (contracts) 584 contracts (2,920,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  24,188,599.1 oz

today we had 1 deposit into the dealer account

i) Into CNT: 464,642.960 oz

total dealer deposit:464,642.96 oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 3 customer deposits:

i) Into JPMorgan:  515,510.700 oz

ii) Into CNT: 136,055.739 oz

iii) Into Scotia: 600,215.45

Total customer deposits: 1,251,781.889 oz

everyday for the past few weeks, JPMorgan has been bringing in at least 600,000 oz or close to it into the silver comex and today they deposited again the same like quantity.

We had 0 customer withdrawals

:

total customer withdrawals:  nil  oz

   

 

 we had 0 adjustment

The total number of notices filed today for the JUNE contract month is represented by 93 contracts for 465,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (584) x 5,000 oz  = 2,920,000 oz to which we add the difference between the open interest for the front month of JUNE (94) and the number of notices served upon today (93) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  584 (notices served so far)x 5000 oz +{94 OI for front month of JUNE ) -number of notices served upon today (93)x 5000 oz  equals  2,925,000 of silver standing for the JUNE contract month. We NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.   Total dealer silver:  23.810 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   150.767 million oz The total open interest on silver is NOW at its all time high with the record of 218,479 being set June 24.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. end At 3:30 pm we receive the COT report which gives position levels of our major players. Last week we had a humongous increase by the commercials in gold and it continued again this week:

— Published: Friday, 24 June 2016 | Print  | Disqus

Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 371,148 54,623 180,871 210,498 545,440 762,517 780,934 Change from Prior Reporting Period 4,451 -6,035 7,850 6,012 17,902 18,313 19,717 Traders 212 100 156 58 72 335 269   Small Speculators   Long Short Open Interest   52,703 34,286 815,220   2,285 881 20,598   non reportable positions Change from the previous reporting period COT Gold Report – Positions as of Tuesday, June 21, 2016 Our large specs: Those large specs that have been long in gold added 4451 contracts to their long side Those large specs that have been short in gold covered 6035 contracts from their short side. Our commercials; Our criminal bankers who have been long in gold added 6012 contracts to their long side Those bankers (commercials) who have been short in gold added another whopping 17,902 contracts to their short side Our small specs: Those small specs that have been long in gold added 2285 contracts to their long side Those small specs that have been short in gold added 881 contracts to their short side. Conclusion: same as last week; criminal activity.  We will have to wait until next week to see the damage down unto the bankers today. And now for our silver COT: Silver COT Report: Futures Large Speculators Commercial Long Short Spreading Long Short 106,453 24,342 36,893 63,835 156,337 9,365 -1,617 277 -1,159 7,364 Traders 116 58 76 49 48 Small Speculators Open Interest Total Long Short 233,666 Long Short 26,485 16,094 207,181 217,572 -2,307 153 6,177 8,484 6,024 non reportable positions Positions as of: 200 154 Tuesday, June 21, 2016   © SilverSeek Our large specs: Those large specs that have been long in silver added a huge 9365 contracts to their long side Those large specs that have been short in silver covered 1617 contracts from their short side Our commercials: Those commercials that have been long in silver pitched 1159 contracts from their long side Those commercials that have been short in silver added another whopping 7364 contracts to their short side. Our small specs; Those small specs that have been long in silver pitched 2307 contracts from their long side Those small specs that have been short in silver added a  tiny 153 contracts to their short side. Conclusions:  criminal activity at its finest END And now the Gold inventory at the GLD june 24./strange!! no additions to gold with its huge 58 dollar advance?? june 23/no change in gold inventory tonight/rests at 915.90 tonnese June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx june 24/ Inventory rests tonight at 915.90 tonnes

end

Now the SLV Inventory June 24/This makes no sense!! 855,000 oz of silver leaves the SLV headed straight to Shanghai/Inventory rests at 332.214 million oz June 23/ no change in silver inventory/rests tonight at 333.069 million oz June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/ June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495 June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 24.2016: Inventory 332.214million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 3.2 percent to NAV usa funds and Negative 2.8% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 60.9% Percentage of fund in silver:37.8% cash .+1.3%( June 24/2016). / 2. Sprott silver fund (PSLV): Premium RISES  to +0.35%!!!! NAV (June 23/2016)  3. Sprott gold fund (PHYS): premium to NAV  rises TO +1.32% to NAV  ( June 23/2016) Note: Sprott silver trust back  into POSITIVE territory at +35% /Sprott physical gold trust is back into positive territory at +1.32%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,FRIDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) Gold Bullion Surges 6% In USD as BREXIT Creates Global Contagion Risk By Mark O’ByrneJune 24, 20160 Comments

Note: Our trading desk will be open until 1800 UK time today (BST) and from 0700 UK time Monday morning (Monday 27th), in order to deal with the increased demand for precious metals.

Gold Note
– There has been record online sales on the GoldCore website for this time of day and the phones are ringing off the hook. We have had more sales than during the Lehman crisis and at the height of the Eurozone debt crisis. It is nearly all buying with a preference for gold over silver. We may have to restrict trading to existing clients if we continue to see this level of demand.

– We are seeing more selling then expected and seeing some clients choosing to take profits after the very sizeable short term capital gains. As a percentage of overall trading though, sellers are vastly outnumbered by buyers.

– Bullion inventories had already been increased to record levels and we are confident that the UK leaving the EU will lead to a sustained increase in coin and bar buying in the coming months.

 

Markets Today (Finviz)

Facts
– Sterling and euro have fallen sharply on fx markets
– Gold surged 20% in sterling to £1,015/oz
– Gold now 14% in higher in GBP at £960 per ounce
– Gold 8% higher in EUR and 5% higher in USD
– Stocks globally are down sharply – FTSE down 9%
– European stocks down sharply – Euro Stoxx 50 Futures collapsed over 11% at the open
– Bank shares are down 20% to 25%
– Cameron has resigned – adding to uncertainty in markets
– Record online sales at this time of day for GoldCore
– Nearly all buying with a preference for gold over silver
– Some selling – with some investors choosing to take profits after sizeable short term gains

Ramifications
There is the real risk of contagion in the EU
– UK leaving the EU increases the risk of the EU disintegrating as it greatly increases the risk of France, Italy, Spain, Netherlands and Greece following the UK
– This poses risks to the “single currency,” the euro as these nations may revert to their national currencies
– Still fragile UK, French, Italian, Spanish, Greek and Irish banks are coming under pressure
– The uncertainty and shock is likely to undermine business and consumer confidence and likely lead to a recession in the UK and will likely impact an already vulnerable Eurozone and global economy
– Central banks are likely to embark on further QE and further devalue currencies in order to prevent recessions

UK
– The UK is likely to enter recession which will lead to further QE and see sterling devalued more over the long term
– The UK total debt to GDP ratio is over 450% which also poses severe risks to the economy and sterling
– UK banks remain vulnerable and in the event of contagion will likely see bail-ins and deposit confiscation
– British people, companies etc are very exposed to sterling. One way to hedge and protect against that risk is to diversify into physical gold and silver.

Ireland
– The sharp fall in sterling versus the euro is likely to lead a serious fall in Irish exports to the UK which will impact jobs and the Irish economy. This combined with already heightened global risks may lead to a recession in Ireland – impacting the Irish stock and property market
– Longer term the euro looks very vulnerable and may collapse as warned of by Soros and many others
– Irish banks remain vulnerable and in the event of contagion will likely see bail-ins and deposit confiscation
– Irish people, companies etc are seriously exposed to the euro. The way to hedge and protect against that risk is the diversify into gold.

Conclusion
– The Brexit vote underlines the importance of owning gold as vital financial insurance in these uncertain times. The degree of risk means that investors should consider having higher allocations of 25% to 30% to physical gold and silver coins and bars.

Gold Prices (LBMA AM)
24 June: USD 1,313.85, EUR 1,181.28 & GBP 945.58 per ounce
23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce
22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 & GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 & GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 & GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 & GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 & GBP 903.04 per ounce

Silver Prices (LBMA)
24 June: USD 18.04, EUR 16.32 & GBP 13.18 per ounce
23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce
22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 & GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 & GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 & GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 & GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 & GBP 12.26 per ounce


Gold News and Commentary
GoldCore experienced record online sales for the time of day and may have to restrict trading to existing clients if demand remains high (Bloomberg via Business Times Singapore)
Elderly customer fearing economic collapse asked if she could invest all of her life’s savings in gold, despite the recommended investment level of 15% (WSJ)
Gold Sees Biggest Gain Since 2008 in Rush for Havens From Brexit (Bloomberg)
Gold Soars as Investors Seek Haven Following ‘Brexit’ (WSJ)
‘Buy gold’ searches soar 500pc after Britain votes to leave EU: here’s how to get your hands on the yellow metal (Telegraph)
Pound Plunges to Lowest in More Than 30 Years as Brexit Looms (Bloomberg)
Deutsche Bank to shut 188 German branches, cut 3,000 staff (CNBC)

Gold Soars Most In 42 Years For British Buyers (Zero Hedge)
Britain Votes to Leave E.U., Stunning the World (NY Times)
EU Referendum Live (Telegraph)
U.K. votes for Brexit: Latest on the fallout from the EU referendum (Marketwatch)
Britain votes leave: Don’t panic – this is an opportunity (Money Week)
Read More Here

Recent Market Updates
– BREXIT Day – Markets Becalmed – Gold Panic Prelude – Trading Hours
– Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market
– Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”
– Gold Prices Surge to Highest in Nearly Two Years On FED and Brexit Haven Demand
– Gold Bullion Has Little Downside, Brexit Or Not, Says HSBC
– Central Bank of Ireland Warns Risks are Debt, Brexit, Geopolitical Tensions and Migration
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

Mark O’Byrne Executive Director Gold trading early this morning: Gold Soars Most In 42 Years For British Buyers

It appears Brits are quick to rotate from their Pounds Sterling into pet yellow rocks as Gold prices spike (in GBP) explode almost 15% overnight… the most in 42 years…

 

 

It seems once again, the barbarous relic provided those willing to leap the kind of wealth protection they were looking for.

 

end

 

Chris Powell explains the gold price suppression scheme

(courtesy Chris Powell/GATA)

 

GATA secretary explains gold price suppression and news suppression Submitted by cpowell on Fri, 2016-06-24 02:29. Section:

10:29p ET Thursday, June 23, 2016

Dear Friend of GATA and Gold:

Your secretary/treasurer was interviewed this week by Finance and Liberty’s Elijah Johnson, discussing the suppression of the gold price suppression story by mainstream financial news organizations, how understanding of market rigging by central banks could overthrow the world financial system, the mechanics of gold price manipulation, central bankers’ admissions of gold price rigging, and the indifference of gold and silver mining companies to the suppression of the price of their products. The interview is 27 minutes long and can be heard at YouTube here:

https://www.youtube.com/watch?v=ZWBPM79RjqA&index=1&list=PLNwUWnJgSq_LsS…

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

end Britain votes for a BREXIT (courtesy Erlanger/New York Times) Rule, Britannia! Britannia, rule THYSELF! Submitted by cpowell on Fri, 2016-06-24 04:20. Section:

The nations not so blest as thee
Must in their turn to tyrants fall,
While thou shalt flourish great and free,
The dread and envy of them all.

* * *

Britain Votes to Leave the European Union

By Steven Erlanger
The New York Times
Friday, June 24, 2016

LONDON — Britain has voted to leave the European Union, a historic decision sure to reshape the nation’s place in the world, rattle the Continent, and rock political establishments throughout the West.

With 309 of 382 of the country’s cities and towns reporting early on Friday, the Leave campaign held a 52 percent to 48 percent lead. The BBC called the race for the Leave campaign shortly before 4:45 a.m., with 13.1 million votes having been counted in favor of leaving and 12.2 million in favor of remaining.

The British pound plummeted as financial markets absorbed the news.

Despite opinion polls ahead of the referendum on Thursday that showed either side in a position to win, the outcome nonetheless stunned much of Britain, Europe and the trans-Atlantic alliance, highlighting the power of anti-elite, populist, and nationalist sentiment at a time of economic and cultural dislocation.

“Dare to dream that the dawn is breaking on an independent United Kingdom,” Nigel Farage, the leader of the U.K. Independence Party, one of the primary forces behind the push for a referendum on leaving the European Union, told cheering supporters just after 4 a.m. …

… For the remainder of the report:

http://www.nytimes.com/2016/06/25/world/europe/britain-brexit-european-u.

end A very important commentary from Alasdair Macleod as he talks about the fallout from the BREXIT: namely black swans which will appear due to the huge drops in prices on equities and an increase in peripheral bond yields in Europe and most important derivative busts in dealers of gold who have been short for many weeks and this huge rise will bring them offside.. a must read… (courtesy Alasdair Macleod) The consequences of leaving the party BY ALASDAIR MACLEOD

GOLDMONEY INSIGHTS JUNE 24, 2016 The collective decision of the British electorate is to reject the recommendation of its government, excepting those of its few dissenting ministers, that Britain should remain in Europe.

It is a signal failure of government policy. Above all, it is a failure that undermines the state’s control over ordinary people. Time will tell whether it is just a temporary setback for the world’s economic planners, or the removal of a keystone supporting the whole structure of modern statism.

There are, therefore, two aspects of this development that must be considered, domestic UK politics and the international economic and political consequences.

There can be little doubt that David Cameron and George Osborne the Chancellor are now only caretakers, with the duty of managing a planned withdrawal from Europe until their replacement as executive politicians. The withdrawal will be a lengthy process, which over the next two years at least, will lead to the final, official separation. It is possible there will be attempts by the European elite in Frankfurt and Paris, to come up with proposals to keep Britain in the EU club and to force a second referendum. Any such attempt will fail, because it cannot even be entertained by a caretaker Prime Minister.

David Cameron’s days as Prime Minister are numbered and he now has no real authority. The Conservatives will have to elect a new leader, and the bookies’ favourite is almost certain to be Boris Johnson. He is likely to be elected by the Conservative Party by the end of this year.

Britain’s future will therefore be subject to the policies of a Boris-led government, which it has to be admitted, will have obtained power basically through the failure of the Remain camp to come up with a convincing argument. It was arguably Remain that lost, and not Leave that won.

While the Leave camp campaigned on an agenda, which by implication was for freer markets, it is another thing to assume that regulations and red-tape will actually be rescinded. Therefore, a cynic might with justification point out that instead of being controlled by one bunch of inept politicians in Brussels, the British economy will be run by another bunch of inept politicians in Westminster.

The reality is that Boris Johnson, if he becomes Prime Minister, and his future government are creatures of the system. Importantly, they lack the intellectual basis to confidently challenge it. Doubtless, they will consult the same advisors who supported Remain, not just in the civil service, but in the private sector banks and in big business. No politician, unless he really understands the economic challenge, is immune from the persuasive efforts of these lobbyists and vested interests.

Britain’s progress from being part of a European super-state to full independence is therefore unlikely to be smooth. The UK will, once again, be more exposed to the discipline of private sector markets. Sterling markets are not too big for speculators to attack successfully. There is a significant risk, in the short-term at least, that Britain will stumble from sterling crisis to sterling crisis.

We could argue that from today, nothing immediately changes. Britain will still be an EU member for the next two years. This is true, but it ignores the fact that markets are forward-looking, and will not treat government procrastination kindly. It will be a steep learning curve for Boris & Co.

Two bits of unfinished business will have to be addressed. There is little doubt that the post-referendum collapse in sterling was exacerbated by the derogatory statements of two men, George Osborne, the Chancellor, and Mark Carney, the Governor of the Bank of England. Both men in office have a duty not to undermine the economy or the currency in their statements. Some latitude can be given in this matter to an incumbent politician, but not to the head of a central bank.

If Remain had prevailed, they would have got away with it. But it did not, and the Leave vote carried the day despite their threats. The consequences of their scare tactics, it could be argued, have not only made things worse for sterling and sterling-denominated financial markets than they would otherwise be, but their statements have contributed to a wider market crisis. Both men are therefore likely to be forced from office sooner rather than later.

Black swans and just deserts

The immediate response in global markets to the Leave surprise has been one of panic, starting with Asian markets, and a yen soaring to under 103 to the dollar. Gold has been just about the only bright spot, jumping by over 6% to $1340 at one point. Given sterling’s weakness, gold has risen more dramatically measured in pounds, by nearly 20% to £1,000 per ounce. Asian equity markets are taking it badly, with the Japanese market down over 7.5%.

This is the overnight market news.  With a bit of luck, traders might be more rational when European markets begin trading properly later this morning. However, the global financial and economic situation is dire, and ripe for a crisis. At particular risk are the European banks, whose complacent bets on a Remain result will hurt them badly. Expect the share prices of banks such as Deutsche, UniCredit and Credit Suisse to plumb new lows, fuelling concerns about their solvency.

That is the black swan. Just deserts are the fare of politicians in Europe and the crew at the IMF. The EU is faced with populist demands for democracy, or at least a better system than on offer from the EU hierarchy. It will be lucky to avoid further disintegration, with ex-members seeking their own trade alliances. That is, if a systemic banking crisis doesn’t get it first.

The IMF also made a very bad and inappropriate call, with Christine Lagarde publicly supporting the Remain mantra of gloom and doom in the event of leave. This important institution, which issues the world’s SDRs, would have served markets better if it had kept quiet and prioritised risk control. Its credibility has been badly damaged.

I must end this report on one further gloomy note. The bullion banks in their complacency have built up large short positions in gold, which by 5.00AM London time this morning had soared $100 at one point. Unless, during the course of today’s trade, gold loses most of this remarkable rise, there could be defaults in this market. The gold market, being based on the one form of money that is no one else’s risk, is central to the whole financial system. This could turn out to be the largest worry of all.

end

Lawrie Williams on the huge BREXIT win for the leave:

Britain, Brexit, Bullion and the Pound June 24, 2016lawrieongold

Against most predictions, Britons voted to leave the European Union in yesterdays’ referendum.  Pollsters, and even the bookmakers, had obviously failed to account for the huge underlying anti-EU sentiment across the country.  In regional terms only Scotland, Northern Ireland , and perhaps most importantly London and the odd pocket in the richer south-east of the country, voted to remain in the Union.  This will undoubtedly build-up problems ahead, particularly should Scotland, as its leadership has threatened, push for a new referendum with the intention of gaining independence and rejoining the EU on its own.  In Northern Ireland the prospect of having to re-implement border controls with the Republic, which is in the EU, could reignite sectarian differences.  Should Scotland secede and join the EU, the imposition of border controls with England, which would presumably become necessary, and free movement of people between the two countries, would be another extremely touchy subject!

Ross Norman, CEO of UK bullion dealers Sharps Pixley, noted in an early comment this morning: “Gold rocketed this morning as the shock UK referendum result saw carnage in financial markets, prompting a rush to safe haven assets like gold. With sterling falling to its lowest in 30 years, the biggest gains were seen in gold for UK investors which rose 20 pct in just a few minutes before settling this morning at gbp 960, a gain of 12 pct on the day so far.  “

We would add here that markets, perhaps somewhat surprisingly, made something of a significant recovery  with both the pound sterling and the stock market  both recovering about half the ground lost in the initial knee-jerk reaction before slipping back a little again.  Meanwhile gold, at the time of writing, remains about $60 higher than it was before the Brexit vote began to look a reality, but did fall back at one time to a level seen only just over a couple of weeks ago well before the referendum, although at a time when the Brexit possibility appeared to have taken a temporary lead in the opinion polls.  Certainly on initial considered reaction, once the London markets had opened, the pound sterling has not performed nearly as badly as some – notably George Soros, who had predicted a 15-20% drop – had forecast, nor has the gold price risen as much as many market followers had suggested.  But it is early days yet.

Commenting on the retail market for gold in London, Norman said: “At Sharps Pixley we have already seen our busiest day ever with online sales draining our stocks of our larger bullion bars and prompting us to call on emergency reserves of kilobars from Germany. Our stocks of many coins have also been sold out with only limited availability today. 

“Stocks of physical gold for retail investors in small denominations are normally quite modest in the UK compared to markets like Germany where gold buying is more commonly adopted by savers. We have had to call on our parent company in Germany, Degussa (said to to be the largest in Europe in the sector) to help us out with additional bullion. Germans are a cautious people with not only gold reserves owned by the Bundesbank about 10 times the size of the UK Treasury’s very modest 310 tonnes (just a little more than Lebanon’s gold reserves – thanks Gordon) – but Germans have 4 times the propensity to save compared to UK savers. 

Norman went on to note:  “Gold has done what it does best and that is to provide investors with protection against currency weakness and political uncertainty- it is a safe haven asset with wealth preservation properties – the prescient investor has been well rewarded by his caution. We have always cautioned against betting on gold for short term outcomes, but over the long term it does what it should and that is to provide people with financial insurance.

We are thus, in the UK, entering a pretty uncertain time.  Initial market reaction suggests that the financial sector is taking a brighter view on the exit vote than many had suggested would be the case should Brits vote ‘out’.  However they are looking very volatile at the moment and they may take some days, weeks or even months to settle down again.  We doubt the initial fallout will be anywhere near the way things will eventually settle down.

 

end

Bill Holter on the BREXIT:

(courtesy Bill Holter/Holter/Sinclair collaboration)

BREXIT!  I have to admit, I did not believe it would happen.  Rather, I did not believe it would be “allowed” to happen.  In retrospect I believe the elites will look back and wish they had “Diebold” doing the vote count.  This vote has so many various ramifications, it is hard to wrap your head around what it means but let’s take a look at what stands out most.
  First and foremost, the “people stood up and spoke”.  The vote to exit is without a doubt the largest protest vote the world has seen in many years.  It is important to note that the Brexit vote is symptomatic of what is happening worldwide.  I would also say it is very similar to the Trump phenomenon here in the States, people are angry.  (I would also say the results are very encouraging to the Trump camp).  Next, we must wonder “who” is next?  Italy, Spain, France?  Then, the next exit is the curtain for the EU experiment as a whole.  It is only a matter of time before the next referendum (Italy in October), Brexit is only the beginning of an end where individual countries will prefer to steer their own destinies.  “Globalization” has been dealt a huge blow!
It should be noted, the vote yesterday was only a referendum and does not guarantee the Parliament will petition to leave the Eurozone.  It will be interesting to see how the Brits react if Parliament defies their wishes.  All of this will take “time” to occur, but time is not something I believe is available and will most likely be cut short by the markets short circuiting.
As for markets, Brexit is being called a six sigma “Black Swan”.  I had planned to write today that the entire system itself is the fabled Black Swan, I think we will soon see if this thought is correct.  The world will wake up Monday morning to all sorts of margin calls.  You must understand, the “carry trade” is held on very thin margin.  No matter what market you are looking at, they all moved several percentage points versus 1% or much less used to carry positions.  My point is this, many “counterparties” were outright blown up today and are dead entities unable to perform.  Yes I am sure the Fed, ECB and BOJ will provide liquidity but that will not erase the losses, it will only postpone the pronouncement of death.
  I believe it is VERY important to look at the “direction” that all markets have taken since the Brexit news.  THIS is the direction of Mother Nature versus the direction of the elite controllers.  You can call the moves “out of control” if you wish, the important thing to understand is the control of markets was temporarily lost and went in “bad” directions.  These “bad” directions are your road map as to which direction various assets will move in the upcoming re set.  I say the above with one caveat, capital flowed into U.S. Treasuries and German bunds, a reset will not be kind to the owners of debt from any issuer.
   To finish, clearly today’s unanimous winner in ALL currencies was gold.  As I wrote above, I believe the action today is your road map and a “tell” as to where we are headed.  Financially, the system blew up behind the scenes and we will soon hear “who, where and how much”.   We have gone nearly eight years with “unlimited paper” pushing, pulling and “pricing” markets in directions that supported the Alice in Wonderland world.  The knee jerk reactions you saw today will only become more violent as today was only for starters.  The only question remains, how long can they keep markets open?  The carry trade unwind can only go so far without control being totally lost.  Central banks will be mere straws in a hurricane of fear.  A complete re set of “pricing” is not far off!

  This is a public article.  If you would like to read and hear all of our work, please follow this link to subscribehttps://www.jsmineset.com/membership-account/membership-levels/

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome  bholter@hotmail.com

end

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

:

1 Chinese yuan vs USA dollar/yuan  DOWN to 6.6220 ( DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6438) / Shanghai bourse  DOWN 37.64 OR 1.30%   / HANG SANG CLOSED DOWN 609.21 OR 2.92%

2 Nikkei closed DOWN 1,286.33 OR 7.92% /USA: YEN FALLS TO 102.45

3. Europe stocks opened ALL IN THE RED  /USA dollar index DOWN to 95.78/Euro DOWN to 1.1058

3b Japan 10 year bond yield: FALLS  TO -.150%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 102.45

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  47.70  and Brent: 48.30

3f Gold UP  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil DOWN for WTI andDOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to -.047%   German bunds BASICALLY negative yields from  10 years out

 Greece  sees its 2 year rate RISE to 10.62%/: 

3j Greek 10 year bond yield FALL to  : 8.770%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1315.00/silver $17.97(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 1 & 91 in  roubles/dollar) 65.56-

3m oil into the 47 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.62 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9546 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -/047%

/German 10 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.531% early this morning. Thirty year rate  at 2.399% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

“It’s Scary, And I’ve Never Seen Anything Like It” – Where Markets Are The Morning After

For those of you who are just waking up, first of all, congratulations. Here is what you missed.

European, Asian stocks and S&P futures plummet, as U.K. votes to leave European Union membership. FX carry trades everywhere go haywire, with the Dollar and Yen spiking while the Cable overnight plunged to 30 year lows and at last check was trading just around 1.37, down 1,300 pips from yesterday’s highs. A modest rebound was experienced when first the Bank of England and shortly after all other central banks promised to pump virtually unlimited liquidity into the financial system. Ironically, all of this takes place a day after Fed’s stress tests showing all 33 banks exceed minimum requirements  – we may find out just how “unstressed” they are as soon as today.

For those who are pressed for time, the following quote from James Butterfill, head of research and investments at ETF Securities, summarized it best: “It’s scary, and I’ve never seen anything like it. We’re going to see outflows from basically any kind of cyclical asset. A lot of people were caught out, and many investors will lose a lot of money.”

Here are key market updates:

  • S&P 500 futures down 3.9% to 2023
  • Stoxx 600 down 7% to 322
  • MSCI Asia Pacific down 4.1% to 125
  • US 10-yr yield down 22bps to 1.53%
  • Dollar Index up 1.86% to 95.27
  • WTI Crude futures down 4.2% to $48.00
  • Brent Futures down 4.3% to $48.70
  • Gold spot up 4.2% to $1,310
  • Silver spot up 2.8% to $17.77

TOP NEWS:

  • U.K. Votes for Brexit as Cameron Resigns After Historic Rupture: Prime minister to step down as Johnson weighs next step
  • Pound Plunges to 30-Year Low as U.K. Assets Slide on Brexit: ‘There are certain days you never forget,’ says HSBC’s Bloom
  • Carney Pledges $345 Billion to Fund First Line of Brexit Defense: Markets bets on a July interest rate cut climb to 50%
  • Nationalist Parties Seize on Brexit to Demand Own EU Referendums: Le Pen, Wilders, Northern League call for vote
  • Biggest U.S. Banks Seen Weathering Severe Stress in Fed Test: Regulators release results of Dodd-Frank mandated exercise
  • Oil Tumbles After Brexit Vote as Traders Assess Lasting Impact: WTI, Brent down >6.6% as traders flee risky assets
  • Gold Sees Biggest Gain Since 2008 in Rush for Havens From Brexit: Sterling-denominated gold jumps 15%, the most ever
  • Xerox Appoints Jeff Jacobson as New Chief After Co. Split: Jacobson named as incoming CEO of document technology seller
  • Albemarle, Fortive to Join S&P 500; Emcor Named to MidCap 400: Changes to be implemented after close of trading June 30

WHAT HAPPENED IN EUROPEAN MARKETS:

European shares sinks after U.K. voted to quit the European Union. All 19 Stoxx 600 sectors fall with banks, insurance underperforming and health care, food & beverage outperforming. 90% of Stoxx 600 members decline, 10% gain. “It’s scary, and I’ve never seen anything like it,” said James Butterfill, head of research and investments at ETF Securities, said by phone from London. “We’re going to see outflows from basically any kind of cyclical asset. A lot of people were caught out, and many investors will lose a lot of money.”

As the win for the Leave campaign in the EU referendum became clear, global equities plunged with the FTSE 100 falling as low as 8%, led by sharp losses in financials with UK banks (Barclays, Lloyds, RBS) lower by around 30% which has seen the iTraxx senior financials 5yr index (CDS on banks) soar to its highest level since February. As such, the fear of contagion from this outcome has seen European bourses heavily in the red (DAX -10%, Euro Stoxx -9%), while the E-mini S&P 500 saw a 5% fall to hit limit down.

However, in recent trade, equities have pulled off worst levels as markets find relative calm amid the BoE Governor stating that the central bank is willing to provide liquidity in the form of GBP 250b1n, while David Cameron announced that he will remain as PM till October in order to combat any immediate instability. Elsewhere, Gilt yields have seen its largest drop since 2009 to yet again print fresh record lows as investors flock to safe haven assets, while Bunds staggeringly opened slightly below 169.00 before paring somewhat, back to around 166.00. Of note, in the wake of the Brexit outcome, S&P have warned that the UK could lose its AAA sovereign rating, while the likes of Goldman Sachs, JP Morgan and ING have all forecast an upcoming BoE rate cut.

EUROPEAN DATA:

  • Stoxx 600 down 7% to 322
  • FTSE 100 down 5.3% to 6003
  • DAX down 6.6% to 9579
  • German 10Yr yield down 17bps to -0.08%
  • Italian 10Yr yield up 11bps to 1.51%
  • Spanish 10Yr yield up 11bps to 1.58%
  • S&P GSCI Index down 2.7% to 370.3

EUROPEAN TOP NEWS:

  • Finance Chiefs Dismay Brexit as Bank Stocks Plunge Across Europe: Deutsche Bank CEO calls decision “negative on all sides”
  • SNB Steps Into Currency Market Amid Brexit-Induced Stress: Swiss policy makers have repeatedly threatened interventions
  • German Ifo Confidence Improved Even as Brexit Threat Loomed: Ifo business climate index rises to 108.7 from 107.8
  • Deutsche Boerse Reaffirms Plan to Buy LSE After Brexit Vote: LSE equity holders to own 45.8% of the enlarged company
  • S&P Prepares U.K. Ratings Downgrade as Britain Votes to Leave EU: S&P sees period of uncertainty that may prevail for years
  • Henkel to Buy Sun Products for $3.6 Billion in Biggest U.S. Deal: Deal gives company No. 2 position in U.S. laundry care
  • Rexel Fires CEO Provoost After Disagreement on Governance: Company veteran Patrick Berard named CEO as of July 1
  • Air France-KLM Names Janaillac CEO and Chairman as of July 4: Janaillac to become chairman and CEO from July 4
  • EDF CEO Says Strategy in U.K. Won’t Be Affected by Brexit Vote: Vote has no impact on co.’s strategy, Levy says
  • IAG Sees Brexit Volatility Reducing Profit Growth This Year: No longer sees absolute op. profit increase in FY like ’15

WHAT HAPPENED IN ASIAN MARKETS:

Asian stocks slumps, heading for the steepest drop in 10 months. All 10 sectors drop in the MSCI Asia Pacific Index with materials, consumer discretionary underperforming and utilities, information technology outperforming. Yen briefly surged past 100 as Brexit in Lead in Results. “Fear is normally easier to profit from than greed. This is what we are seeing today,” said Ang Kok Heng, Kuala Lumpur-based chief investment officer at Phillip Capital Management Bhd., which oversees $630 million in Kuala Lumpur.

BoJ Governor Kuroda said he is ready to supply sufficient liquidity and to carefully watch effects on markets.

Risk assets tumbled overnight as the UK vote to leave the EU, which saw FTSE 100 futures briefly decline below the 5800. This also saw losses of around 200 points to the E-mini S&P and crashed Asian equity markets with Nikkei 225 declining as much as 8%, with Osaka futures triggering circuit breakers. Elsewhere, Shanghai Comp and Hang Seng conformed to the global sell-off with UK dual-listed financials including HSBC, Prudential and Standard Chartered under heavy pressure in Hong Kong taking on a likely Brexit. Finally, 10yr JGBs outperformed while T-notes rose around 2.5 points as the Brexit woes spur heavy flows into safer assets which also pushed gold higher by USD 80/oz. Japanese Finance Minister Aso pledged to take measures to calm markets and added that a Brexit will not have a sudden impact on the Japanese real economy.

ASIA DATA:

  • MSCI Asia Pacific down 4.1% to 125
  • Nikkei 225 down 7.9% to 14952
  • Hang Seng down 2.9% to 20259
  • Shanghai Composite down 1.3% to 2854
  • S&P/ASX 200 down 3.2% to 5113

ASIA TOP NEWS:

  • Yen Soars Past 100 Per Dollar as U.K. Vote Spurs Rush to Safety: Currency surges 18% versus pound as Britons choose Brexit
  • Offshore Yuan Drops Most in Five Months as Brexit Victory Looms: PBOC injects most funds this week since April via operations
  • HSBC, Standard Chartered Lead Asia Bank Rout as U.K. Votes ‘Out’: Banks have warned of U.K. job cuts in case of Brexit
  • Brexit Brings Short-Lived Pain for India’s Largest IT Exporters: Cos. may benefit from increased demand in long term
  • Hong Kong’s China Tourist Malaise Deepens From Bling to Buns: Sa Sa profit plunge 54% on poorer cosmetic sales to Chinese

In FX, the aftermath of the UK vote to leave the EU has seen Cable plummeting from its highs, which managed to print a 1.5000 handle before the news starting hitting the wires from the first regions reported. The sell-off led to the key spot rate recording lows around 1.3230, but the fallout has since been tempered, with what is an impressive recovery to within 30 ticks or so of the 1.4000 mark before moving back towards 1.3700. EUR/GBP highs tipped .8300, but London has since seen the cross rate dipping under .8000, but it is all early days as yet. Gains in the JPY and CHF have been notable also, but both the BoJ and SNB will have intervened to some degree — the SNB confirming as much after EUR/CHF well into to the low 1.0600’s. USD/JPY took out 100.00 to print lows ahead of 99.00, but the recovery here —alongside some moderation in equities — has seen the 103.00 attained, but struggling to maintain a foothold here —understandable in the current climate. AUD, NZD and CAD have all lost out, but have been fighting back since —AUD in particular now only 2.5 cents off the overnight highs.

In commodities, heading into the North American crossover, WTI and Brent crude futures remain pressured on the back of the strength in the greenback, as such prices hover below USD 48 and USD 49 respectively. In terms of specific newsflow it has been somewhat muted given the focus revolving around the UK referendum. Separately, gold prices outperformed with participants flocking to safe-haven assets with the precious metal reaching highs of near USD 1360/oz in light of the EU referendum result, before paring some of the moves to head into the North American open around USD 1318/oz.

END

ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN 37.64 POINTS OR 1.30% / /Hang Sang closed DOWN 609.21 OR 0.2.92%. The Nikkei closed DOWN 1,286.33 POINTS OR 7.92% Australia’s all ordinaires  CLOSED DOWN 3.09% Chinese yuan (ONSHORE) closed DOWN at 6.6220 /Oil FELL to 47.80 dollars per barrel for WTI and 48.82 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.6438 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES b) REPORT ON CHINA

 

A very big story!! We are now witnessing a huge increase in Chinese bankruptcies due to their zombie loans outstanding (non performing loans)

(courtesy zero hedge)

Chinese Bankruptcies Surge More Than 50% In Q1; Worse To Come

 

Two months ago, when looking at the soaring number of bond issuance cancellations and postponements as calculated by BofA, we commented that it was only a matter of time before the long overdue tide of corporate defaults, held by for so many years by the Chinese government which would do anything to delay the inevitable, was about to be unleashed.

This prediction has indeed been validated and as the FT reports overnight, Chinese bankruptcies have surged this year “as the government uses the legal system to deal with “zombie” companies and reduce industrial overcapacity as part of a broader effort to restructure the economy.” In just the first quarter of 2016, Chinese courts have accepted 1,028 bankruptcy cases, up a whopping 52.5% from a year earlier, according to the Supreme People’s Court. Just under 20,000 cases were accepted in total between 2008 and 2015.

This is surprising because while China’s legislature had approved a modern bankruptcy law in 2007 it had barely been used for years, with debt disputes often handled through backroom negotiations involving local governments.  “Bankruptcy isn’t just about creditor-borrower relations. It also touches on social issues like unemployment,” said Wang Xinxin, director of the bankruptcy research centre at Renmin University law school in Beijing. “For a long time many local courts weren’t willing to accept them, or local governments didn’t let them accept.”

However, following the dramatic collapse of global commodity prices, which as we showed last October meant that more than half of local companies could not afford to even make one coupon payment with cash from operations, Beijing had no choice but to throw in the towel. And as the FT adds, “bankruptcy courts have been recruited into China’s drive for “supply-side reform”, which centres on reduction of overcapacity in sectors such as steel, coal and cement.”

Still, even with the surge in defaults there are concerns that the bankruptcy law will allow some zombie companies to continue operating. In guidance to lower courts, the supreme court has said they should, where possible, use mergers or restructuring rather than liquidation, in order to allow a company to emerge from bankruptcy as a going concern. This month the court provided several case studies of successful bankruptcies, all of which kept companies in business.

All of this goes back to the core concern and threat facing the Politburo: mass layoffs as a result of liquidating insolvent companies, leading to millions of unemployed, low-skilled workers. It is also why despite all the rhetoric of “reform”, China has been aggressively stoking its credit bubble and pumping trillions in loans into questionable business ventures and insolvent corporations.

For some the surge in bankruptcies is not enough: “We shouldn’t promote simple slogans like ‘use more restructuring and less liquidation’. That’s not really accurate,” said Li Shuguang, professor at the China-EU School of Law at China University of Political Science and Law. I personally think liquidations should be used more. Only enterprises with real value should be saved. The most important [thing] for zombie firms is to liquidate them. Then we can find better ways to deal with laid-off workers, like retraining and re-employment.”

Needless to say, the big risk is what happens in the transition period following the mass liquidations: absent substantial demand growth from offshore, China may find itself in the same predicament as all other developing nations: a structural decline in employment as a result of a secular decline in global growth as the world approaches, if not beaches, it debt capacity.

Experts say most legal bankruptcies involve small or medium-sized enterprises where the social impact is limited. Liquidation-style bankruptcies also far outweigh restructurings in terms of absolute numbers. But courts face strong incentives to keep larger enterprises operating.

In a comparable treatment to US bankruptcy laws, Chinese bankruptcy offers greater protection to borrowers compared with dealing with creditors out of court. Without bankruptcy, a single creditor can block a proposed debt restructuring or writedown, even if most others agree. By contrast, judges have the authority to override holdouts and impose a settlement on all parties.  “Once a court accepts a bankruptcy petition, creditors’ sealing off an office or seizing collateral is immediately halted, so it allows a company to return to production,” said Mr Li.

It also allows China’s massive excess capacity glut to continue, forcing the country to exports its deflation to the rest of the world, and leading to such outcomes as 500% steel duties, currency devaluation, capital outflows, and the pile up of trillions in bad loans: all issues that were front and center for the market in late 2015 yet which, inexplicable, have been deemed resolved, if only for the time being.

end

EUROPEAN ISSUES

 

The BREXIT vote will cause European stocks to make new lows for the next few days according to JPMorgan.  Welcome to the new BREXIT world!

 

(courtesy zero hedge)

 

“We Look For European Stocks To Make New Lows Over The Next Days” – JPM Reacts To The Post-Brexit World

All throughout the artificial short squeeze-driven, central bank-facilitated market rally since the February lows, JPM has been advising clients to sell into the rally. For those few who listened, congratulations. Of course most, who simply rode momentum higher and added, well – we can only hope you have enough in your margin account when the clerks come calling.

And with that said, this is what JPM’s Mislav Matejka happens next after the market’s initial reaction.

  • UK has voted to leave EU. This is an event which will have long-lasting adverse repercussions for the markets, especially for the Eurozone, in our view. Initial reaction is likely to be very negative given the rally  seen over the past few days, and the resulting complacency which set in in the markets.

  • We would look for SX5E to make new lows for the year over the next days. Assuming SX5E P/E multiple at February lows of 11.4x, this would put SX5E at 2600-2650.
  • The initial markets reaction is likely to be very negative, especially given the rally seen over the past few days. Equities should undershoot their last week’s lows, when the betting odds’ probability of Brexit increased. Peripheral equities, which rebounded the most in the last few days, are likely to see the biggest losses in the near term.

  • The key strategy remains to be OW low beta and defensives. We believe bond yields are not going anywhere, but lower – see last week’s report. We are OW Utilities, Real Estate ex-UK, Telecoms, Healthcare, as well as FCF and buybacks baskets.
  • Oil price is down, but we believe Energy will be seen as a defensive in this environment, and remain OW. Energy is a supply driven sector, and typically a low Beta, especially in Europe, with 95% of the sector weight in integrated, big balance sheet plays.
  • On the other side, Banks, periphery and UK domestic cyclicals basket – JPDUKB16 – should be most negatively affected by the result. We remain UW most Cyclicals, in particular Consumer Discretionary.
  • Within a European portfolio, we remain OW UK vs Eurozone, currency hedged. After the initial fall, we think the FTSE100 will be hedged by GBP weakness, as 72% of their sales are derived abroad. UK is an EM play, with 30% sales exposure to the region.
  • We remain OW EM vs DM, and believe that better EM performance will be a positive for the UK. UK is the highest dividend yielding market out of majors, and will benefit from yields moving lower. We expect BoE to move rates down to zero by end August.
  • This could end up being a buying opportunity down the line, especially if the potential policy response to any market dislocation becomes formidable, but not at these levels. Stay cautious and keep reducing.

 

END

 

Merkel, the EU all scramble and ask for calm.  They did not get it

(courtesy zero hedge)

 

The Referen-Doom: EU, Merkel, ECB All Scramble To Calm Panic

In the aftermath of the Brexit vote, the entire concept of a European Union suddenly finds itself existentially threatened, with demands for referenda issued overnight by the Netherlands, France, Italy and moments ago Scotland. This is why all the highest European institutions have been unleashed in an attempt to quell a panic that the EU has never felt, not even during the depths of the recurring Greek insolvency crisis (as we noted last night, it would be ironic if Greece ends up the last country in a European “Union” as all of its peers depart).

Below is the joint statement released moments ago by Europe’s top unelected oligarchs, the ones that the people of UK declared independence day against, including Donald Tusk, President of the European Council, Martin Schulz, President of the European Parliament, Mark Rutte, holder of the rotating Presidency of the Council of the EU, and Jean-Claude Juncker, President of the European Commission, on the outcome of the United Kingdom referendum.

President Tusk, President Schulz and Prime Minister Rutte met this morning in Brussels upon the invitation of European Commission President Juncker. They discussed the outcome of the United Kingdom referendum and made the following joint statement:

 

“In a free and democratic process, the British people have expressed their wish to leave the European Union. We regret this decision but respect it.

 

This is an unprecedented situation but we are united in our response. We will stand strong and uphold the EU’s core values of promoting peace and the well-being of its peoples. The Union of 27 Member States will continue. The Union is the framework of our common political future. We are bound together by history, geography and common interests and will develop our cooperation on this basis. Together we will address our common challenge to generate growth, increase prosperity and ensure a safe and secure environment for our citizens. The institutions will play their full role in this endeavour.

 

We now expect the United Kingdom government to give effect to this decision of the British people as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty. We have rules to deal with this in an orderly way. Article 50 of the Treaty on European Union sets out the procedure to be followed if a Member State decides to leave the European Union. We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union. Until this process of negotiations is over, the United Kingdom remains a member of the European Union, with all the rights and obligations that derive from this.  According to the Treaties which the United Kingdom has ratified, EU law continues to apply to the full to and in the United Kingdom until it is no longer a Member.

 

As agreed, the “New Settlement for the United Kingdom within the European Union”, reached at the European Council on 18-19 February 2016, will now not take effect and ceases to exist. There will be no renegotiation.

 

As regards the United Kingdom, we hope to have it as a close partner of the European Union also in the future. We expect the United Kingdom to formulate its proposals in this respect. Any agreement, which will be concluded with the United Kingdom as a third country, will have to reflect the interests of both sides and be balanced in terms of rights and obligations.”

Then there was the ECB’s Nowotny who likewise pretended that things are ok, when in reality they will never again be the same:

  • NOWOTNY: THE MARKETS WERE SURPRISED BY BREXIT
  • NOWOTNY: AT THIS POINT WE ARE AGAIN SEEING STABILIZATION
  • NOWOTNY: CAN’T COMPARE CURRENT SITUATION WITH LEHMAN
  • NOWOTNY: NEGATIVE BUT LIMITED EFFECT ON SOUTHERN EMU SOV PAPER
  • NOWOTNY: IF BANKS HAD BREXIT TROUBLE,ECB WLD PROVIDE LIQUIDITY
  • NOWOTNY: PANIC IS ABSOLUTELY NOT JUSTIFIED

Right:

 

Meanwhile, confirming that the UK move was correct and that the UK will have a full victory, Handelsblatt reported that Germany just blinked first:

  • PAPER: GERMANY TO SEEK ASSOCIATE STATUS FOR UK VIS-A-VIS EU
  • PAPER:GERMANY AGAINST AUTOMATISM ON UK ACCESS TO EU INTRNL MKT

Finally, there was the queen herself, Angela Merkel, who suddenly sees not only her kingdom but her “United Europe” legacy falling apart before her eyes.  And so a gusher of Soviet-style propaganda has been unleashed:

  • MERKEL CALLS FOR CALM, MEASURED EU RESPONSE TO BREXIT VOTE
  • MERKEL: NEED TO MAKE SURE PEOPLE UNDERSTAND BENEFITS OF EU
  • MERKEL: EU GUARANTEES PEACE AND PROSPERITY
  • MERKEL: INVITED EU TUSK, FRANCE HOLLAND, ITALY RENZI TO BERLIN

As MarketNews adds, Merkel urged a calm reaction to the Brexit vote Friday, announcing a high-level meeting Monday to prepare for the EU Council gathering the following day. Giving an ad-hoc statement to the press at the Chancellery in Berlin, Merkel said she would meet with EU Council President Donald Tusk, France’s President Francois Holland and Italy’s Prime Minister Matteo Renzi Monday in Berlin to hold talks about the Brexit issue and present the talks’ results to the EU Council, to be held next Tuesday and Wednesday in Brussels.

“We are taking note of the UK decision with great regret,” Merkel said, explaining that the consequences of the UK decision “over the next days, weeks and months” would depend on the EU’s ability to make calm and joint decisions.

Noting growing doubts about the EU across Europe, Merkel said it was important to explain the EU’s benefits to the public, saying the bloc was “our guarantor of peace and prosperity.” Merkel also announced she will lay out the German government’s next steps with respect to Brexit in a speech at the German parliament next Tuesday.

* * *

Whether, and how long, Europe will exist in its current format after last night’s historic event is unknown. One thing is known: there is one very clear victor from the perilous state Europe has suddenly found itself in.

 

END

 

Now it is Italy’s turn to launch a referendum campaign in conjunction with Northlern League and 5 Star

(courtesy zero hedge)

Italy’s Northern League To Launch EU Referendum Campaign Next

Shortly after the final Brexit result was released, first Netherlands and then France quickly warned they too would proceed with their own referenda. They are not alone: moments later the head of Italy’s Northern League Said “Now it’s our turn’ After U.K.

As Dow Jones reports, Italy’s anti-immigrant and euroskeptic Northern League will start a petition calling for a law that allows a referendum on whether the country wants to exit the European Union, its leader said on Friday. In a news conference following the announcement of the U.K.’s decision to leave the EU, Northern League’s head Matteo Salvini said that it was time to give Italians a vote on their EU membership, as the citizens of Britain have just done.

“This vote was a slap in the face for all those who say that Europe is their own business and Italians don’t have to meddle with that,” Mr. Salvini said.

The Northern League launched a campaign against the euro in 2014, but it has been since overshadowed by the anti-immigrant campaigns on which it has built up its electoral support.

Northern Leage is not alone: recall that earlier this week, the anti-establishment 5 Star Movement, emboldened by dramatic victories in Italy’s recent mayoral elections in which Virginia Raggi, a 37-year old lawyer, was elected Rome’s first female mayor by winning a stunning 67% of the vote in the second round, also revived plans for a referendum on leaving the euro.

The movement launched a campaign for a referendum on the euro in 2015 and collected more than 100,000 signatures calling for such a vote.

Even so, the campaign may be moot: the Italian constitution, however, does not allow the cancellation of international agreements through a referendum.

However, even a purely symbolic vote to exit the EU or eurozone would put pressure on the Italian government, led by Matteo Renzi. He has consistently made a pro-European stance.

It will be interesting if anti-European sentiment is as prevalent in Italy as it is in the UK – leaving the euro doesn’t seem a popular option among Italians. According to a poll conducted by pollster SWG in March, 61% of Italians support remaining in the euro area and acknowledge the benefits of being part of it.

 

END

 

Thomas Cook runs out of Euros

(courtesy zero hedge/)

 

British Money-Changer Imposes Capital Controls, Suspends Online FX Transactions

Yesterday it was physical lines as people ‘queued’ for hours to exchange their pounds sterling for anything else.

Perhaps more should have done the same and exchanged their far more valuable – yesterday – pounds sterling, than waiting until today’s historic devaluation.

Not only that, but they may not be able to do it today. As The FT reports UK-based travel group Thomas Cook has suspended its online currency purchases and imposed a £1000 limit on transactions at its high street branches due to an unforseen demand for euros, a soft form of capital controls as FX service providers run out of “harder” currencies.

Having alreay warned yesterday that…

 “There’s been a surge in customers buying euros in the last six weeks and euro sales have been consistently strong, building day by day.”

… The leading money-changer’s statement added today:

We have temporarily suspended our travel money website following unprecedented customer demand for foreign currency overnight and this morning.

 

We apologise to all customers affected.

 

Our immediate priority is to ensure that we have enough currency in store to fulfill outstanding orders.

 

We hope to be back up and running as soon as possible.

Is this the beginning of more than just “soft” capital controls?

end The following is a huge commentary from RBC’s Charlie McEllligott. This morning as he awoke he quickly saw massive losses on equities: First from Asia (e.g. Nikkei down 8%) and then his own Europe equities (down 8 to 12%) and then he noticed huge increase in peripheral yields in Spain, Portugal and Italy.  We put two and two together and said that we had massive derivative losses underwritten by our huge banks. and this was a SIGMA SIX event (tail probability gone bad).  Today Deutsche bank along with other bankers collapsed in price! a must read… (courtesy Charlie McElligott/RBC/zero hedge) “Lights Out Stories Making The Rounds On Huge Losses”

Some thoughts on markets from RBC’s Charlie McElligott

“CORRELATIONS GO TO ONE” ON BREXIT NAPALM

QUICK UPDATE:

Pockets of risk are notably higher off the initial “shock” levels seen last night (i.e. GBP trading back to 1.388 last from 1.323 low / JPY to 103.1 last from 99.0 low / FTSE from -8.7 to now “just” -5.1% / SPX at worst -120 handles to 1999, now 2032 last), as tactical market participants front-run expected liquidity injections and interventions from CB’s to either ‘dip buy’ for a trade, or sell into.

Nonetheless, the ‎psychological damage overnight is simply jarring, and the long-term implications of the first domino in a potential “unwind” of globalization / shift to populism / protectionism / nationalism (see every nationalist right party calling for referendums throughout their respective countries in the EU) plays-out against a trading world lulled to sleep by the siren-song of “free carry,” low vol and leverage.  As stated last week, when people, goods and money are unable to move freely, it’s a global growth negative, period.

COMMENTARY:

Just…wow. The “left tail” scenario has played-out, and now, we are in the midst of a real-time “Minsky Moment” in Europe.

The UK has voted to leave the EU, shocking pollsters, book-makers, statisticians and–even just a handful of hours ago–the universal “market” embrace‎ of an assumed “remain” scenario. I was part of that complacency.  On account of this “all clear” view, many market participants had spent much of this past week “grossing back up.”

The market carnage is staggering with regards to the violence seen in such a short period of time, as the stress and convexity of the move is exacerbated by the inability and unwillingness of market-makers to provide liquidity. There are few bodies capable of catching the falling knife right now, which has been the exact “unintended consequences” of post-crisis regulation that banks and brokers have warned about. Markets could SURE use that dealer balance sheet, prop desk or stat arb market-making book to mitigate such exaggerated price-action, i.e. JPY moving 450pips in about 7 seconds last night when it made absolute lows.

Moves of this magnitude are pure reads on “force outs”…that wasn’t discretionary selling / covering, as NOBODY was positioned for this.  The tide has “gone out”…and we are about to see who’s been swimming naked.

It’s “game over” for anybody out there who was short duration.  ‎CTA’s / systematic trend strategies / managed futures funds / Crude and FX carry traders–all of whom exist on leverage–here comes “Mr Margin” calling on your risk longs.  Obviously the “long cyclical beta” equities trade, which has been the basis of the recovery off the February lows, is about to come unglued when the US opens.  Bank options dealer desks who by definition are “short volatility,” as well as many clients who’ve made a living shorting vol in the post-GFC era as well–there are going to be some “lights out” stories making the rounds on huge losses…very scary stuff. 

LARGEST OVERNIGHT MOVERS ON Z-SCORE BASIS: EU-centric obviously, but the drag-down implications of the Dollar move higher (see: crude and EMFX) are very troubling.

 

And don’t sleep on EU credit, where both SubFin and Xover are seeing 3.5+SD moves (SubFin just behind Lehman for all-time largest % one day move).

 

WHAT IS MOST “AT RISK”?: EU periphery equities (BANKS BANKS BANKS SX7E now -16.3% on day and 32.7% YTD, along w/ consumer discretionary), Eu peripheral Bonds (BTPs and Bonos), EU FX (Sterling resets to a new level in light of current acct deficit, Euro resets on existential risk uncertainty freezing the entire union economy), EMFX breakdown on USD move and leveraged deployed in space, and flight to safety in Yen and Franc crushing Japanese and Swiss exporters and thus local stock markets.

-WHERE DOES THE $ GO?: Gold and all things US—UST’s, USD, even US equities (not immediately of course, but eventually on relative basis) seeing enormous safe haven bid.  “Low vol” / “anti-beta” market neutral / defensive sectors like utes, staples, telco and sleepy healthcare will obviously outperform against aforementioned cyclicals, beta, consumer discretionary and financials.

-WHAT MIGHT BE DIP-BUYABLE A LITTLE CLOSER TO THE “HOT ZONE”?: There will be support “at a price” on the ability for ECB to intervene in EU credit and periphery sovereigns (although CDS will u/p cash bonds)…but that is real “Kevlar gloves” trading with tight stops.

-RETURN OF THE DEFLATION TRADE: Dollar strength should be absolutely crushing for crude / commods / EM, as the deflation trade spectre rears its head again.  Difficult to touch any of this stuff for a long time as I anticipate persistent weakness in Euro continuing to help strengthen the Dollar.

So is there any silver-lining here? Most likely, all the “bad news” is out there for now as we enter the haze of the article 50 / Lisbon Treaty “trigger” (3 month lag while PM Cameron transitions the government) and an ambiguous negotiated withdrawal that follows.

Now, we watch for “market stabilizing forces”–central banks, FX and pension rebalancers, corporates hedgers etc–to “do work.” IT’S TIME TO BE AWARE OF UPSIDE “GAP RISK” NOW AS THESE PLAYERS ARE FORCED INTO ACTION. Even more obvious are the conditioned “dip buyers” who are already front-running the above inevitable action.

WHAT ARE NEXT MOVES / THOUGHTS / QUESTIONS?:

-BoE rate cut just a matter of time…

-Coordinated liquidity‎ CB swap lines…

-Fed inability to act preemptively with a cut of their own as it’s not a local issue.  QE4 not relevant as rates have only plummeted lower. Tough spot for Yellen.

-What’s the PBoC to do?‎  Yuan fixes at weakest level against the Dollar since Jan ’11.  Watch this. 

-Govts intervening in FX mkts‎ real-time, esp the Swiss National Bank, and EM’s (south Korea, India and likely Singapore already), with risk of BoJ soon…

Welcome to your summer.

GLOBAL ISSUES

Central bankers around the globe scramble to defend markets as dollars flee all markets. Derivative losses are enormous

(courtesy zero hedge)

 

Central Bankers Around The Globle Scramble To Defend Markets: BOE Pledges $345BN; ECB, Others Promise Liquidity

There was a reason why we warned readers two days ago that “The World’s Central Bankers Are Gathering At The BIS’ Basel Tower Ahead Of The Brexit Result“: simply enough, it was to facilitate an immediate response when a worst-cased Brexit vote hit. And that is precisely what has happened today in the aftermath of the historic British decision to exit the EU.

It started, as one would expect, with Mark Carney who said the Bank of England is ready to pump billions of pounds into the financial system as he stands at the front line of Britain’s defense against a Brexit-provoked market crisis. The BOE governor declared that the central bank can provide an extra 250 billion pounds ($345 billion) through its existing facilities. It also has further measures if needed to deal with what he described as a “period of uncertainty and adjustment” after Britons voted to end their 43-year membership of the world’s largest single market.

The pound plunged to a three-decade low, British and global stocks tumbled and European bond spreads widened as the Brexit vote unfolded on Friday. Investor bets on a July interest-rate cut rose and Standard & Poor’s said the U.K. will lose its top credit rating.

Some market and economic volatility can be expected as this process unfolds,” Carney said in a televised statement in London after the referendum result. His comments followed Prime Minister David Cameron’s announcement that he will step down this year, which will inject political uncertainty into an already volatile period. His full announcement is below and his statement can be found here:

 

More from the central bank governor who is now scrambling to undo all the scaremongering he had unleashed to prevent precisely this outcome:

But we are well prepared for this.  The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning. The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.

These adjustments will be supported by a resilient UK financial system – one that the Bank of England has consistently strengthened over the last seven years. The capital requirements of our largest banks are now ten times higher than before the crisis.

The Bank of England has stress tested them against scenarios more severe than the country currently faces. As a result of these actions, UK banks have raised over £130bn of capital, and now have more than £600bn of high quality liquid assets.

* * *

In the coming weeks, the Bank will assess economic conditions and will consider any additional policy responses.

* * *

A few months ago, the Bank judged that the risks around the referendum were the most significant, near-term domestic risks to financial stability.

To mitigate them, the Bank of England has put in place extensive contingency plans.

These begin with ensuring that the core of our financial system is well-capitalised, liquid and strong. This resilience is backed up by the Bank of England’s liquidity facilities in sterling and foreign currencies.

 

All these resources will support orderly market functioning in the face of any short-term volatility.  The Bank will continue to consult and cooperate with all relevant domestic and international authorities to ensure that the UK financial system can absorb any stresses and can concentrate on serving the real economy.

 

That economy will adjust to new trading relationships that will be put in place over time.  It is these public and private decisions that will determine the UK’s long-term economic prospects.

 

The best contribution of the Bank of England to this process is to continue to pursue relentlessly our responsibilities for monetary and financial stability. These are unchanged.

We have taken all the necessary steps to prepare for today’s events. In the future we will not hesitate to take any additional measures required to meet our responsibilities as the United Kingdom moves forward.

As Bloomberg adds, The BOE has been preparing for more than a year to deal with this outcome and Carney will now have to rely on that crisis playbook to stem panic in financial markets. With the result announced on a normal trading day, the immediate threats of Brexit could include investors dumping U.K. assets and a drying up of bank funding.

The BOE “has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks,” it said in a statement early Friday. “The Bank of England will take all necessary steps to meet its responsibilities for monetary and financial stability.”

Bank of Japan Governor Haruhiko Kuroda said on Friday that central banks will do their utmost to provide liquidity. Central banks around the world have been on high alert, and the chiefs of the Fed, BOJ, the Bank of Canada and the Swiss National Bank cited the referendum as being potentially disruptive.

As well as intensive supervision to ensure banks had enough cash ahead of the vote, BOE plans include additional funding operations and activation of swap lines with other central banks to help firms access overseas currencies. It also has a number of other “stability measures” available, though policy makers haven’t provided details in advance.

What happens next depends on how markets play out . At the time of the Scottish independence referendum in 2014 – where a potential splintering of the U.K. was averted – the BOE’s Financial Policy Committee emphasized readiness to “take steps rapidly” if needed.

So far, after both stocks and FX plummeted, there has been a modest rebound from historic lows, which saw the British pound drop to 31 year lows as risk assets already start to anticipate concrete action. The BOE has already added extra auctions this month to make funds available to lenders. It could cut its key interest rate to as low as zero from 0.5 percent, perhaps immediately, analysts at ING Bank NV said in a note to clients. Traders are now pricing in a more than 50 percent chance that the BOE will cut borrowing costs by its July meeting.

Beyond the immediate market ructions, there are longer-term policy issues. While Carney’s view was that the next BOE interest-rate move is “more likely to be up than down,” that was conditioned on a “Remain” decision. Recent signs have pointed to an economic slowdown, and the possible consequences of Brexit may include a spike in inflation, a rise in unemployment and even a recession. The BOE potentially faces what Carney has described as a “challenging trade off” between supporting growth and employment and stabilizing inflation.

The central bank has cited the U.K.’s record current-account deficit as a potential vulnerability, saying “an abrupt decline in capital inflows could pose a major financing difficulty.” Data in March showed the difference between money coming into the U.K. and money sent out widened to 32.7 billion pounds ($43.3 billion) in the fourth quarter. That equates to 7 percent of GDP, the most since records began in 1955.

* * *

It wasn’t just Carney.  Central banks across the world shifted into crisis-management mode, as the U.K.’s vote to leave the European Union tipped markets into turmoil and cast a pall over the already-weak outlook for global growth.

Officials in London, Frankfurt and Zurich are having to take the baton in the efforts to control the turmoil from Asian central banks, where the Bank of Japan reiterated its readiness earlier on Friday to intervene to hold down the yen, as investors sought refuge from plunging asset prices in Europe. Beyond the initial gyrations, central banks will face questions over how they can support growth and hit inflation targets at a time when policy instruments are already stretched.

Bank of Japan Governor Haruhiko Kuroda and Japan’s Finance Minister Taro Aso, whose country currently heads the Group of Seven, highlighted that central banks of six major developed nations have currency-swap lines at the ready to provide liquidity. Those lines, among the Japanese, U.S., euro-region, U.K., Swiss and Canadian central banks, were set up during the global financial crisis and made permanent in 2013. G-7 officials will speak by phone some time after midday European time, according to two people familiar with the matter, who declined to be identified because the talks are private.

The swaps will probably be activated, at least in London, Krishna Guha, the vice chairman of Evercore ISI in Washington who previously worked at the Federal Reserve Bank of New York, wrote in a note. “While there will be a G-7 statement and possibility of coordinated international intervention if currency markets become dysfunctional, we think the bar for such joint intervention is high and suspect that we may get unilateral action.”

South Korea and India were among those reported to have intervened in an effort to smooth trading in their currencies, while analysts said Denmark probably did the same and those including Singapore could step in. Kenya’s central bank said it was ready to temper market volatility, while counterparts including Thailand said they were monitoring the situation in their locations.

Eight years after the start of the global credit crisis, the post-Brexit turmoil seemed set to unleash a further wave of monetary easing, potentially including in the U.K. itself. Economists in research notes Friday highlighted that the People’s Bank of China could act, either through intervention to prop up its currency or potentially with a cut in the required reserve ratio for its commercial banks.

The Bank of Japan was already forecast to step up monetary easing at its policy meeting next month, with an historic surge in the yen serving to underscore that call. Aso, the finance chief, told reporters that stability in the foreign-exchange market is very important and that markets have been extremely jittery, with rough moves. He highlighted Japan’s concern about the impact of the Brexit vote on the global economy and said “we will respond properly if needed.”

Then, moments ago, the ECB issued a widely anticipated statement as well. This is what it said in the tersely worded and vague press release:

ECB is closely monitoring financial markets

 

  • European Central Bank is closely monitoring financial markets
  • ECB continues to fulfil its responsibilities to ensure price stability and financial stability in the euro area

 

Following the outcome of the UK referendum, the European Central Bank (ECB) is closely monitoring financial markets and is in close contact with other central banks.

 

The ECB stands ready to provide additional liquidity, if needed, in euro and foreign currencies.

 

The ECB has prepared for this contingency in close contact with the banks that it supervises and considers that the euro area banking system is resilient in terms of capital and liquidity.

 

The ECB will continue to fulfil its responsibilities to ensure price stability and financial stability in the euro area.

But the main question everyone will want answered is what the Fed will do: a Fed who rate hiking cycle is now officially dead, and the question is when the next rate cut, or outright QE will take place.  As Bloomberg notes, for the Federal Reserve, the unsettled markets justified its decision to hold off on raising interest rates this month. U.S. stock-index futures were among those tumbling Friday, and the dollar climbed against all major currencies save the yen. U.S. Treasuries jumped.

“The Fed will want to see the impact from the U.K. vote before considering resuming rate rises so a July move looks very unlikely now,” a Mansoor Mohi-uddin, a Singapore-based strategist at Royal Bank of Scotland Group Plc. “The dollar, however, is likely to keep gaining across the board as foreign central banks consider rate cuts or FX intervention.”

We expect Yellen to make a statement shortly after, or perhaps before, the market open to do the one thing central banks do so well… perhaps the only thing: stabilize markets.

 

end

 

The G7  and the IMF join central bankers to try to calm markets to no avail

(courtesy zero hedge)

 

G-7, Central Bank Governors, Christine Lagarde Issue More Statements To Calm Markets

Showing once again that the world’s elite has not learned any lessons from the UK Brexit, instead of focusing on the core issue at hand, namely the deterioration of the living standards of the developed world’s middle class, the world’s political and financial elite is instead scrambling to calm down global markets, i.e., assuage the fears of the 1%.

Moments ago the G-7 issued the following statement:

Statement of G-7 Finance Ministers and Central Bank Governors(June 24, 2016?

 

We, G7 Ministers and Governors, respect the intention expressed today by the people of the United Kingdom to exit from the European Union. We are monitoring market developments following the outcome of the referendum on the UK’s membership of the EU.

 

We affirm our assessment that the UK economy and financial sector remain resilient and are confident that the UK authorities are well-positioned to address the consequences of the referendum outcome.

 

We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.

 

G7 central banks have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end.

 

We will continue to consult closely on market movements and financial stability, and cooperate as appropriate.

 

We remain united and continue to maintain our solidarity as G7.

This was followed immediately after the IMF’s Christine Lagarde doing more of the same. As MNI reports, after warning of the consequences to the UK and global economies of an exit from the European Union, International Monetary Fund Managing Director Christine Lagarde in the wake of decision Friday urged the UK and EU to ensure that the transition is smooth, and said the fund stands ready to support members as needed.

“We urge the authorities in the U.K. and Europe to work collaboratively to ensure a smooth transition to a new economic relationship between the U.K. and the EU, including by clarifying the procedures and broad objectives that will guide the process,” Lagarde said.

“We strongly support commitments of the Bank of England and the ECB to supply liquidity to the banking system and curtail excess financial volatility,” she said, adding, “We will continue to monitor developments closely and stand ready to support our members as needed.”

The vote to leave the EU does not impact the UK membership in the IMF, which just last week warned “the net economic costs of an exit are likely negative and substantial, though there is significant uncertainty about their precise magnitude.”

* * *

Perhaps the thinking goes that unless biotech stocks close green on the day with every central bank in the world rushing to support the highest beta stocks, even more people will get angry at an elite that only cares about where biotech stocks close on the day…

 

end

 The following commentary is a biggy!  RCB’s Charlie McElligott stated today there there is a huge tail risk or in other words, a massive sigma six event.  He states that today was the appetizer.  Monday is for real (courtesy zero hedge/Charlie McElligot/RCB) “Today Is The Appetizer For Monday”

Early this morning we laid out the thoughts of RCB’s Charlie McElligott on today’s dramatic market action, which discussed not the blow up of “fat tail” quant stategies (something we touched upon later and which is likely to unleash even more quant-driven selling next week) and the “forced out” liquidations across the curve coupled with a rush into safety, but also the biggest question of all for today’s trades – which macro funds are quietly blowing up?  Now, we follow it up with a second piece by the RBC trader, one which those worried about being caught long risk over the weekend, are urged to read.

* * *

TODAY IS THE APPETIZER FOR MONDAY

The early macro trade has been focused on two things:  1) the outstanding performance of credit early (even before the stock rally as HY, IG and Converts all saw size “offers wanted” around Street from real $ and credit HFs) and 2) monetization of downside hedges from select macro funds in stocks and GBP (and then seeing those same accts turn and buy upside calls) as the driver of this phenomenal 60-plus handle rally in Spooz off the lows / pairing-back of half the collective loss in liquid EU equities indices / 500 pip recovery in GBP off lows.   Same with VIX as a derivative of that too, where profit-takers in their upside vol bets have made the VIX a one-way trade lower today (or V2X which is EU’s version of VIX and was +32% at one point today….now just +6%).  Similarly with regards to “monetization of winners,” USTs options are seeing ‘like’ flows—extremely profitable liquidation of TY calls, contributing the the move higher in UST 10Y yields +17bps off the lows).

There are some who are pounding-table for another leg-down in risk, but now that we’ve just cleared the first hour, I’m seeing INCREASED client activity (after almost consensual “avoiding the noise of the cash open” feedback earlier), and it’s significantly “better to buy.”  We’re now running at 280% of the 20adv (notional) on the US cash desk, and sit at 64.2% notionally better to buy.  By the way, the longer we go on without seeing a “rollover” in Spooz, you’ll see further capitulation from overnight futures shorts who are already way upside-down.

I do feel that Monday is where we’re going to see a truer-look at “where the bodies are buried” and a more accurate “price discovery” process than what we’re seeing today (as we’re washing out all the delta one flows which are dwarfing client trading)…lots of discipline being displayed thus far, with low turnovers and folks not chasing.

  • FTSE (UKX, benchmark equities index) is an absolute CHAMP right, trading -8.7% within the first 10 minutes of the open before clawing-back to all but -1.9% at ‘highs.’  Wrap your head around this: week-to-date, UKX is up over 2.8%!  What’s the driver of today’s massive rally?  People are getting their arms around the impact of this extraordinarily weak Sterling as a backdoor stimulus for exporters (ironic the power of what a departure from the EU can do vs what x # of kagillions of QE purchases couldn’t get done) and the inevitable rate cut from the BoE.
  • What I have to continue keeping one eyeball on is SX7E (EU banks index); the thing cannot get off mat.  And if that can’t get off the mat, peripheries (and their sovereign debt) won’t either, as we re-enter the EU-crisis-era “Doom Loop” where widening sovereign spreads drag down the banks who are stuffed to the gills with them….vicious cycle, what else is new.  FWIW, as I write and we’ve had this massive bounce in equities, Italian stocks (FTSEMIB) are back at their lows. This will likely be the next “hot zone” as we begin playing EU existential dominos (Spanish elections Sunday too).
  • My model Equity L/S portfolio is -285bps today.  That is NOT cool.  Elsewhere, from a thematic or factor perspective, we see the implications we spoke about earlier of the RAGINGLY STRONGER DOLLAR smashing the reflation / cyclical beta trade (value, energy, beta all struggling, while momentum mkt neutral works with defensive longs + and fins / biotech / energy -):

 

NOT A GOOD LOOK FOR EU BANKS / ITALIAN EQUITIES: No bounce.


 

 

end

 

And Nomura warns the same:  do not underestimate the global contagion from a BREXIT:

(courtesy Nomura/zero hedge)

 

Nomura Warns “Do Not Underestimate The Global Contagion” From Brexit

In a nutshell, Nomura expects the global impact of the Brexit to be more through the financial, confidence and psychology channels than simply through trade. Their warning is to not underestimate the depth and reach of global financial market contagion, which seems to have increased since 2008…

To assess the global impact of this surprise result, it is important to look beyond the trade channel. Once the financial, confidence and psychology channels are taken into account our warning is to not underestimate the depth and reach of financial market contagion to Asia.

A globally coordinated central bank response to a global financial market meltdown is quite likely, such as liquidity support through FX swap arrangements and possible FX intervention, but with policy credibility at such a low it is unclear how successful these emergency measures would ultimately be when there is extreme market risk aversion.

Do not underestimate the global contagion

At first glance, it would seem that the financial and economic impact of this result should be largely confined to the UK, given that its economic size is quite small at less than 4% of world GDP and world imports in 2015. However, we believe that this is too simplistic of a view and that the impact of the Brexit will be far reaching and long lasting, for two main reasons.

First, we expect non-trivial spillover to the euro area economy and financial markets. While the value of merchandise exports from the rest of the EU to the UK is only 3% of the rest of the EU’s GDP1, the UK’s position as a global financial hub – UK financial sector assets account for more than 8x its GDP – leaves the rest of the EU much more exposed to the UK in terms of financial and investment linkages, in part reflecting the UK’s relatively liberalised domestic market and its strong legal framework and institutions.

For example:

  • One-third of the UK’s financial and insurance services exports are to the EU
  • More than half of the UK banking sector’s cross-border lending is directed to the EU
  • Almost half of the foreign direct investment received by the UK comes from the EU2

In addition, Brexit could further inflame anti-EU sentiment in other EU member states, heightening fears of more countries opting to leave the union. It is largely due to these non-trade-related channels that we expect a reduction in euro area GDP growth by 0.5 percentage points (pp) and a weaker EUR/USD.3 While UK share of global GDP is less than 4%, the rest of EU’s share is 18%, so once second-round effects on Europe are taken into account, the global impact is no longer trivial.

Extreme uncertainty is an anathema to financial markets

This extreme uncertainty in the City of London, one of the world’s largest financial centres, is anathema to global financial markets, especially when the global economy is as fragile as it isand as there are limited monetary and fiscal policy easing buffers available to most of the world’s major economies.

At this early stage, great uncertainty exists over just what the Brexit will ultimately mean for the UK economy. For example, how soon and how successful will the UK be able to negotiate with the EU the terms of its withdrawal, and renegotiate trade relationships with 60 non-EU economies where trade is currently governed by EU relationships? Will there be constitutional havoc in amending legislation from EU law to UK law? Will Scotland push for another referendum on independence? Heighted uncertainty and risk aversion is likely to discourage new investment in the UK and weigh on consumer sentiment. The danger is that all these factors – rising inflation, falling asset prices, high uncertainty and weakening private domestic demand – reinforce each other in a downward spiral, dwarfing any positive impetus from a more competitive exchange rate or monetary and fiscal policy easing.

The psychological impact – a link to the US elections

Moreover, one should not underestimate the psychological impact and how quickly markets could link the outcome to a rising risk of Donald Trump winning the US presidential election. As Anatole Kaletsky warned in an article on Project Syndicate (see Brexit’s impact on the world economy, 17 June 2016), the UK referendum is part of a global phenomenon – the rise of nationalist sentiment and populist revolts against established political parties. The demographic profile of Brexit supporters is found to be strikingly similar to that of American Trump supporters. The opinion polls are also strikingly similar: The UK polls showed the Brexit and Bremain camps to be close to neck and neck going into the referendum, as are the US polls on the two main US presidential candidates, Trump and Hilary Clinton.In contrast, investors, judging from recent price action, did not anticipate a Brexit, and option pricing suggests markets are also discounting a Trump victory. The UK betting markets too have downplayed the results of opinion polls: the odds of Brexit were generally about 1-in-3, similar to what US betting markets assign to a Trump victory.

The surprise Brexit result should now increase the credibility of opinion polls – they had indicated a much closer race than the odds published by bookmakers – in gauging how people actually vote. Statistical theory even allows us to quantify how expectations about the US presidential election should shift following the Brexit wins in Britain. To quote Kaletsky, imagine “for the sake of simplicity, that we start by giving equal credibility to opinion polls showing Brexit and Trump with almost 50% support and expert opinions, which gave them only a 25% chance. Now suppose that Brexit wins. A statistical formula called Bayes’ theorem then shows that belief in opinion polls would increase from 50% to 67%, while the credibility of expert opinion would fall from 50% to 33%.” The upshot is that investors are likely to take the results of opinion polls more seriously now and, as such, financial markets could start pricing in a greater risk of a Trump victory in the 8 November election and, possibly, a greater chance of populist insurgencies in the rest of Europe.

The financial tail wagging the real economy dog

In a nutshell, we expect the global impact of the Brexit to be more through the financial, confidence and psychology channels than simply through trade. Our warning is to not underestimate the depth and reach of global financial market contagion, which seems to have increased since 2008. For instance, during the European crisis of 2011, when there were significant fears of EU breakup, Asia’s stock and bond markets became much more highly correlated to the Euro Stoxx 50 and the German government bond yield than over 2000-07 (Figures 1 and 2). And as Hyun Song Shin, economic advisor and head of research at the BIS, recently described it (see Global liquidity and procyclicality, 8 June 2016), “the real economy appears to dance to the tune of global financial developments rather than the other way around”, through wealth, confidence, loan collateral and liquidity effects.

Granted, one potential cushion to a global financial market selloff is expectations of a further delay in the next Fed rate hike, but markets have already significantly priced out Fed hikes for this year (following the Brexit outcome, the market is now pricing a mere 6% likelihood of a Fed rate hike in 2016, down from 58% prior to the EU referendum).

Our US team now believes that the most likely timing of the next Fed rate hike is December (see Policy Watch: Brexit vote will likely delay FOMC rate hike, 24 June 2016). Instead, we believe that the more dominating factor will be renewed concerns over global growth and a likely stronger USD – together they are likely to cause oil prices to continue falling, adding more fuel to the fire of a major risk-off event in emerging markets. A globally coordinated central bank response to a global financial market meltdown is quite likely, such as liquidity support through FX swap arrangements and possible FX intervention, but with policy credibility at such a low it is unclear how successful these emergency measures will ultimately be when there is extreme market risk aversion.

Source: Nomura

 

end

OIL ISSUES After three weeks of increases, finally we see a decline of 7 rigs this week (courtesy zero hedge)

US Oil Rigs Decline Most In Six Weeks

After 3 straight weeks of rig count increases, US oil rigs declined 7 to 330 this week – the biggest drop in 6 weeks – sparking a very modest rise in WTI Crude.

Biggest decline in oil rigs in six weeks…

 

And oil jumped a smidge…

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

Euro/USA   1.1058 DOWN .02699 ( REACTING TO BREXIT)

USA/JAPAN YEN 102.45  DOWN 2.46 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.3711 DOWN .0833 ( BREXIT)

USA/CAN 1.3051 UP .0236

Early THIS FRIDAY morning in Europe, the Euro FELL by 270 basis points, trading now JUST above the important 1.08 level FALLING to 1.1058; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED DOWN 37.64 POINTS OR 1.30%   / Hang Sang CLOSED DOWN 609.21 POINTS  OR 2.92%   AUSTRALIA IS LOWER BY 3.09%/ EUROPEAN BOURSES ARE ALL IN THE RED  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this THURSDAY morning: closed DOWN 1,286.33 POINTS OR 7.92% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 609.21 POINTS OR 2.92% . ,Shanghai CLOSED DOWN 37.64POINTS OR 1.30% / Australia BOURSE IN THE RED: (RESOURCES UP)/Nikkei (Japan) CLOSED  IN THE RED/India’s Sensex IN THE RED

Gold very early morning trading: $1317.60

silver:$17.92

Early FRIDAY morning USA 10 year bond yield: 1.531% !!! DOWN 22 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.3999 DOWN 15 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early THURSDAY morning: 93.78 DOWN 257 CENTS from WEDNESDAY’s close.

This ends early morning numbers FRIDAY MORNING

END

And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.36% UP 27 in basis points from THURSDAY

JAPANESE BOND YIELD: -0.150% UP 1  in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD:1.63%  UP 16 IN basis points from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.56  UP 16 IN basis points from THURSDAY

the Italian 10 yr bond yield is trading 7 points lower than Spain.

GERMAN 10 YR BOND YIELD: -.047% DOWN 11 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR FRIDAY

Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

Euro/USA 1.1138 UP .01833 (Euro =DOWN 188 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 102.18 DOWN 2.750 (Yen UP 275 basis points )

Great Britain/USA 1.3698 DOWN.0848 ( Pound DOWN 848 basis points/BREXIT DECISION AFFIRMATIVE

USA/Canada 1.2941- UP 0.0125 (Canadian dollar DOWN 125 basis points  AS OIL FELL  (WTI AT $4763).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 188 basis points to trade at 1.1138

The Yen ROSE to 102.18 for a GAIN of 275 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was DOWN 848 basis points, trading at 1.3698

The Canadian dollar FELL by 125 basis points to 1.2941, WITH WTI OIL AT:  $47.63

The USA/Yuan closed at 6.615/

the 10 yr Japanese bond yield closed at -.150% DOWN 1  IN BASIS  points in yield/

Your closing 10 yr USA bond yield:DOWN 18 IN basis points from THURSDAY at 1.571% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.417 DOWN 14 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 95.20 UP 167 CENTS  ON THE DAY/4 PM

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

London:  CLOSED DOWN 199.41 OR 3.15%
German Dax :CLOSED DOWN 699.87 OR  6.82%
Paris Cac  CLOSED DOWN 359.17  OR 8.04%
Spain IBEX CLOSED DOWN 1097.60 OR 12.35%
Italian MIB: CLOSED DOWN 2,242.36 OR 12.48%

The Dow was DOWN 610.32  points or 3.39%

NASDAQ DOWN 202.06 points or 4.12%
WTI Oil price; 47.60 at 4:30 pm;

Brent Oil: 48.38

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.13 (ROUBLE DOWN 1 & 47/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD FALLS TO -.047%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:47.57

BRENT: 48.46

USA 10 YR BOND YIELD: 1.599% 

USA DOLLAR INDEX: 95.54 up 233 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.3659 down .0886 or 886 basis pts.

German 10 yr bond yield at 5 pm: -.047%

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Brexistential Bloodbath – Dow Crashes 600 Points As Vol Explodes

Overheard in Britain today…

Well they did it… and no one expected it…

  • UK Stocks -3.14% worst since Jan 2016
  • US Stocks -3% worst since Aug 2015 (biggest opening gap down since 1987)
  • VIX +6pts biggest daly rise since Aug 2015 crash
  • Japan Stocks -7.9% worst since 2011 (Tsunami)
  • Spain Stocks -12.5% worst since 1987
  • Italy Stocks -12% worst since 1997
  • EU Banks -14.5% worst ever
  • US Banks -4.75% worst since Nov 2011
  • US 30Y Yield -14bps biggest drop since 2011
  • US 2Y Yield -14bps biggest drop since 2009
  • German 10Y Yield -14bps biggest drop since 2011
  • GBPUSD -11% biggest drop ever
  • USDJPY -4% biggest drop since 1998
  • EURUSD -2% biggest drop since Oct 2015
  • Gold +5% biggest day since Lehman 2008
  • Crude -4.4% most since Jan 2016

But apart from that everything is awesome.

What it looked like when Brexit news hit gold and currencies (h/t @NanexLLC)

 

The broad EU banking system bore the brunt of it…

 

and peripheral Europe was a bloodbath…

 

As Cable saw its biggest intraday swing ever…

 

Across asset classes, here is how the day went…

 

On the day, the early dead cat bounce died…

  • *DOW AVERAGE PLUNGES 610 POINTS AT 4 P.M., MOST SINCE AUGUST
  • *NASDAQ COMPOSITE TUMBLES 4.1% IN BIGGEST ROUT SINCE 2011

 

Dow dropped 850 from pre-Brexit highs…

 

Today’s S&P drop was just shy of the collapse on Aug 24th last year…

 

Financials were a yuuge loser, catching down to the yield curve… worse drop that Aug crash and broke all major technical support…

 

Since the Jo Cox death lows, stocks are now red…

 

All major US equity indices are now red year-to-date…

 

Since The Fed raised rates, Gold is up 23%, Bonds up 12%, and Dow down 1.7%…

 

VIX exploded (but we note that XIV – inverse VIX ETF – dropped almost 30%, the biggest move ever and 7 standard deviation shift)

 

It was one of the Top 5 moves in VIX ever:

View image on Twitter

is-deciderHtmlWhitespace" cite="https://twitter.com/Stalingrad_Poor/status/746436952094707712">

Stalingrad & Poorski @Stalingrad_Poor

And the Final Print as of 4:15pm puts today as the 5th largest move in history.

4:16 PM – 24 Jun 2016

 

With S&P losing 2,100 as VIX topped 24…

 

On the day, VIX surged after the cash close, dragging futures even lower…

 

So next we turn to FX markets…

Cable fell to 31year lows… Today’s drop was a 16 standard deviation crash

 

The USDollar Index rose 1.3% on the week (best in 4 months), driven by major spike today, but the GBP and JPY moves were colossal…

 

And on the day – GBP and JPY were the big movers…

 

Treasury yields dropped drastically today, puking before the US open but bounced higher to leave 30Y yields unch on the week…

 

Commodities flipped overnight with crude ending the week the biggest loser and PMs best…

 

On the day, gold unusually outperformed silver…

 

Gold and Silver soared…

AND JUST REMEMBER – CHINA WAS CLOSED BEFORE THIS BLOODBATH STARTED…

Charts: Bloomberg

Bonus Clip: Risk just went to 11…

Overheard in Britain today…

 

END

 

Trading from NY early today;

 

Dow Opens Down 500 Points To “Jo Cox” Lows – Largest Gap-Down Since 1986

The bounce’ gap from last Friday has been filled…

 

… Bringing us to the largest gap-down in the S&P since 1986:

 

end

 

Durable goods orders crater in May down 2.2% and it is the 17th consecutive month for durable goods declines

(courtesy zero hedge)

Durable Goods Orders Crater In May – Longest Non-Recessionary Slump In American History

Durable Goods Orders cratered 2.2% in May, drastically below -0.5% expectations – the worst since Feb. The entire data series disappointed with unexpected declines in Durables Ex-Transports and non-defense orders and shipments. However this is now the 17th month in a row of YoY Core Durable Goods declines, something that has never happened without a US economic recession being present.

 

 

Time to hike rates Mrs. Chairwoman.

 

Charts: Bloomberg

end

 

Two quant specialists warn of huge selling pressure over the next 3 days:

(courtesy zero hedge)

 

Derivative Strategist Warns Of $150 Billion In Quant Selling Over The Next Three Days

When it comes to forecasts about upcoming major quant trades, few have been as prominent or as accurate as JPM’s Marko Kolanovic, although to be fair, after having predicting up to $1 trillion in expiring S&P options two weeks ago, when he said that the “gamma imbalance turned towards puts yesterday ($9bn per 1% currently), and this will likely push realized volatility higher near term” and… nothing happened. While that does not mean that JPM’s “quant guru” has lost his magic touch (yet), it has opened up the financial playing field for forecasting challengers to emerge. Challengers such as UBS derivatives strategist Rebecca Cheong, who picked up Kolanovic’ baton, and according to whom selling of US stocks in the aftermath of Brexit is just getting started for quantitative traders who make buy or sell decisions based on price trends.

According to Cheong, such sales could total as much as $150 billion should equity volatility persist in the S&P 500 Index for the next week. “They’ll be buying volatility and selling the S&P,” said Cheong. “On days like today, when the VIX goes up, they have to buy.” And judging by the early attempt to slam VIX down only to see it ramp higher again during the day, a rising VIX is almost assured especially as now the “exit” bug in Europe has awoken another other nations such as France, the Netherlands and Italy are also demanding independence referendums.

As Bloomberg adds, “strategies designed to mitigate risk will actually add to downward pressure in the S&P 500 over the next week as computerized selling ramps up to keep pace with falling prices. It reminds Cheong of the rapid stock selling that roiled markets in August, when the S&P 500 fell 11 percent to a 10-month low while facing similar behavior from algorithmic traders.”

“The bigger the down move today, the more they have to sell, which would basically create a vicious cycle,” Cheong, head of Americas equity derivatives strategy at UBS, said in a phone interview. “We’ll see front-loaded selling in the range of $100 billion to $150 billion over the next two to three days. It could be very similar to August in terms of model-based selling.”

Cheong went so far as to quantify how much the seeling could be: rebalancing of risk control funds could result in up to $98 billion in S&P 500 selling should the index see price swings of about 3.5 percent or more over the next several days. Risk parity instruments may stir up as much as $30 billion in selling given similar volatility, she said. The number may end up being far more if Bridgewater, which as we exclusively reported yesterday was down 6% through last Friday, is forced to rebalance in order to once again get neutral. This would involve the selling of far more equities.

Additional downward price momentum will be created as owners of leveraged exchange-traded funds linked to the CBOE Volatility Index buy more shares as part of their own rebalancing process, according to UBS.

In short, the actionable information here is that i) a new “Kolanovic” may have emerged, one we should pay attention to and ii) if Cheong is right, the sharp market selloff from last August is just a few days away. Which reminds us: the August 24 plunge was on a Monday (also known as Black Monday 2.0) and took place after Chinese devaluation concerns the previous Friday sent the S&P sharply lower… just like today.

So is today’s Black Friday about to be followed by another Black, or pick any other color, Monday once more? If the UBS analyst is correct, buying a few puts here may not be such a bad idea.

end

It was quite a day

I will see you Monday and prepare for more fireworks

Harvey.


JUNE 23/Late tonight Nigel Farage admits defeat/ exit polls indicate 52% remain to 48% leave: thus a divided country/Mexico on the brink of a revolution/Chicago’s important national activity index falters again/

Thu, 06/23/2016 - 18:42

Good evening Ladies and Gentlemen:

Gold:  $1,261.20 DOWN $6.80    (comex closing time)

Silver 17.35  up a tiny 4 cents

 

In the access market 5:15 pm

Gold: 1257.00

Silver: 17.25

We have now entered options expiry week for the comex and LBMA. As always expect gold and silver to be depressed until the first of July.

.

The June gold contract is an active contract. Last  night we had a fair sized 21 notices filed last night, for 2100 oz to be served upon today.  The total number of notices filed in the first 16 days is enormous at 15,416 for 1,541,600 oz.  (47.950 tonnes)

ii) in silver we had 2 notices filed for 10,000 oz..  Total number of notices served  in the 16 days: 491 for 2,455,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 275.27 tonnes for a loss of 28 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by A WHOPPING  7,382 contracts UP to 213,000, AGAIN A NEW ALL TIME RECORD DESPITE THE FACT THAT  THE  PRICE OF SILVER WAS UNCHANGED with respect to YESTERDAY’S trading.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.065 BILLION TO BE EXACT or 152% of annual global silver production (ex Russia &ex China)

In silver we had 2 notices served upon for 10,000 oz.

In gold, the total comex gold OI fell by a HUGE 4998 contracts down to 566,569 as the price of gold was DOWN $2.50 with YESTERDAY’S trading (at comex closing). The bankers were overjoyed with the fall in gold OI but not silver which is giving them nothing but fits

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

No changes in gold inventory.

Total gold inventory: 915.90 tonnes

SLV

No change in SLV inventory

Inventory rests at 333.069 million oz.

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

1. Today, we had the open interest in silver ROSE by 7,382 contracts UP to 213,000  DESPITE THE FACT THAT THE price of silver was unchanged with YESTERDAY’S trading. The gold open interest FELL by a CONSIDERABLE 4,948 contracts DOWN to 566,569 as the price of gold was DOWN $2.50  YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  WEDNESDAY night/ THURSDAY morning: Shanghai closed DOWN 13.59 POINTS OR 0.47% / /Hang Sang closed UP 73.72 OR 0.35%. The Nikkei closed UP 172.63 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.17% Chinese yuan (ONSHORE) closed UP at 6.57774 /Oil ROSE to 49.77 dollars per barrel for WTI and 50.66 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5820 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN

 

b) REPORT ON CHINA

China issues a stern warning that they are the wrong opponent to play games with.

I wonder what China will do at the comex??

( zero hedge)

4. EUROPEAN AFFAIRS

i) a.The daily newspapers sums up the divide in England:

( zero hedge/all the UK newspapers)

i)b Martin Armstrong weighs in on the BREXIT vote:  Basically he states that the EU is nothing without Britain:

( Martin Armstrong)

ii)EU planning a “social security” tax for robots under a new EU proposal. I have now seen everything!

( Mish Shedlock/Mishtalk)

iii)Why huge volatility on FX markets today!:

( zero hedge)

iv)And at 5:15 pm early indications that the remain edge out the leaves by 52% to 48%

As I have stated in the past, this is probably the worst outcome for Britain as the pound will rise and they will face huge immigration problem: Nigel Farage admits defeat! ( zero hedge) 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

Mexico on the brink of a revolution as people there are fed up with corruption:

(courtesy AntiMedia.Org)

7.OIL ISSUES

option traders are now most bearish on oil since 2010:

( zero hedge)

8.EMERGING MARKETS none today 9. PHYSICAL STORIES

i)Craig Hemke puts his two cents worth on the British vote today:

( Craig Hemke/TFMetals)

ii)Steve St Angelo discusses the huge leverage on dealer (registered) silver and now it is more leveraged than gold

( SRSRocco report/Steve St Angelo) 10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Conflicting data: so what else is new:  initial jobless claims plunge to 42 yr lows.

( zero hedge)

ii)This is a biggy!  The Chicago Fed’s National Activity index (manufacturing) plunged to negative .51 from +.05.  Expectations were +.11.  Looks like Janet has missed her opportunity to raise rates

( zero hedge)

iii)the flash PMi rebounds in June but still domestic demand remains very weak:

( USA Manufacturing PMI/zero hedge)

 

iv)A good indicator as to what is going on inside the USA economic scene:  new home sales plunge the most in 8 months. Also previous months have seen a downward revision. Also median home prices are tumbling which is also not a good sign;

( zero hedge)

 

v)Dave Kranzler states that BREXIT is really a non issue.  The real issue is the collapsing USA economy:

( Dave Kranzler IRD)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 566,569 for a HUGE LOSS of 4,948 contracts as  THE PRICE OF GOLD WAS DOWN $2.50 with respect to YESTERDAY’S TRADING.OUR BANKERS WERE OVERJOYED WITH THE FALL IN TOTAL OI. JUNE IS  THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR AND IS A VERY ACTIVE MONTH FOR GOLD DELIVERIES. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 347 for a loss of 181  contracts. We had 175 notices filed YESTERDAY, so we lost a tiny 6 contracts or 600 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 176 contracts up to 5,089.This no doubt will be troublesome for our bankers as the front July contract month open interest is extremely high for a non active month and it also refuses to shrivel. In ounces, we have 508900 oz or 15.828 tonnes  The next big active contract month is August and here the OI FELL by 5,672 contracts DOWN to 407,247. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was FAIR at 180,941. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was POOR at 140,175 contracts. The comex is not in backwardation.

Today we had 21 notices filed for 2100 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by A WHOPPING 7,382 contracts from 205,618 UP to 213,000. The OI DRAMATICALLY ROSE IN OPPOSITION TO THE PRICE OF SILVER   BEING UNCHANGED with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 0 contracts REMAINING AT 96. We had 0 notices filed YESTERDAY , so we NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING  . The next big delivery month is July and here the OI fell BY 9,602 contracts down to 57.465. We have  1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at66,353 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was HUGE at  92,251. Silver is not in backwardation . London is in backwardation for several months.   We had 2 notices filed for 10,000 oz.  

JUNE contract month:

INITIAL standings for JUNE

June 23. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  9645.000 OZ

300 KILOBARS

SCOTIA Deposits to the Dealer Inventory in oz 2,314.48 OZ

BRINKS Deposits to the Customer Inventory, in oz   16,179.400 OZ

SCOTIA No of oz served (contracts) today 21 contracts
(2100 oz) No of oz to be served (notices) 326 contracts

32,600 oz Total monthly oz gold served (contracts) so far this month 15,416 contracts (1,541,600 oz)

(47.950 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  160,087.8 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  2314.48 oz

total dealer deposit:  2314.48  0z

 

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

 

Today we had 1 customer deposits:

i) Into Scotia: 16,179.400 oz

Total customer deposits; 16,179.400   OZ

Today we had 1 customer withdrawal:

i) out of Scotia: 9645.000 oz (300 kilobars)

total customer withdrawals:  9645.000 oz

Today we had 2 adjustments:

i) Out of HSBC:  964.53 oz or 351 kilobars were transferred out of the dealer and into the customer HSBC.  (we will deem this a settlement)

ii) Out of Scotia:  608.479  were transferred out of the dealer and into the customer. of Scotia. We will deem this a settlement. Total in tonnage: .0489 tones

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 21 contracts of which 9 notices was stopped (received) by JPMorgan dealer and 12 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,416) x 100 oz  or 1,541,600 oz , to which we  add the difference between the open interest for the front month of JUNE (347 CONTRACTS) minus the number of notices served upon today (21) x 100 oz   x 100 oz per contract equals 1,574,200 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED AND WE HAVE NOW WITNESSED THE SAME RESULT FOR JUNE.   Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,416) x 100 oz  or ounces + {OI for the front month (347) minus the number of  notices served upon today (21) x 100 oz which equals 1,575,800 oz standing in this   active delivery month of JUNE (48.964 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE MOSTLY GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (48.964 TONNES) . WE LOST 6 contracts or an additional 600 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 48.964 tonnes of gold standing for JUNE and 53.26 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 48.964 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes = 65.077 tonnes still standing against 53.26 tonnes available.  Total dealer inventor 1,711,666.742 tonnes or 53.26 tonnes Total gold inventory (dealer and customer) =8,850,060.381 or 275.27 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 275.27 tonnes for a loss of 28 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!      end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 23.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  948,196.886 oz

CNT

BRINKS Deposits to the Dealer Inventory nil Deposits to the Customer Inventory  610,906.100  oz

JPM,BRINKS No of oz served today (contracts) 2 CONTRACTS 

(10,000 OZ) No of oz to be served (notices) 94 contracts

450,000 oz Total monthly oz silver served (contracts) 491 contracts (2,455,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  24,188,599.1 oz

today we had 0 deposit into the dealer account

total dealer deposit:nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 2 customer deposits:

i) Into JPMorgan:  605,868.000 oz ??? how could we have an exact deposit???

ii) Into Brinks: 5038.100 oz

Total customer deposits: 610,906.100 oz

everyday for the past few weeks, JPMorgan has been bringing in at least 600,000 oz into the silver comex and today they deposited again the same like quantity.

We had 2 customer withdrawals

i) Out of CNT:  150,695.996 oz

ii) Out of Brinks; 150,695.996 oz

:

total customer withdrawals:  948,196.886  oz

   

 

 we had 0 adjustment

 

Looks to me like we have our good old fashioned run on silver at the comex/

today 948,106.886 oz leaves the silver comex.

The total number of notices filed today for the JUNE contract month is represented by 2 contracts for 10,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (491) x 5,000 oz  = 2,455,000 oz to which we add the difference between the open interest for the front month of JUNE (96) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  491 (notices served so far)x 5000 oz +{96 OI for front month of JUNE ) -number of notices served upon today (2)x 5000 oz  equals  2,925,000 of silver standing for the JUNE contract month. We NEITHER GAINED NOR LOST ANY SILVER OUNCES STANDING IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.   Total dealer silver:  23.346 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   149,051 million oz The total open interest on silver is NOW at its all time high with the record of 213,000 being set June 23.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. end Steve St Angelo discusses the huge leverage on dealer (registered) silver and now it is more leveraged than gold (courtesy SRSRocco report/Steve St Angelo) COMEX Registered Silver Now More Leveraged Than Gold

by on June 23, 2016

While the world awaits the BREXIT vote, the COMEX Registered Silver Inventories reached a new record as it pertains to leverage.  Matter- a-fact, the number of owners per ounce of Registered Silver is higher than gold.  In the beginning of the year, COMEX Gold Registered inventory owners per ounce spiked to over 500 to 1.

However, the situation for COMEX Registered Gold has calmed down quite a bit as its inventories have risen to 1.7 million oz (Moz) from the low of a 89,000 oz in a little more than six months:

Registered Gold owners per ounce have fallen from over 500/1, to 33/1 currently.  On the other hand, the situation in COMEX Registered Silver shows a much different picture:

While owners per oz of Registered Gold have dropped dramatically,Registered Silver Inventories have hit a new record of 44 owners per ounce.  This is nearly three times the rise since the latter part of 2015.

So, why have Registered Silver Inventories continued to decline, while Registered Gold Inventories move significantly higher??  What is even more interesting is that when the price of silver increased from its lows in 2009 to a high of $49 in 2011, the Registered Silver Inventories fell to a low of 26.4 Moz.

Speculation was at the time that industry and investors were acquiring at lot of silver, thus depleting the Registered Silver stocks.  However, something is totally different this time around.  As we can see in the chart above, theRegistered Silver Inventories are at the lowest level in more than a decade at 23.3 Moz… but the price is only at $17.

This next chart compares the Registered Silver Inventories during the peak price in 2011 and today:

In April 2011, total Registered Silver Inventories fell to a low of 26.4 Moz as total open interest was approximately 750 Moz.  To get the total open interest in ounces, we multiply the open interest by 5,000 oz (a single contract equals 5,000 oz).  Now, if we look at what is taking place today, the leverage is even higher.

With the Registered Silver Inventories at 23.3 Moz, the total open interest is a staggering 1,028 Moz.  This is why the Owners Per Oz is now at 44/1…. another new record.

So, why would Registered Silver Inventories continue to decline since the beginning of the year while Registered Gold Inventories move up much higher?  Well, part of the reason may be due to the Chinese who are now stockpiling silver.  As I stated in previous articles, silver inventories at the Shanghai Futures Exchange increased from a low of 7.5 Moz in August 2015 to over 60 Moz currently.

Furthermore, if industrial silver demand is weaker, why hasn’t the COMEX Registered Silver Inventories increased?  This was the case after the price of silver peaked and fell to $14 at the end of 2015.  Thus, as the price of silver fell from $49 in April 2011, to a low of $14 in 2015, Registered Silver Inventories grew from 26.4 Moz to over 70 Moz last year.

But, something changed in 2015.  Even though the price of silver did not rise all that much, we had the huge spike in Retail Silver Investment starting in June.  This caused Registered Silver Inventories to fall as Indians and North Americans were buying record silver bullion.

Lastly, I am hearing through several sources that Chinese are not only acquiring a lot of silver for industry, they are now buying silver for investment.  It will be interesting to see how things unfold this year, but if the Chinese start really buying and trading silver… we could see serious fireworks in the silver market.

-END-

And now the Gold inventory at the GLD june 23/no change in gold inventory tonight/rests at 915.90 tonnese June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx june 23/ Inventory rests tonight at 915.90 tonnes

end

Now the SLV Inventory June 23/ no change in silver inventory/rests tonight at 333.069 million oz June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/ June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495 June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 23.2016: Inventory 333.069 million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.1 percent to NAV usa funds and Negative 2.4% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 60.9% Percentage of fund in silver:37.7% cash .+1.4%( June 23/2016). / 2. Sprott silver fund (PSLV): Premium RISES  to +0.25%!!!! NAV (June 23/2016)  3. Sprott gold fund (PHYS): premium to NAV  rises TO +0.64% to NAV  ( June 23/2016) Note: Sprott silver trust back  into POSITIVE territory at +25% /Sprott physical gold trust is back into positive territory at +0.36%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,THURSDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) BREXIT Day – Markets Becalmed – Gold Panic Prelude – Trading Hours By Mark O’ByrneJune 23, 20160 Comments

Note:  Due to increased inquiries and demand, our trading desk will be open until 1900 BST today and resume trading from 0700 BST tomorrow.

BREXIT Day and the UK EU referendum is upon us today and investors are expecting more choppy trading in financial markets in the coming hours. The City of London is bracing itself for potentially the most volatile night since the sterling devaluation on Black Wednesday.

Gold in GBP – 5 Years

This morning, as British voters headed to the polls, sterling hit a 2016 high versus the dollar and gold in sterling terms fell to £844 per ounce, down 10% from a high of £928.85 per ounce just 5 trading days ago on June 16.

While the gold market is on the surface becalmed, there has been very significant high net worth and institutional demand in recent weeks and this is leading to an, as of yet, unacknowledged and unappreciated “panic” in the interbank gold market due to unprecedented conditions and “supply issues” as we revealed yesterday.

Gold and silver may come under further selling pressure in the short term, especially if the remain side wins the referendum. However, any weakness is likely to be short term  due to the increasing risks of a global recession, risks posed by negative interest rates and bail-ins and many geo-political threats throughout the world. Illiquidity and supply issues in the London Good Delivery inter bank gold market also bode very well for gold.

A vote to stay could be considered priced in to markets now. In the event of a leave vote, stock markets will sell off sharply and safe haven gold and silver will likely rally especially against the euro and sterling.

World stocks remain very buoyant despite the risks and have climbed for a fifth day running. Risk appetite remains high and markets appears somewhat complacent about the still real risks of a vote to leave the EU and indeed other global risks.

Despite the most recent polls clearly showing the result is set to be extremely close, markets are very much pricing in a vote to remain. This creates the real risk that a vote to leave leads to dislocations, sharp corrections and potentially crashes in stock markets. A Brexit vote would likely lead to a very sharp correction, with the FTSE 100 plummeting. Swiss bank UBS has warned of sharp falls to levels of between 4,900 and 5,500, wiping off around £350 billion from the market.

The official result is not expected until 0600 GMT or later on Friday morning. The markets will begin to react, potentially very rapidly, from when the first results are announced in or around 0100 GMT, especially if they are showing the leave camp in the lead.

Some hedge funds have commissioned their own exit polls in order to get vital intelligence ahead of the market. Thus, sharp moves ahead of the official results may be perceived as certain market participants having advance knowledge of the result. Market manipulation and the usual trading ‘shenanigans’ are to be expected. Another reason to avoid the short term noise and focus on the long term and the importance of owning quality, value assets in a diversified portfolio.

Our trading desk will be open until 1900 BST today and from 0700 BST tomorrow morning (Friday 24th), if you need to buy or sell precious metals.


Gold Prices (LBMA AM)

23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce
22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 & GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 & GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 & GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 & GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 & GBP 903.04 per ounce

Silver Prices (LBMA)
23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce
22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 & GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 & GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 & GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 & GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 & GBP 12.26 per ounce


Gold News and Commentary
Gold Edges Higher as Decision Day in U.K. Puts Markets ‘All on Edge’ (Bloomberg)
Gold touches two-week low as Britain gears up for EU vote (Reuters)
Gold ETF Investors Look Past Brexit, Lift Assets to 2-Year High (Bloomberg)
Brexit gold rush: Scared Brits stockpile bars & coins, just in case (RT.com)
Britons queue to exchange pounds ahead of referendum (FT via Zero Hedge)

FACTBOX – How will Britain’s EU referendum vote count work on the night? (Reuters)
Nervy global investors revisit 1930s playbook (Reuters)
Ten reasons why I’m voting to leave the EU – Frisby (Money Week)
Brexit hoopla diverted our attention from real problems – Edwards ( Business Insider)
George Soros wrong on Brexit and UK economy, says City economist (Guardian)
Silver Options Traders Follow Gold To Longest Bullish Bet Since 2009 (Zero Hedge)
Why gold could ‘brenefit’ regardless of Brexit vote outcome (CNBC)
Read More Here

Recent Market Updates
– Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market
– Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”
– Gold Prices Surge to Highest in Nearly Two Years On FED and Brexit Haven Demand
– Gold Bullion Has Little Downside, Brexit Or Not, Says HSBC
– Central Bank of Ireland Warns Risks are Debt, Brexit, Geopolitical Tensions and Migration
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

Mark O’Byrne Executive Director end Craig Hemke puts his two cents worth on the British vote today: (courtesy Craig Hemke/TFMetals) THURSDAY Brexit Vote By Turd Ferguson | Wednesday, June 22, 2016 at 10:53 am

With the Brexit vote coming up tomorrow, today we should take a moment to consider what should happen with gold following the outcome.

The first thing you need to know is that this is NOT a done deal. The assumption since last Thursday is that Brexit will fail…and it likely will. The City of London almost always gets what The City of London wants. To think that the hoi polloi will be allowed to advance an agenda that is NOT in The City’s interests is almost unfathomable, sort of like those believing that a new Glass-Steagall will be passed one day in the U.S.. The Financial-Political Complex overpowers everything through bribery, greed and corruption so to think that popular opinion would be allowed to override them?…Well, it’s a longshot.

That said, the polls remain close and be sure to check this from ZH. As you know, ole Turd knows a little about bookmaking so, to me, this makes perfect sense. Essentially, the bookmaker simply desires equal amounts of money on each side of the wager. The amount of individual bets tells you something about the supposed “smart money” but it can be misleading. What this ZH post shows is that there is a huge amount of individual bets on Brexit but an equally huge amount of money…in much larger chunks…on Bremain. Now why would that be? Does the “smart money” know something that the “squares” do not? Or is someone attempting to influence opinion by placing big bets in order to drive the odds toward Bremain. This is an interesting question to consider in the remaining hours before the vote. http://www.zerohedge.com/news/2016-06-22/something-strange-emerges-when-looking-behind-brexit-bookie-odds

And here’s yet another major English newspaper coming out with an endorsement of Brexit:http://www.dailymail.co.uk/debate/article-3653385/Lies-greedy-elites-divided-dying-Europe-Britain-great-future-outside-broken-EU.html

And don’t forget who reads newspapers and which is the most likely demographic to turn out in large numbers…old(er) people. And which group is most likely to reject the EU in favor of British “patriotism”? Old(er) people. Just sayin’.

So, again, this is far from a done deal, regardless of The City’s desires. Sit tight and be ready. Tomorrow will be fun!

To that end, let’s now talk about gold and the impact of the vote on paper gold “prices”. It will be easier to discuss this verbally and we’ll attempt to do so in today’s podcast which, God willing, I’ll be able to post before 8:00 pm EDT.

Here’s where ole Turd stands…and this is NOT because “Turd is just a permabull who always says BTFD”. Everything and every scenario says gold is going to rally, NOT plummet. Why? Let’s list a few of the reasons:

  1. How much “Brexit risk premium” was pumped into gold in the first place? Gold was $1213 and down nearly $100 from its highs before the June BLSBS put an end to the Fed Goon Jawboning Parade. After the BLSBS, it closed June 3 at $1243. It then rallied over the next two weeks, anticipating a dovish FOMC and was $1284 when the Fedlines were released one week ago today. How much of that rally was FOMC-related and how much was Brexit-related? Maybe 80/20? Maybe. In fact, Brexit really only entered as a legitimate possibility early last week. So, considering that gold is now $50 off its peak last Thursday, I think the “Brexit risk premium” is already done, gone and out.
  2. So this actually puts gold DOWN $16 or 1.3% since the extremely dovish and dissentless Fedlines of last week! What? That’s crazy!! All this does is once again prove the old adage that, if you want to make money trading the metals, you must always “sell some when everything looks great and buy some when everything looks terrible”.
  3. From an HFT-algo perspective, EITHER vote scenario should be gold bullish. Why? A Brexit vote will dump the euro but surge the yen. This would/could/might blow the USDJPY all the way to and through the 101 target we’ve been discussing. Bond futures will soar worldwide, too, as “investors seek the safe haven of fixed income”. These two combined should drive heavy HFT gold futures buying. But what about Bremain? If this occurs, the Euro will rally…at least it should. And the euro is about 60% of the POSX. A 2-3 point rally in the Euro would drive the POSX back toward 92. After an initial shock, the HFTs and smart human money managers everywhere will begin to focus upon the tumbling Pig and Fed dovishness…as they should have been doing every day since last Wednesday…and you’ll get a quick bounce and recovery from any selling.
  4. And, in the end, simply look at price and history.

“What does that mean Turd? Please elaborate on point #4.” OK, I’ll be glad to.

Recall what happened in May. Gold surged toward the critical $1308 point? What did The Cartel Banks do? They desperately capped and capped and then brazenly used all of the Fed Goon jawboning as an excuse to ram prices back down and, MOST IMPORTANTLY, cover over 100,000 naked shorts BEFORE The Fed actually announced that they were powerless and neutered. So, as price rallied on the actual news of June 3 and June 15, The Banks were able to control price and keep it below $1308 by issuing back out the same old paper that they had issued in April. So, what has the past 4 days been about? It’s the exact same trick/strategy!

The Cartel Banks have used the Bremain sentiment since the Cox assassination as cover to raid price, drive Specs back out and cover shorts. That way, when price begins to rally again regardless of the outcome, they’ll have shorts to issue as they attempt again to keep price below $1308. See how that works? Just yesterday, we saw an overt raid of $20 and an open interest decline of nearly 10,000 contracts…back to 571,000. With prices down a little again today, who knows how many more nervous-nelly Specs are heading to the exits ahead of the vote.

The point is…Just as in May, The Banks KNOW what is going to happen next. The paper price of gold is going to rally in the days and weeks to come, regardless of the outcome of tomorrow’s vote. Therefore, just as in May, they are desperately using any and every opportunity to scare out some Specs and cover some shorts. Got it? See what I mean? Again, we’ll try to make some sense of all this in today’s podcast.

For now, gold is down $5 as I type and, earlier today, came very close to tapping its 50-day MA and the lower band of our channel…which we’ve been mentioning as a likelihood since Sunday evening. What’s my strategy? Sit back, relax and watch the fireworks. If I can remember tonight, I think I’ll even order another shiny ounce of gold from JMB or GoldenEagle. I mean, why not? Get it while you can! Again, I absolutely expect the 50-day to hold and that the hand-crafted/painted double top on the chart to fail. My target next remains $1340.

And one more thing…As the world moves on from “All Brexit, All The Time”, I though that this little tweet was interesting:

Have a great day but be sure to check back much later for a full podcast.

TF

end

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

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.5774 ( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.5882) / Shanghai bourse  DOWN 13.59 OR 0.47%   / HANG SANG CLOSED UP 73.72 OR 0.35%

2 Nikkei closed UP 172.63 OR 1.07% /USA: YEN FALLS TO 105.76

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.21/Euro UP to 1.1382

3b Japan 10 year bond yield: FALLS  TO -.150%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.62

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  49.76  and Brent: 50.66

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to +.10%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 8.00%/: 

3j Greek 10 year bond yield FALL to  : 7.850%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1262.50/silver $17.28(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 79 in  roubles/dollar) 64.04-

3m oil into the 49 dollar handle for WTI and 50 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.62 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9546 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU NEW POLLS INDICATES A SWING TO THE BREMAIN.

3r the 9 Year German bund now NEGATIVE territory with the 10 year RISES to  + .100%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.726% early this morning. Thirty year rate  at 2.541% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Voting Begin: Stocks Surge, Sterling Hits 2016 Highs, Futures Flirt With 2100

On the day voting for the UK referendum finally began, what started off as a trading session with a modest upward bias, promptly turned into a buying orgy in painfully illiquid markets shortly after Europe opened as an influx of buy orders pushed European stocks 2% higher, propelled by cable which was above 1.49 for the first time since December and USDJPY climbing over 1.05 in sympathy, following the release of the final Ipsos Mori poll which showed Remain at 52% to 48% for leave.

The final poll breakdown is as follows, and shows a lead for Remain based on phone polls and a slight lead for Leave from online polls.

One look at the chart of cable shows that as far as the FX market is concerned at least the outcome is now sealed.

Then again, with all polls largely in the margin of error, predicting a victory for Remain may be premature: ““Some cash is returning to markets, but I would rather stay put until the results. You can’t really rule anything out before tomorrow,” said Thomas Thygesen, SEB AB’s head of cross-asset strategy in Copenhagen. “The issue will be how the outcome is perceived and how the biggest stakeholders react. Even just the absence of bad news may be the start of a risk rally, and markets have been rising in the anticipation of this.

The MSCI All-Country World Index hit a two-week high, rising 0.7% in early trading, with above-average trading in shares on Europe’s benchmark, amid a vote that past opinion polls indicated was too close to call. A gauge of sterling advanced for a second day, while a measure of implied overnight price swings versus the dollar climbed to a record. The U.S. currency weakened versus all of its major peers except the yen. The Mexican peso and Russia’s ruble led gains among oil-exporting nations as crude advanced. The cost of insuring high-yield corporate debt against default fell for a fifth day, the longest run since April. U.S. Treasuries dropped as Spanish and Italian notes rose.

Needless to say, investors have been glued to the U.K.’s debate on EU membership in recent weeks as governments and central banks around the world warned that a vote for a so-called Brexit could hurt global economic growth and destabilize financial markets. As Bloomberg writes, a gauge of expected volatility in U.S. stocks jumped to its highest level since February ahead of the referendum.

The Stoxx Europe 600 Index also rose for a fifth day, surging 1.3 percent, with miners leading a rally of all industry groups. The volume of shares changing hands on the European index was about 29 percent higher than the 30-day average. Britain’s benchmark FTSE 100 Index advanced 1.2 percent. Voters have until 10 p.m. to cast their ballot in the referendum on EU membership. The first results are expected around midnight, while the final ones are due at about 7 a.m. on Friday. Polls published over the last three days suggested the vote will be finely balanced between the two camps. Futures on the S&P 500 added 1.1 percent and were flirting with the 2,100 level.

Aside from the Brexit vote, investors will also look data on jobless claims, manufacturing and new home sales for indications of the health of the world’s biggest economy and the possible trajectory of interest rates.

Market Snapshot

  • S&P 500 futures up 0.9% to 2097
  • Stoxx 50 up 2.0% to 33036
  • FTSE 100 up 1.6%.35 to 6358
  • DAX up 1.9% to 10261
  • German 10Yr yield down less than 1bp to 0.06%
  • Italian 10Yr yield down 3bps to 1.41%
  • Spanish 10Yr yield down 2bps to 1.48%
  • S&P GSCI Index up 0.2% to 377.6
  • MSCI Asia Pacific up 0.8% to 131
  • Nikkei 225 up 1.1% to 16238
  • Hang Seng up 0.4% to 20868
  • Shanghai Composite down 0.5% to 2892
  • S&P/ASX 200 up 0.2% to 5281
  • US 10-yr yield up 2bps to 1.71%
  • Dollar Index down 0.34% to 93.4
  • WTI Crude futures up 0.5% to $49.38
  • Brent Futures up 0.6% to $50.20
  • Gold spot up 0.3% to $1,270
  • Silver spot up 0.9% to $17.43

Top Global News

  • Final Brexit Appeals Made as Polls Diverge on Referendum’s Eve: ComRes survey late Wednesday shows Remain ahead, boosts GBP
  • Pound’s Day of Destiny Arrives as History Shows What’s Possible: Liquidity biggest problem after a leave vote: Insight
  • VW Owners Split for First Time on Diesel Scandal in AGM Vote: Lower Saxony abstains from ratifying executives’ actions
  • House Republicans Leave Town as Democrats Extend Gun Sit-In: Democrats say protest will continue until votes are scheduled
  • Mylan Says Indian Drug Industry Needs More Transparency From FDA: Mylan has ‘moved on’ from Perrigo bid, President Malik says
  • Caesars Creditors to Vote on Plan, But Confirmation Fight Awaits: Company still seeking deal to avoid risky court battle
  • Twilio Raises $150m Pricing IPO Above Marketed Range: San Francisco-based company priced 10m Class A shares at $15 each
  • BofA Said in Talks to Settle With SEC for $400m-$450m: WSJ: Settlement may be announced as soon as Thursday
  • China’s Sanpower Says It Joins Bids for McDonald’s China Rights: Sanpower submitted joint bid with Beijing Tourism Group

* * *

Looking at regional markets, Asia stocks traded mixed as all focus remained on today’s UK referendum. Nikkei 225 (+1.1%) and ASX 200 (+0.2%) were supported at the open, alongside gains in US equity futures after the release of Comres and YouGov polls which showed the Remain campaign jumped ahead. However, gains were capped as cautiousness still persisted and as Chinese markets entered the fray, with the Shanghai Comp (-0.3%) negative on continued debt concerns and after the PBoC reduced the size of its liquidity injections. Finally, 10yr JGBs were pressured as the risk-on sentiment in Japan restricted flows into the safe-haven, although prices were lifted off worst levels following a 20yr bond auction with had a better than prior b/c.

Top Asian News

  • China Is Said to Be Satisfied With Yuan Exchange-Rate Reform: Premier Li visited PBOC, China Construction Bank on Monday
  • Stealth China Stimulus Means Fiscal Gap Over 10%, Economists Say: As private businesses tighten belts, govt is stepping in
  • Japan Negative Rates Drive Biggest Lenders From Overnight Market: 3 of 5 largest say minus rates complicate call funding
  • China’s State Grid Said in Talks to Buy CPFL Energia Stake: Camargo Correa’s stake in CPFL Energia is ~23.6%
  • World’s Biggest Pension Fund Sues Toshiba for Accounting Scandal: Japan’s GPIF is seeking damages of ~900m yen
  • Arora’s Walkout Returns the Focus to Japan Inc. Succession Woes: SoftBank transition hiccup latest of many such cases
  • Toshiba’s President Tsunakawa Warns of Long Road to Recovery: Toshiba is recovering from a multiyear accounting scandal

European equities have traded solidly in the green with little in the way of fundamental newsflow, while in terms of the FTSE 100 that has been led by material names amid the upside in the commodity complex, coupled with strength in Tesco’s (+2.3%) following a firm sales report. Elsewhere, credit markets are relatively flat with the German yield seeing some curve flattening amid the outperformance in the long end. The Stoxx Europe 600 Index also rose for a fifth day, surging 1.3 percent, with miners leading a rally of all industry groups. The volume of shares changing hands on the European index was about 29 percent higher than the 30-day average. Britain’s benchmark FTSE 100 Index advanced 1.2 percent. Voters have until 10 p.m. to cast their ballot in the referendum on EU membership. The first results are expected around midnight, while the final ones are due at about 7 a.m. on Friday. Polls published over the last three days suggested the vote will be finely balanced between the two camps.

Top European News

  • Tesco Turnaround Gains Pace as Lewis Quietens Brand Doubters: Sales increase marks another step in CEO’s turnaround efforts
  • Norway Keeps Rates at Record Low as Oil Crisis Battering Abates: Lifts rate outlook, still sees one more rate cut in 2016
  • When Ports Finally Ditch Fax Machines, Cargotec Plans to Profit: Company bets software will replace outdated technology
  • French Output Declined for First Time in Four Months in June: Private-sector economy shrank for the first time in four months
  • Statoil Saves $292m Cash as Investors Take Scrip Dividend: Analysts predicted a majority if investors would choose shares
  • Credit Suisse Said to Face U.S. Probe on Israel Client Taxes: Probe looking at whether bank helped clients evade U.S. taxes
  • CDC Advises Against Using AstraZeneca’s FluMist Next Season: Panel found not effective enough in last 3 influenza seasons

In FX, the pound rose to over $1.4900, its strongest level since December. The Bloomberg British Pound Index, which tracks sterling against a basket of peers, gained 0.6 percent. The currency has strengthened about 3 percent versus the dollar this week. “Even though it looks as though much of the ‘risk of Brexit’ has been priced out of markets, there remains plenty of scope for volatility on either outcome, albeit very much more on a ‘Leave’ than ‘Remain,’” Ray Attrill, global co-head of foreign-exchange strategy in Sydney at National Bank Australia Ltd., wrote in a note. An overnight measure of pound-dollar volatility surged as traders sought protection from unusual price swings. The gauge, based on option prices, touched 119.7 percent Thursday, the highest since Bloomberg began collecting the data in 1998.

The euro appreciated 0.7 percent, while Sweden’s krona gained 1.1 percent. Mexico’s peso gained 1.3 percent and the ruble climbed 1.1 percent. Taiwan’s dollar rose to its strongest level since August after overseas investors pumped $2.4 billion into the island’s stocks this month. The yen weakened 0.4 percent against the dollar and slid for a fifth day versus the euro, its longest losing streak since March. The Bloomberg Dollar Spot Index dropped 0.5 percent. The MSCI Emerging Markets Currency Index advanced 0.3 percent to a seven-week high. Five days of progress have pushed it up 1.6 percent. Mexico’s peso, South Africa’s rand and Russia’s ruble led gains.

In commodities, West Texas Intermediate for August delivery gained as much as 77 cents to $49.90 a barrel on the New York Mercantile Exchange and was at $49.66 at 10:50 a.m. London time. The contract lost 72 cents to $49.13 on Wednesday. Total volume traded was about 35 percent below the 100-day average. Gold swung between gains and losses near a two-week low, having retreated 2.5 percent over the last three days. Nickel and zinc fell, while copper climbed 0.8 percent.

* * *

Bulletin Headline summary from Bloomberg and RanSquawk

  • GBP rises to 2016 highs with the latest Polls from YouGov, ComRes and Ipsos Moris showing `remain’ ahead.
  • Equities higher this morning, however newsflow has been somewhat light with focus firmly on the EU referendum.
  • As well as the UK’s EU referendum, today will see the release of US manufacturing PMI, Weekly Jobless Claims and New Home Sales.
  • Treasuries sell off overnight as global equities, commodities, precious metals and the GBP/USD rally; U.K. votes on Brexit, polls open until 5pm NYT with final results due ~2am NYT tomorrow morning.
  • Across Europe, traders and their employers are making preparations for a big night. It promises to be a record- setting evening, whether in terms of trading volatility or in gallons of coffee consumed
  • Bond and currency traders seeking refuge as the U.K. votes on membership in the European Union may find that the world’s financial-market havens aren’t so safe
  • Growth in the euro area’s private sector slowed more than economists predicted in June, with firms expressing concerns about uncertainty ahead of the U.K.’s vote on its European Union membership
  • The European Central Bank reinstated a waiver on Greek debt, allowing the nation’s banks more access to cheaper refinancing lines but stopping short of including such bonds in quantitative easing for now
  • A majority of Japan’s biggest private lenders are still unwilling to borrow from the market for overnight loans almost six months after the Bank of Japan announced its negative interest-rate policy

DB’s Jim Reid concludes the overnight wrap

Let’s take a look at the latest and last polls before the ballot boxes open. On this front it was a good day yesterday for ‘leave’ until the two 10pm polls both showed ‘remain’ in the lead. Opinium released their last poll (online) yesterday afternoon showing ‘leave’ 1% in the lead at 45/44%. That came at the end of the European session and a couple of hours later the TNS poll (online) showed ‘leave’ 2% in the lead at 43/41%. The sample periods for those were June 20th-22nd and June 16th-22nd respectively.

Then after the US close we got the ComRes phone poll (survey period June 17th-22nd) for the Daily Mail and ITV News which showed a 6% lead for ‘remain’ at 48/42%. After accounting for the don’t knows this extended to an 8% lead for ‘remain’ at 54/46%. Finally and a short moment after that ComRes poll, the YouGov online poll for the Times (survey period June 20th-22nd) showed ‘remain’ 2% in the lead at 51/49%. This also adjusted for the don’t knows. The FT’s poll of polls is now sitting at 47% vs. 45% in favour of ‘remain’ after accounting for the 4 polls yesterday.

Up to last night, of the most recent 8 polls, 3 out of 5 online surveys have given ‘leave’ the lead and all 3 phone equivalents have ‘remain’ in front.

Outside of the online/phone polling accuracy debate, the greatest level of intrigue will be to see whether the pollsters generally or bookmakers have been the more accurate in the build-up. As we highlighted last week, there seemed to be either a late swing or error in polling that underestimated the support for the ‘remain’ movement in the Quebec/Scottish referendums. Figure 1 in the PDF today updates that chart for the latest Brexit polling numbers.

After a big wobble last week, markets in our opinion are now more pricing in probabilities closer to the bookmakers assessment. There should be caution in over interpreting the bookmaker numbers as betting odds reflect the weight of money staked rather than a prediction. Clearly there could be some hedging involved here which would distort its predictive powers.

As for the timeline after polls close (2200 BST), the first thing to note is that there will be no official exit poll. An Ipsos Mori telephone poll for the Evening Standard is due to be released at some stage today (possibly before polls open) while a YouGov poll is due to be announced after polls close this evening.

The YouGov sample is exclusively taken from today, with the former compiled earlier in the week.

It is said that several city institutions have commissioned their own private polls so it’ll be interesting to see whether these see the light of day. The trading in Sterling might give clues as to whether notable news has been derived from these polls. Overall I’d imagine the YouGov poll (released on Sky) will get most attention post-2200 tonight although we note it’s an online poll. Next thing to look for is turnout. The number of voters in each area is compiled before counting. So we should get an idea on turnout before the first results (perhaps due at around 0030 Friday – see below). The UK Electoral Commission has estimated that most will come through between 2330-0230.

DB’s George Buckley has argued that the ‘leave’ vote appears more passionate and is likely to be more incentivized to vote. A low turnout number could therefore favour them. The last General Election (May 2015) saw a 66% turnout but the Scottish referendum saw 85%. The 1975 EEC UK referendum saw just under 65%. It’s impossible to work out at what number the pendulum shifts in favour of ‘remain’ (if indeed it does) but maybe last year’s General Election is a baseline figure. Given the phenomenal media interest, on balance I’d be surprised if it wasn’t higher. As George Buckley reminded me yesterday, in 1975 we’d only been a member of the EEC for a couple of years so surely this is a more momentous vote with more at stake either way?

Next are the all important first results and how to handicap them. The first results are expected around 0030 BST (Sunderland first perhaps) with 50% likely available by 0400 and 80% by 0500. Figure 2 in the PDF shows the likely cumulative % declaration by time. In terms of interpreting the results DB’s Jack Di-Lizia has produced an interesting graph (Figure 3 in today’s PDF) showing the likely declaration results timings against level of euroscepticism in that area. The lower this number the greater the level of euroscepticism. This index was compiled using Sky who ranked each area of the country. As a word of warning this was done in March before the recent swing towards ‘leave’ and the regions may not exactly map the count areas. However as can be seen from the moving average, the initial results may favour eurosceptic  areas before it becomes more random as we approach 0200. YouGov has also issued numbers for eurosceptism and DB’s George Buckley has compiled a list of areas that report before 0300 and show similar numbers for Sky and YouGov (to confirm the trend). He sees these as interesting ones to watch.

As we swing over to markets, its FX which has seen the greatest volatility over the past 24 hours or so. Sterling touched an intraday high yesterday in the mid-afternoon at 1.477 (roughly +0.84%) prior to the release of the first two polls which showed ‘leave’ having the advantage. Following those polls that gain was completely wiped out. However, following the release of the two late polls showing ‘remain’ in the lead, the Pound surged +1.30% and touched an intraday high late last night of 1.484. Believe it or not that’s actually the highest level this year (and since December 28th) and while it’s come off a little in Asia, it’s still holding around 1.480 this morning.

Meanwhile the implied probability based on political bookmaker’s odds is sitting at 79.9% this morning. That comes following a slightly greater than 5% range yesterday which saw the probability get as low as 75.5% and as high as 80.9%. As a reminder those odds have been as low as 61% earlier this month and as high 85% back in May.

At the margin, sentiment is probably just about on the positive side in Asia this morning. While bourses in China and Korea are lower, the Nikkei (+0.48%), Hang Seng (+0.38%) and ASX (+0.18%) are all up modestly, while US equity index futures are up half a percent or so and EM currencies are also up a similar amount. Credit markets in Asia and Australia are also 4bps and 2bps tighter respectively.

The moves this morning come after markets finished a little more mixed yesterday. The Stoxx 600 was up as much +1.00% or so an hour out from the close, before paring alot of that to close at +0.38% following the release of the Opinium poll. The FTSE 100 closed +0.56% but had also been up as much +1.40%. That said the FTSE is still up an impressive +6.13% from the intraday lows of last Thursday (which was the lowest level since February). Indeed that has also occurred despite Sterling being up +5.47% in the time frame so the gains would be perhaps even more had it not been for that headwind.

Meanwhile across the pond the S&P 500 was out with an early gain of +0.51% before then mirroring a similar dive lower. The index closed -0.17% by the final whistle with volumes nearly 15% lower than the average. Measures of volatility rose meanwhile. The VSTOXX was up 5% and at 36 is just below the 40 level of a week ago which was the most since August last year. The VIX rose 15% to close above 21. That takes it just above last week’s high although it’s still a way off the high of 28 it made during February.

Elsewhere, there wasn’t too much to report in rates markets. 10y Gilts edged up a few basis points to 1.310%, Bunds were a basis point higher at 0.060% and peripherals were a touch stronger. 10y Treasuries were 2bp lower but have risen by the same amount this morning so continue to hover around 1.707%. In the commodity space Gold (-0.15%) edged down marginally, while Oil (-1.44%) was also weaker after US inventories fell by less than expected last week.

Probably the most interesting non-referendum newsflow came from the ECB and Greece yesterday after the Central Bank announced that it is reinstating the waiver on Greek debt and so allowing them to be used as collateral to access ECB loans. An associated statement from the ECB said that the Governing Council has acknowledged the commitment of the Greek government to implementing the current ESM program and that it expects continued compliance with its conditionality. On a similar subject, a reminder that on Friday we should be getting the details of the first set of data on the take up on TLTROII.
Wrapping up yesterday’s data flow. In the US we learned that existing home sales rose +1.8% mom in May as had been expected. The FHFA house price index revealed a lower than expected +0.2% mom rise in April however (vs. +0.6% expected). Meanwhile, close to home the consumer confidence reading for the Euro area in June weakened a tad to -7.3 from -7.0 in May. Expectations had been for no change

As we turn to the day ahead clearly markets will be firmly fixed on events in the UK. For completeness however, the rest of the day will also see the release of the flash June global PMI’s. In Europe we get the full set of manufacturing, services and composite data while in the US we just get the manufacturing reading. Also due out across the pond is initial jobless claims data, new home sales for May (expected to fall sharply), conference board’s leading indicators (expected at +0.1% mom) and Kansas City Fed’s manufacturing activity index. The Norges Bank monetary policy meeting is also today (no change expected). Clearly all of this is a bit of a side event however.

See you on the other side!!

END

ASIAN AFFAIRS

i)Late  WEDNESDAY night/ THURSDAY morning: Shanghai closed DOWN 13.59 POINTS OR 0.47% / /Hang Sang closed UP 73.72 OR 0.35%. The Nikkei closed UP 172.63 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.17% Chinese yuan (ONSHORE) closed UP at 6.57774 /Oil ROSE to 49.77 dollars per barrel for WTI and 50.66 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5820 yuan to the dollar vs 6.5774 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES b) REPORT ON CHINA

China issues a stern warning that they are the wrong opponent to play games with.

I wonder what China will do at the comex??

(courtesy zero hedge)

China Warns The US That It Is “The Wrong Opponent To Play Games With”

Two US aircraft carriers, the John C. Stennis and Ronald Reagan, began joint operations in the seas just east of the Philippines over the weekend the US Navy announced on Monday. The operations come during a tense time in the region, as China recently announced that it would not adhere to any unfavorable ruling that may come from The Hague regarding the Philippines formal challenge of territorial claims in the South China Sea.

China has been very clear in its position that the US should stay out of the maritime disputes in the region, however the US has already made it clear that it intends to be the policeman in the region for decades to come, so the move comes as no surprise. Admiral John Richardson, the chief of US Naval Operations said that it was not often the US had two carrier strike groups in the same waters and it was a sign of US commitment to regional security.

According to Reuters, Richardson made a correlation between the Asian deployment and the deployment the US recently sent to the Mediterranean Sea in order to send a message to Russia.

“Both here and in the Mediterranean, it’s a signal to everyone in the region that we’re committed, we’re going to be there for our allies, to reassure them and for anyone who wants to destabilize that region.And we hope there’s a deterrent message there as well.”

A US Pacific Command (PACOM) statement quoted Rear Admiral John D. Alexander, commander of the Ronald Reagan carrier group, as saying it was an opportunity to practice techniques needed to prevail in modern naval operations.

The US Navy has flown, sailed and operated throughout the Western Pacific in accordance with international law for decades, and will continue to do so.

One additional piece to this story is that as Reuters points out, the People’s Daily (the official newspaper of China’s ruling Communist Party, which is often used to express foreign policy views), hadthe following to say about the US decision to send carriers in.

Via Google Translate

Conveying a so-called message about security through the exhibition of military might, and furthermore describing the events as an act of deterrence is something that the U.S. has done far too many times. Regardless of how many times it may have gone smoothly in other parts of the world the U.S. has chosen the wrong opponent by selecting China for this type of game. Behind all of this is lack of patience and brassy moves and it also reveals a nature of hegemony beneath the surface.

* * *

It is obvious that China is getting tired of the games that the US is playing in the region, and no matter how many times China has warned that the US should stay out of its affairs, the US remains steadfast in its effort to police the region. It is only a matter of time before a confrontation takes place, intentional or otherwise, and then the world will be undoubtedly pushed to the brink of war – which would be bullish for stocks of course.

end EUROPEAN AFFAIRS

The daily newspapers sums up the divide in England:

(courtesy zero hedge/all the UK newspapers)

On The Front Covers Of UK Newspapers Today

As Martin Daubney perhaps summarizes it best when looking at the cover pages of two of UK’s most popular tabloids, today’s referendum vote is being spun as one of “Project Hope” vs “Project Fear.”

Here is how the rest of the UK press previews today’s historic vote:

end Martin Armstrong weighs in on the BREXIT vote:  Basically he states that the EU is nothing without Britain: (courtesy Martin Armstrong) Martin Armstrong Rages “The EU Is Nothing Without Britain!”

Submitted by Martin Armstrong via ArmstrongEconomics.com,

The lies being told by Cameron that Britain will suffer are rather astonishing.


It is the EU that has the most to lose on so many fronts it is rather alarming how the press do not tell the truth.

Forget the imports-exports that are just under half of the the trade between the two, which would never stop nor would it be in the EU best interest to cut Britain off. The real key is diplomacy.

Whenever Europe has EVER accomplished something useful, it has always been the UK’ in the driver’s seat.

Any thought that BREXIT would end relations is rather absurd. The EU has nothing without Britain.

The only other country that spends more on its military than the UK is the United States. Germany could not defend Europe nor could France. Without the UK, Europe would have fell to Hitler.

A post-BREXIT that tried to stand on pride in the EU would quickly find itself no longer a  powerful player on the world political stage. Sorry, but the EU is nothing without Britain.

end Nigel Farage admits defeat! And at 5:15 early indications that the remain edge out the leaves by 52% to 48% As I have stated in the past, this is probably the worst outcome for Britain as the pound will rise and they will face a huge immigration problem.  England also will face huge bureaucratic problems with the many restrictions the EU places on England. (courtesy zero hedge) UK Polls Close As Nigel Farage Admits Defeat: “Looks Like Remain Will Edge It”, Sterling Soaring by Tyler Durden EU planning a “social security” tax for robots under a new EU proposal. I have now seen everything! (courtesy Mish Shedlock/Mishtalk) Robots To Pay “Social Security” Under EU Tax Proposal 

Submitted by Michael Shedlock via MishTalk.com,

The EU is studying a proposal that would count robots as people for tax purposes.

Although the proposal is deemed “too early” to implement just yet, rest assured once nannycrats get a bad idea in their heads, it never leaves.

This provides yet another reason to vote in favor of Brexit.

Please consider Europe’s Robots to Become ‘Electronic Persons’ Under Draft Plan.

Europe’s growing army of robot workers could be classed as “electronic persons” and their owners liable to paying social security for them if the European Union adopts a draft plan to address the realities of a new industrial revolution.

Robots are being deployed in ever-greater numbers in factories and also taking on tasks such as personal care or surgery, raising fears over unemployment, wealth inequality and alienation.

Their growing intelligence, pervasiveness and autonomy requires rethinking everything from taxation to legal liability, a draft European Parliament motion, dated May 31, suggests.

The draft motion called on the European Commission to consider “that at least the most sophisticated autonomous robots could be established as having the status of electronic persons with specific rights and obligations”.

It also suggested the creation of a register for smart autonomous robots, which would link each one to funds established to cover its legal liabilities.

The draft motion, drawn up by the European parliament’s committee on legal affairs also said organizations should have to declare savings they made in social security contributions by using robotics instead of people, for tax purposes.

The motion faces an uphill battle to win backing from the various political blocks in European Parliament. Even if it did get enough support to pass, it would be a non-binding resolution as the Parliament lacks the authority to propose legislation.

Three-Fifths Rule

Like slaves in the US before the Civil War, do robots get Three-Fifths of a pre-programmed representation in the European Parliament?

Law of Bad Ideas

The Law of Bad ideas stipulates that bad ideas never go away, they just get worse over time.

At some point in the future, expect to have to register your robots and pay social security taxes on them as well.

When I first penned the “Law of Bad Ideas” I was shocked to discover nobody had used that phrase.

  end Why huge volatility on FX markets today: (courtesy zero hedge) As Of This Moment, Barclays Is Not Accepting FX Stop Loss Orders

Anyone wondering why gaps and volatility in FX, and especially cable is reaching on the absured today, with 100 pips swings in minutes the norm, the reason is that there is virtually no liquidity, and a main catalyst for this is that as HFTs conduct their usual stop hunts to stop out proximal limit orders, they simply find no such stops. They can blame banks such as Barclays for this development: as of 600 GMT this morning, Barclays has stopped accepting new stop loss orders as banks, concerned about today’s vote outcome, seek to cap their exposure to the results of Britain’s referendum on EU membership.

As the Barclays letter shown below states, it would not execute such trades, where the bank seeks to close existing positions for clients at a pre-established price, through its machine-trading algorithms. According to Reuters, Barclays’ refusal of all new stop-loss orders, whether over the phone or through messaging or dealing systems, is extremely rare and a measure of the big banks’ concerns that a vote to leave the European Union would spark similar chaos to that after last year’s blowout on the Swiss franc.

Bank of America Merrill Lynch and UBS both issued communications to clients this week, seen by Reuters, which warn of potential gaps in the services they normally provide to major institutional clients.

Arguments over whether banks could have achieved better prices for stop loss orders were at the heart of legal arguments between financial firms over hundreds of millions of dollars in losses caused by the franc’s surge in January of last year.

“Barclays have advised on Monday that they weren’t accepting stop loss orders via Barx algo execution,” a senior trader with one bank in London told Reuters. “Further they are not accepting any stop loss orders from 7am (today).”

The trading restriction will last until 10pm London time on June 24.

Full Barclays announcement:

Order handling for BARX Corporate

Dear Client,

We wanted to highlight that a price dislocation or illiquid conditions (“Disrupted Market Conditions”) could affect the FX markets at any time.  There, in particular,  is a risk of FX markets trading in wide ranges during the period that includes the UK’s EU Referendum, held on June 23rd 2016, and its aftermath (the “EU Referendum Period”).

Both Barclays Electronic Trading Desk and Barclays Voice Spot Trading Desk will endeavour to operate as close to normal levels of service as the Disrupted Market Conditions allow.  However, taking into account the potential Disrupted Market Conditions during the EU Referendum Period, Barclays has decided to impose certain restrictions on its electronic and voice FX Stop Loss order offering during this period and would like to highlight certain matters with respect to Disrupted Market Conditions.

FX Stop Loss Orders

  • Up until June 23rd 7.00am London time Barclays will continue to accept FX Stop Loss orders in BARX Corporate on a case by case basis at Barclays’ discretion, taking into account market conditions among other factors.
  • From June 23rd 7.00am London time Barclays will not accept any new FX Stop Loss Orders until June 24th 10pm London time.

Considerations for FX Stop Loss Orders during the EU Referendum Period

  • Barclays endeavours to execute all FX Stop Loss Orders in a reasonable manner so as to minimize market impact.
  • Bid-offer spreads are unlikely to be observable in Disrupted Market Conditions.  Barclays will exercise its reasonable discretion in deciding when and how to execute FX Stop Loss Orders, including whether to execute all or part of the order, in accordance with our governance framework and taking into account Disrupted Market Conditions.
  • Barclays will not provide any guarantees with respect to slippage on FX Stop Loss Orders.
  • Barclays endeavours to provide timely communication to clients on their FX Stop Loss Orders fills, on a best efforts basis, to the extent that the Disrupted Market Conditions allow.

We recommend that our clients carefully consider any outstanding FX Stop Loss Orders that they have in place, or may wish to put in place, over the EU Referendum Period.

During the EU Referendum Period Barclays will endeavour to offer a Call Level service on a best efforts basis, taking into account market conditions and other factors.  While we will aim to communicate to clients in a timely manner when their Call Level has been reached, Disrupted Market Conditions may increase the likelihood that the market has moved significantly away from the Call Level by the time we contact the client.

You may wish to consider whether a Call Level is a suitable alternative to a FX Stop Loss Order.  In order to ensure that Call Levels are directed appropriately, please ensure that your contact details are configured within BARX Corporate.

Potential Impact on BARX Corporate

We recommend that our clients carefully consider any outstanding orders that they have or may wish to put in place on BARX Corporate, over the EU Referendum Period.  As noted above, Barclays will not be offering the ability to leave Stop Loss orders from June 23rd through June 24th.

In the event of Disrupted Market Conditions during the EU Referendum Period:

  • BARX Corporate pricing may only be available at wider bid-offer spreads.
  • Low levels of liquidity could cause delays in order execution.
  • BARX Corporate may also cease streaming prices in some or all currency pairs.

Subject to the restrictions set out above, you may choose to continue to place FX Stop Loss orders in the usual way during the EU Referendum Period, however, please be mindful of the potential consequences of doing so in the event of Disrupted Market Conditions.

Note, as part of regular maintenance and value date roll, the BARX Corporate system will be unavailable at 10pm London time, typically resuming before 10.05pm London time in normal market conditions.

Should you have any questions or like to discuss further, please contact your Barclays’ sales representative.

 

end

GLOBAL ISSUES MEXICO

Mexico on the brink of a revolution as people there are fed up with corruption:

(courtesy AntiMedia.Org)

 

Fed Up With The Corruption: Mexico On Brink Of Revolution

Via TheAntiMedia.org,

The Mexican government’s deadly crackdown on a teacher’s union protest has rattled the nation in recent days, as 200,000 doctors on Wednesday joined the ongoing national strike against President Enrique Peña Nieto’s neoliberal reforms.

Anti-government sentiment is mounting after police forces opened fire on a teacher protest in Oaxaca on Sunday, killing at least eight.

Since then, two high level government officials from that state, Oaxaca Minister of Indigenous Affairs Adelfo Regino Montes and Secretary of Labor Daniel Gutierrez, have resigned in protest of the “authoritarian actions that repress and kill Oaxacan people who defend their rights and the government’s negligence to any possibility of dialogue,” as Gutierrez put it.

On Wednesday, members of the medical organization Yo Soy Medico 17 from 32 states joined the ongoing strike, stating their opposition to Peña Nieto’s health reforms, which they say are a “disguised way of privatizing health in Mexico,”according to TeleSUR.

Further, the group —which translates to “I’m a Doctor”—has vocally condemned the killings and what they describe as intimidation and repression by authorities and organized crime. “According to doctors,” TeleSUR explains, “as violence has increased in Mexico they have suffered the consequences of crimes like kidnappings, enforced disappearances and killings that have gone unpunished by authorities.”

The dissident Coordinadora Nacional de Trabajadores de la Educación (CNTE) teacher’s union—which largely represents educators in Mexico’s predominantly rural and Indigenous southern states—has been staging dramatic demonstrations and road blockades against new mandated teacher evaluations, which they say ignore the challenges of their region while enabling mass layoffs.

These protests have been met with violent government repression, including the recent arrest of two of the union’s leaders. But members explain that the government’s opposition to the teacher’s union runs far deeper.

A social media post by the Twitter handle @puzzleshifter has been shared widely as a valuable explainer of the forces shaping the current violence.

“Why would [Peña Nieto] want to fire teachers en masse? Because they teach social justice curriculum as guaranteed under gains made in the Revolution,” they write. As the post explains, these teachers, known as “Normalistas,” work at the same “Escuelas Normales” that the 43 disappeared Ayotzinapa students were training to lead.

The post continues:

Normalistas are passionate about their profession and have a strong desire to impact the lives of children in dire rural poverty in Mexico. Many who become teachers, grew up in same communities/conditions as children they seek to teach – about their ability to change conditions.

According to the Mexican Constitution, rural [Indigenous] children have as much right to education as the children of the wealthy.

This is how and why the Escuelas Normales were instituted. However, ever since they were instituted, they have been egregiously underfunded.

This has resulted in teachers who enter the profession, specifically to teach the most left out kids, in Mexico’s society.

For this, over the years, rural teachers have been accused of bringing kids revolutionary ideas. Many say, of course, that’s our job!

So there’s been a constant battle to stay true to the goals of the Revolution to teach rural kids and Central gov to reign them in.

The government violence has also been criticized by the National Indigenous Congress (CNI) and the Zapatista National Liberation Army (EZLN), which issued a joint communique on Monday blasting the “cowardly police attack,” and assuring the teachers, “you are not alone.”

“We condemn the escalation of repression with which the neoliberal capitalist reform, supposedly about ‘education,’ is being imposed across the entire country and principally in the states of Oaxaca, Chiapas, Guerrero, and Michoacán,” the missive states.

“We call on our peoples and on civil society in general to be with the teachers who resist at all times, to recognize ourselves in them,” it continues. “The violence used to dispossess them of their basic work benefits with the goal of privatizing education is a reflection of the violence with which the originary peoples and rural and urban peoples are dispossessed.”

The fight seems to be just beginning as the union is vowing to “stay here until the government is willing to talk.”

As one teacher from Nochixtlán toldDemocracy Now! on Tuesday: “If tomorrow the government is open to dialogue, then the conflict ends. The governor wants what he calls educational reform. And what we want is a dialogue for the kind of change that the people require, the kind that meets their needs.”

The unnamed educator continued: “If you go to our communities, there are many needs. How are the kids doing? The children can’t go to school to learn. All they think about is eating, because they don’t eat. No one can learn if they don’t sleep well, if they walked many miles to go to school. So the government should go and see what happens firsthand. And until there is a dialogue, we will not end our protest demanding educational reform.”

“And who will revive our dead?” they added. “The dialogue won’t bring our dead back to life. And those who are imprisoned, there aren’t just five or 10, there are thousands.”

As Gustavo Esteva, founder of the Universidad de la Tierra in Oaxaca, further explained, “This is a very complex war. It doesn’t—it did not start in Oaxaca. The teachers’ struggle, it is a global struggle. It started in Colombia, in Brazil, in Chile, in the U.S.—everywhere.”

“[W]e are in a war trying to say a very firm no to this kind of education. It is useless instruction,” he added. “And we are saying no very firmly to all the so-called structural reforms that mean basically a change of only ownership. They are selling our land, our territory. The people are resisting. And then we are resisting with them to oppose this kind of operation.”

end OIL ISSUES

option traders are now most bearish on oil since 2010:

(courtesy zero hedge)

Crude Oil Options Traders “Most Bearish” Since At Least 2010

The ‘skew’ between bearish puts and bullish calls has not been this negatively positioned since at least 2010 (when Bloomberg data began).  

 

“This negative skew developing is moving in sympathy with what we’re observing in the physical market,” according to BNP’s Harry Tchilinguirian, and just as the skew was drastically bullish at the lows in January, one might wonder if the smart-money is right once again…

 

Fundamentally, Tchilinguirian warns that “despite outages of production in Nigeria, we’re not seeing in the curve structure on the physical side any indication of supply shortages, rather to the contrary.”

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

Euro/USA   1.1382 UP .0059 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 105.76  UP 1.13 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4900 UP .0023 (MUCH LESS THREAT OF BREXIT)

USA/CAN 1.2719 DOWN .0094

Early THIS THURSDAY morning in Europe, the Euro ROSE by 59 basis points, trading now WELL above the important 1.08 level RISING to 1.1382; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED DOWN 13.59 POINTS OR 0.47%   / Hang Sang CLOSED UP 73.72 POINTS  OR 0.35%   AUSTRALIA IS HIGHER BY 0.17%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this THURSDAY morning: closed DOWN 103.39 POINTS OR 0.64% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 73.72 POINTS OR 0.35% . ,Shanghai CLOSED DOWN 13.59 POINTS OR 0.47% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE GREEN

Gold very early morning trading: $1159.50

silver:$17.23

Early THURSDAY morning USA 10 year bond yield: 1.726% !!! UP 4 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.541 UP 2 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early THURSDAY morning: 93.21 DOWN 36 CENTS from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

 

 

 

END

 

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield:  3.09% DOWN 5 in basis points from WEDNESDAY

JAPANESE BOND YIELD: -0.140% PAR  in   basis points from WEDNESDAY

SPANISH 10 YR BOND YIELD:1.47%  DOWN 3 IN basis points from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 1.40  DOWN 4 IN basis points from WEDNESDAY

the Italian 10 yr bond yield is trading 7 points lower than Spain.

 

GERMAN 10 YR BOND YIELD: +.093% up 3 FULL  BASIS POINTS ON THE DAY

 

END

 

 

IMPORTANT CURRENCY CLOSES FOR THURSDAY

Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

 

 

Euro/USA 1.1353 UP .0028 (Euro =UP 28 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 105.76 UP 1.106 (Yen DOWN 110 basis points )

Great Britain/USA 1.4804 UP.0022 ( Pound UP 32 basis points/WE AWAIT BREXIT DECISION

USA/Canada 1.2791- DOWN 0.0018 (Canadian dollar UP 18 basis points  AS OIL FELL  (WTI AT $49.12).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 28 basis points to trade at 1.1353

The Yen FELL to 105.76 for a LOSS of 110 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 22 basis points, trading at 1.4804

The Canadian dollar ROSE by 18 basis points to 1.2791, WITH WTI OIL AT:  $50.04

The USA/Yuan closed at 6.5740/

the 10 yr Japanese bond yield closed at -.140% PAR  IN BASIS  points in yield/

Your closing 10 yr USA bond yield:UP 7 IN basis points from WEDNESDAY at 1.759% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.557 UP 6 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 93.53 DOWN 18 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY

London:  CLOSED UP 76.91 OR 1.23%
German Dax :CLOSED UP 185.97 OR  1.85%
Paris Cac  CLOSED UP 85.87  OR 1.96%
Spain IBEX CLOSED UP 183.30 OR 2.11%
Italian MIB: CLOSED UP 642.90 OR 3.71%

The Dow was up 230.24  points or 1.29%

NASDAQ up 76.72 points or 1.59%
WTI Oil price; 50.13 at 4:30 pm;

Brent Oil: 50.85

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.98 (ROUBLE UP 85/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD RISES TO +.093%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:50.13

BRENT: 51.10

USA 10 YR BOND YIELD: 1.746% 

USA DOLLAR INDEX: 93.07 DOWN 65 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4981 UP .0202  or 202 basis pts.

German 10 yr bond yield at 5 pm: +.093%

 

 

 

END

 

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

‘Traders’ Panic-Buy Illiquid Markets Into Brexit Vote Close

Judging by markets, it’s not a cliffhanger…

In fact, for stocks, it’s inconceivable that The Brits vote Brexit…

 

But not every asset class is so excited… here’s where assets have gone this year… it seems bonds and bullion remain a little more worried about ‘something’ than stocks and sterling…

 

The machines went to town into the close…

 

 

Ramp Capital™♿️ @RampCapitalLLC

The Ramp Champ pic.twitter.com/uGOhGp6kVA

3:46 PM – 23 Jun 2016

 

Volume was abysmal…

 

The S&P topped 2,100, and ramped into the close with VIX busted back to a 17 handle…

 

Total panic-buy to Dow 18,000…

 

Today’s gains were all at the cash open…and a late meltup…

 

All driven by a 5am spike in stocks (when JPY was pummeled) – Dow is up over 500 points from Jo Cox’s death…

 

Which squeezed shorts at the open and again into the close…

 

Stocks are within 1% of record highs once again… which makes perfect sense…

 

While stocks were more than happy to “price it in”, hedging remains bid…

 

And extremely divergent today…

 

Financials outperformed on the day (best day in 2 months) but the entire gain was at the open – everything was dead after that…

 

but Financials (ahead of stress tests) remain a little more exuberant than the curve…

 

Treasury yields pushed notably higher (30Y +6bps today to 2.56%) with a significant steepening in the curve this week – yields are at highest sicne June 3rd.

 

The USDollar index slipped modestly lower on the day with some EUR and GBP strength, as JPY plunged early this morning to manufacture a positive open…

 

WTF happened into the close…

 

Gold drifted lower despite the weaker USD but silver and copper rose and crude did it’s daft thing…

 

As Crude’s NYMEX Close was banged once again…

 

Charts: Bloomberg

Bonus Chart: Kinda sad really…

 

end

 

Conflicting data: so what else is new:  initial jobless claims plunge to 42 yr lows.

(courtesy zero hedge)

Hawkish Fed Looms As Initial Jobless Claims Plunge Near 42 Year Lows

Who knows best? The Department of Labor  – who is telling the American public that the labor market, based on initial claims, are hovering near the best levels in 42 years; or The Fed – who is warning that labor market conditions are deteriorating at the fastest pace in seven years?

For the 68th straight week, initial claims were below the ‘magic’ 300k level (the longest streak since 1973)…

Initial jobless claims collapsed this week – down 18k to 259k, basically at its lowest levels since 1973!!

So what will Janet do?

Charts: Bloomberg

end

This is a biggy!  The Chicago Fed’s National Activity index (manufacturing) plunged to negative .51 from +.05.  Expectations were +.11.  Looks like Janet has missed her opportunity to raise rates

(courtesy zero hedge)

Fed’s National Activity Index Plunges In May

Against expectations of a rise to +0.11, Chicago Fed’s National Activity Index plunged to -0.51 (from a revised lower +0.05), hovering at its worst level since January 2014… Under the surface, things are ugly with only 28 of the 85 monthly individual indicators made positive contributions, while 57 indicators deteriorated.

Looks like 2014 was the right time to hiking rates Janet… you missed your window!!

Charts: Bloomberg

end

the flash PMi rebounds in June but still domestic demand remains very weak:

(courtesy USA Manufacturing PMI/zero hedge)

US Manufacturing PMI Jumps In June But “Domestic Demand Remains Worryingly Weak”

Great news… Markit’s US Manufacturing PMI (flash) for June beat expectations, rising to 51.4 from 50.7, driven by the fastest rise in exports since Sept 2014 (cough weaker dollar cough) as Input costs rose by the most in 18 months. Small bounces in production and employment do nothing to dismiss the “worrying weak” domestic demand picture; and, as Markit warns, “the three months to June has seen the worst quarter for manufacturing in terms of both production and employment growth since 2009.”

“Off the lows”?

The latest increase in new business was the strongest since March, although subdued in comparison to the post-crisis average. New orders from abroad expanded at the fastest pace for almost two years, suggesting an additional boost to growth from greater export sales in June. Despite stronger new business growth, a number of manufacturers noted that heightened economic uncertainty had led to delayed decision making and greater risk aversion among clients in June.

Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said:

“The flash PMI for June brought welcome news of improved performance of manufacturing, but the sector still looks to have acted as a drag on the economy in the second quarter, leaving the economy reliant on the service sector and consumers in particular to drive growth.

Any improvement could be largely traced to better export sales, in turn linked to the weakening of the dollar compared to earlier in the year. Domestic demand was again worryingly weak, especially from business customers, meaning overall growth of order books remained subdued.

”It’s encouraging to see the employment trend reviving somewhat, though factories are clearly remaining cost conscious and keeping workforces lean in order to seek productivity improvements.

“Despite the improvement in the current month, the three months to June has seen the worst quarter for manufacturing in terms of both production and employment growth since 2009.”

Charts: Bloomberg

end

 

A good indicator as to what is going on inside the USA economic scene:  new home sales plunge the most in 8 months. Also previous months have seen a downward revision. Also median home prices are tumbling which is also not a good sign;

(courtesy zero hedge)

New Home Sales Plunge Most In 8 Months Following Sharp Downward Revisions; Median Home Price Tumbles

Despite exuberance in existing home sales, new home sales just printed 551k SAAR – missing expectations for the first time since Oct 2015 – sliding by the most since Sept 2015. With the last 3 months of exuberant increases – to 8 year highs – now revised drastically lower; and median prices tumbling to the lowest since June 2015, the picture of the US housing recovery is considerably less rosy than before… time for a rate-hike?

This is what we said last month when new home sales soared to 8 year highs…

Here is what drove the overall surge: a clearly “goalseeked” number resulting from a massive surge in Northeast sales, one which will be promptly revised lower next month.  

And now this happens!!

With sales dropping the most in 8 months…

Even with prices being slashed to 10 month lows…

Charts: Bloomberg

 

end

 

Dave Kranzler states that BREXIT is really a non issue.  The real issue is the collapsing USA economy:

(courtesy Dave Kranzler IRD)

 

BREXIT Is Being Used To Deflect From The Economic Collapse June 23, 2016Financial Markets, Gold, Housing Market, Market Manipulation, Precious Metals,U.S. Economy, , ,

I actually could care less about BREXIT.   I have yet to encounter any valid analysis on why the issue matters at all.  What is valid is that the BREXIT theatrical show is being used to deflect scrutiny of the continuous economic reports  showing that the U.S. economy is collapsing.

The Chicago Fed National Activity index released today plunged to -.51 against Wall Street’s expectation of a .11 gain.  Last months data-point was revised lower to barely positive.  The way that this index is calculated, it takes a lot to move the needle.  A drop from a revised lower .05 to -.51 reflects heavy contraction in economic activity across a broad (85 indicators) spectrum of the economy.  The 3-month moving average declined from -.25 – which was revised lower from the original .22 reported – to -.36.

New home sales reported today – for whatever the data series is worth – indicated an 11% plunge from the previously reported number for April, which of course was revised lower. May’s print was down 6% from the revision.  Ironically,  yesterday the National Association of Realtor’s Chief Economic Clown was extolling the virtues of new home construction and sales activity.  Oops.

I suggested yesterday that existing home sales report was highly overstated by the seasonal adjustments imposed on the data collected.  The Census Bureau, which prepares the new homes sales data series, has admitted in the past its estimation and adjustment models tend to overstate sales when actual sales are in a downtrend.  Ergo, the incessant downward revisions of previous reports.  Same with existing home sales, as the NAR uses the same statistical modelling package as the Census Bureau.  The NAR’s report yesterday contained a significant downward revision for April’s report, not coincidentally.

To be sure, there are still some hot pockets of housing activity around the country.  But most of the large economic areas are experiencing falling demand, falling prices and rising inventory, especially in the upper price segment of the market.  The collapse of the current housing bubble will be even more spectacular than the last bubble collapse.

The U.S. economy is collapsing.  In the “inside out” world of U.S. financial media Orwellian propaganda, today’s jobless claims number is being used to substantiate a “tight labor market.”  That’s a complete fairy tale.  The reason jobless claims are historically low right now is that the number of workers as a percentage of the workforce who qualify to apply for benefits when they get fired is at a historical low.  This fact is substantiated by the historically low labor participation rate and the percentage of the workforce that is now part-time.   Part-timers do no qualify for company healthcare or unemployment insurance.  It’s that simple. the  I would question the data if jobless claims were high.

So the entire financial world is focused on what is largely an irrelevant  referendum  on whether or not the UK will remain in the EU.   Meanwhile, the rug is being pulled out from under the entire western economy, including and especially the U.S. economy.

end

 

And on the same theme as above, the all important leading economic index declined badly in May:

 

(courtesy PRNewswire)

 

Conference Board LEI for the U.S. Declined in MayJune 23, 2016 | PRNewswire

The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.2 percent in May to 123.7 (2010 = 100), following a 0.6 percent increase in April, and a 0.1 percent increase in March.

“The US LEI declined in May, primarily due to a sharp increase in initial claims for unemployment insurance. The growth rate of the LEI has moderated over the past year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “While the LEI suggests the economy will continue growing at a moderate pace in the near term, volatility in financial markets and a moderating outlook in labor markets could pose downside risks to growth.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. was unchanged in May, remaining at 113.5 (2010 = 100), following a 0.2 percent increase in April, and no change in March.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.3 percent in May to 121.9 (2010 = 100), following a 0.2 percent increase in April, and a 0.6 percent increase in March.

 

end

And now your humour event of the day:

(courtesy Hillary Clinton)

Humour: best new song in America!

Speakers on.

Listen to the new #1 song in America.

https://www.youtube.com/embed/MjdPx8cJ27Y

end

 

Well that is all for today

I will see you tomorrow night/quite late

 

Harvey


jUNE 22/Another huge 3.57 tonnes of paper gold enter the GLD/Huge amount of gold standing for July/ Huge amount of silver standing in July as well/Brexit vote tomorrow and momentum swings to the leave side/We now know shy the bookies favour the remain...

Wed, 06/22/2016 - 19:17

Good evening Ladies and Gentlemen:

Gold:  $1,268.00 DOWN $2.50    (comex closing time)

Silver 17.31  unchanged

In the access market 5:15 pm

Gold: 1264.00

Silver: 17.23

.

The June gold contract is an active contract. Last  night we had a good sized 175 notices filed last night, for 17,500 oz to be served upon today.  The total number of notices filed in the first 15 days is enormous at 15,395 for 1,539,500 oz.  (47.884 tonnes)

ii) in silver we had 0 notices filed for nil oz..  Total number of notices served  in the 15 days: 489 for 2,445,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 274.57 tonnes for a loss of 28 tonnes over that period

In silver, the total open interest FELL by 4648 contracts DOWN to 205,618 as THE  PRICE OF SILVER WAS down  19 cents with respect to YESTERDAY’S trading.We have now a new all time silver oi record and a low price to boot. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.028 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia &ex China)

In silver we had 0 notices served upon for NIL oz.

In gold, the total comex gold OI fell by a HUGE 9,653 contracts down to 571,517 as the price of gold was DOWN $19.50 with YESTERDAY’S trading (at comex closing). The bankers got their wish with a big contraction in OI in gold. 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

Fascinating!! on a huge whack job the GLD had another huge deposit!

 

this afternoon: 3.57 tonnes were added into the GLD

Total gold inventory: 915.90 tonnes

SLV

 

.No change in sliv inventory

 

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

1. Today, we had the open interest in silver FELL by 4,648 contracts DOWN to 205,618  the AS THE price of silver was DOWN 19 cents with YESTERDAY’S trading. The gold open interest FELL by a CONSIDERABLE 9,653 contracts DOWN to 571,517 asthe price of gold was DOWN $19.50  YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP 26.98 POINTS OR 0.94% / /Hang Sang closed UP 126.88 OR 0.61%. The Nikkei closed DOWN 103.39 POINTS OR 0.64% Australia’s all ordinaires  CLOSED DOWN 0.07% Chinese yuan (ONSHORE) closed UP at 6.57782 /Oil ROSE to 50.25 dollars per barrel for WTI and 50.81 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5883 yuan to the dollar vs 6.5778 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS 

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN b) REPORT ON CHINA 4. EUROPEAN AFFAIRS

i)Looks like the banking environment is peachy good:  another 900 workers are being cut by the Royal Bank of Scotland.In the last 4 months they have let go 2700 staff.  They have now reported its 8 consecutive annual loss and from this point on it will get progressively worse;

( zero hedge)

ii)Fear mongering at its greatest! UBS warns its clients that they will not be able to trade if a BREXIT occurs!

( zero hedge)

iiiMany of us have wondered why the bookies odds for a BREMAIN are greater than polls. The answer has now been discovered …

a must read..

( zero hedge)

iv)The Balance Sheet of the ECB now climbs to a record high of 3.11 trillion euros as stocks hit 18 month lows. The European banks with their high leverage have a real problem on their hands especially the Italian banks with 18% of all loans non performing!

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

This may influence the BREXIT vote:  Cameron fibbed when he stated that Turkey’s EU membership will not occur until the year 3000.  Now, to the surprise of all, the EU will start EU membership this Friday, one day after the referendum

( zero hedge)

6.GLOBAL ISSUES

Albert Edwards correctly deems the biggest risk to the global economy is the stealth devaluation of the Chines yuan.   The USA/yuan cross has been stable although the Chinese basket of currencies against the yuan has fallen 10% . This will cause further Chinese devaluation.  Unless countries try to lock step devaluation in its own currency, a failure to do so will cause massive deflation in their countries:

( zero hedge/Albert Edwards)

7.OIL ISSUES West Texas intermediate falls below 50 dollars after the DOE disappoints.  Production drops. ( zero hedge) 8.EMERGING MARKETS 9. PHYSICAL STORIES

i)Panicked Brits are buying gold bars by the bucketful!

( zero hedge)

ii)Very strange! The Fed’s Powell warns that the USA dollar libor may disappear at a benchmark due to rigging!!

( GATA/London’s Financial Times)

iii)The Belgium based Euroclear is now looking to apply the blockchain to the gold market. Remember the blockchain is used quite nicely with its original inventor for bitcoin.

( London’s Financial times/GATA)

ivAn extremely important commentary from Lawrie Williams. The most important fact is the continual importing of gold into the UK.  The UK is the dominant physical market in the world and they are now out of gold/  The principal supplier of gold to Switzerland was the UAE

( Lawrie Williams/Sharp Pixley)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i) Existing home sales highest since Feb 2007

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 571,517 for a HUGE LOSS of 9,653 contracts as  THE PRICE OF GOLD WAS DOWN $19.50 with respect to YESTERDAY’S TRADING. .WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR THAT IS JUNE, A VERY ACTIVE MONTH. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 538 for a loss of 68  contracts. We had 64 notices filed YESTERDAY, so we lost 4 contracts or 400 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 56 contracts up to 4,913.This no doubt will be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI FELL by 11,946 contracts DOWN to 412,919. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was POOR at146,878. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was GOOD at 226,698 contracts. The comex is not in backwardation.

Today we had 175 notices filed for 17,500 oz in gold.

 

And now for the wild silver comex results. Silver OI FELL by 4,648 contracts from 210,266 DOWN to 205,618. The OI FELL IN SYMPATHY TO  the price of silver BEING DOWN BY 19 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 40 contracts UP TO  96. We had 0 notices filed YESTERDAY , so we  GAINED 40 contracts or an additional 200,000 oz will stand for metal during non active June contract month. The next big delivery month is July and here the OI fell BY 16,741 contracts down to 67,067. We have a little more than 1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at 56,584 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was HUGE at  109,472. Silver is not in backwardation . London is in backwardation for several months.   We had 0 notices filed for NIL oz.  

JUNE contract month:

INITIAL standings for JUNE

June 22. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  NIL Deposits to the Dealer Inventory in oz 3086.400

BRINKS Deposits to the Customer Inventory, in oz   3599.88 OZ

BRINKS No of oz served (contracts) today 175 contracts
(17,500 oz) No of oz to be served (notices) 363 contracts

36,300 oz Total monthly oz gold served (contracts) so far this month 15,395 contracts (1,539,500 oz)

(47.884 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  150,442.8 OZ  WHAT AN ABSOLUTE FARCE!!!

Today we had 1 dealer DEPOSIT

i) Into Brinks:  7,000.000 oz

total dealer deposit:  7000.00  0z

HOW ON EARTH CAN WE HAVE CONTINUAL EXACT DEPOSITS INTO BRINK

AN ABSOLUTE SHAM!!!

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposits:

 

Total customer deposits; nil   OZ

Today we had 1 customer withdrawal:

i) into Manfra: 128.60 oz (4 kilobars)

total customer withdrawals:  128.60 oz

Today we had 2 adjustments:

i) Out of Brinks:  11,284.65 oz or 351 kilobars were transferred out of the customer and into the dealer Brinks.  (this is a sham transaction)

ii) Out of Manfra:  15,432.000 oz or (480 kilobars)  were transferred out of the dealer and into the customer.  Against my better judgment I am going to say that this is a settlement:

(.48 tonnes)

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 64 contracts of which 29 notices was stopped (received) by JPMorgan dealer and 34 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,395) x 100 oz  or 1,539,500 oz , to which we  add the difference between the open interest for the front month of JUNE (538 CONTRACTS) minus the number of notices served upon today (175) x 100 oz   x 100 oz per contract equals 1,575,800 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.    Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,395) x 100 oz  or ounces + {OI for the front month (538) minus the number of  notices served upon today (175) x 100 oz which equals 1,575,800 oz standing in this   active delivery month of JUNE (49.013 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.013 TONNES) . WE LOST 4 contracts or an additional 400 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 49.013 tonnes of gold standing for JUNE and 53.24 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.013 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008 and now June 22:0.48 tonnes  = 65.175 tonnes still standing against 53.24 tonnes available.  Total dealer inventor 1,711,666.742 tonnes or 53.24 tonnes Total gold inventory (dealer and customer) =8,841,211.501 or 274.99 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.99 tonnes for a loss of 28 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!      end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 22.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  666,422.175 oz

CNT

Scotia Deposits to the Dealer Inventory nil Deposits to the Customer Inventory  602,334.300  oz

JPM, No of oz served today (contracts) 0 CONTRACTS 

(NIL OZ) No of oz to be served (notices) 96 contracts

460,000 oz Total monthly oz silver served (contracts) 489 contracts (2,445,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  23,240,402.2 oz

today we had 0 deposit into the dealer account

total dealer deposit:nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 1 customer deposit:

i) Into JPMorgan:  602,334.300 oz

Total customer deposits: 602,334.300 oz

everyday for the past few weeks, JPMorgan has been bringing in at least 600,000 oz into the silver comex.

 

We had 2 customer withdrawals

 

i) Out of CNT:  605,867.315 oz

ii) Out of Scotia; 60,554.860 oz

:

total customer withdrawals:  666,422.175  oz

   

 

 we had 1 adjustment

i) Out of JPMorgan;  598,688.120 oz was adjusted out of the dealer and into the customer account of JPM

Looks to me like we have our good old fashioned run on silver at the comex/

today 666,422.175 oz leaves the silver comex.

The total number of notices filed today for the JUNE contract month is represented by 0 contracts for NIL oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (489) x 5,000 oz  = 2,445,000 oz to which we add the difference between the open interest for the front month of JUNE (96) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  489 (notices served so far)x 5000 oz +{96 OI for front month of JUNE ) -number of notices served upon today (0)x 5000 oz  equals  2,925,000 of silver standing for the JUNE contract month. We gained 40 silver contracts or an additional 200,000 silver ounces will stand in this non active month of June.   Total dealer silver:  23.346 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   149,388 million oz The total open interest on silver is NOW it close to its all time high with the record of 210,266 being set June 21.2016.  The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. end And now the Gold inventory at the GLD June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx june 22

June 21.:  inventory rests tonight at 915.90 tonnes

end

Now the SLV Inventory June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/ June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495 June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 22.2016: Inventory 333.069 million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.7 percent to NAV usa funds and Negative 2.8% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 61.1% Percentage of fund in silver:37.6% cash .+1.3%( June 22/2016). / 2. Sprott silver fund (PSLV): Premium RISES  to -0.03%!!!! NAV (June 22/2016)  3. Sprott gold fund (PHYS): premium to NAV  FALLS TO +0.36% to NAV  ( June 22/2016) Note: Sprott silver trust back  into NEGATIVE territory at -03% /Sprott physical gold trust is back into positive territory at +0.36%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,WEDNESDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market By Mark O’ByrneJune 22, 20160 Comments

Gold fell again today to its lowest in a week despite continuing uncertainty about the outcome of the Brexit referendum. This is contributing to very significant high net worth and institutional demand in recent days, particularly in the UK, which is leading to “panic” and “supply issues” in the interbank gold market. Supply issues which respected gold analysts and ourselves have warned in recent years would inevitably take place.

Click chart for more

Increasing speculation that Britain may vote to stay in the European Union and hedge fund liquidations are being blamed for the recent price falls. However, bullion dealers such as GoldCore, mints and refineries that cater to the UK market have seen minimal selling this week and in fact there has been a surge in demand again this week.

We believe the price falls are due to hedge funds and banks liquidating positions and shorting the market. As ever, there is the risk that algo and high frequency trading (HFT) may be manipulating prices lower despite very robust physical demand and increasing liquidity issues in the interbank gold market.

Informed, senior sources at the highest level of the gold bullion industry have told us that there is “panic” in the inter bank or institutional gold market. According to the sources one of whom is from a leading Swiss gold refinery, we are in aunique trading climate” that they have never seen before. This is not just due to Brexit but to “a number of factors” and so is likely to continue even after the Brexit referendum.

The market is subject to absolutely “unprecedented conditions” and a degree of illiquidity and “supply issues” not seen even in the immediate aftermath of September 11th, Lehman Brothers and the height of the Eurozone crisis.

Refineries and mints are being advised that bullion banks may take the unprecedented step of “suspending the trading of physical gold.” Premiums have risen on larger orders creating the situation where spreads are higher on larger orders. An example of this is that a 1,000 ounce order worth $12.66 million at current prices is trading at a premium of $0.33 per ounce over a smaller order of 5,000 ounces.

There is also warnings that stop loss orders above 5,000 ounces may not be filled at agreed prices and could be filled at much lower prices. In addition, a number of large liquidity providers in the gold market, such as Intl FC Stone, have increased margins.

Thus counter intuitively, larger high net worth and institutional orders are costing more than somewhat smaller relative orders. This has the effect of discouraging larger buy orders for physical – whether by accident or by design. “Officialdom” does not want surging gold prices in advance of the referendum due to the risks that this poses to the financial and monetary system and therefore prices may be being “capped” prior to the vote tomorrow.

This bodes well for prices in the aftermath of the vote – whether the UK votes to remain or leave in the EU.

Bullion banks “have been panicking” and advising that soon, they may no longer be able to quote prices on large gold bar orders. This response is previously unheard of and indicates the increasing illiquidity in the large gold bar market due to a recent surge in HNW, UHNW and institutional (wealth managers, hedge funds, banks etc) demand across the world coupled with already robust central bank demand.

The increasingly illiquid physical gold market where supply cannot keep up with demand underlines the importance of owning physical bullion coins and bars – either in your possession or having direct legal title to your individual coins and bars. Bullion should be owned in your name or your company’s name and be stored directly in the safest vaults in the safest jurisdictions in the world – outside the financial, banking system.



Gold Prices (LBMA AM)

22 June: USD 1,265.00, EUR 1,122.31 and GBP 862.98 per ounce
21 June: USD 1,280.80, EUR 1,129.67 and GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 and GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce

Silver Prices (LBMA)
22 June: USD 17.20, EUR 15.23 and GBP 11.72 per ounce
21 June: USD 17.36, EUR 15.34 and GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 and GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce


Gold News and Commentary
Gold Holds Two-Day Slump as Investors Count Down to Brexit Vote (Bloomberg)
Fed cautious on rates due to Brexit, hiring slowdown: Yellen (Reuters)
Gold Posts Biggest Loss in Four Weeks as Chances of Brexit Ebb (Bloomberg)
Switzerland gold exports jump 20% to 177.3 mt in May, highest this year (Platts)
Euroclear looks to apply blockchain to gold market (Coin Desk)

Prudent Brits Rush To Buy Gold Bars, Stuff Them In Home Safes (Zero Hedge)
Whatever Britons Decide, Bet on Gold Price Volatility to Profit (Bloomberg)
Why Gold, Why Now? (Holmes via Minyanville)
Economic Anxiety in Divided America (Max Keiser)
A look at the global economic malaise through Deutsche Bank (Marketwatch)
Read More Here

Recent Market Updates
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

Mark O’Byrne Executive Director Published in Daily Market Update

end

 

Panicked Brits are buying gold bars by the bucketful!

(courtesy zero hedge)

Panicked Brits Rush To Buy Gold Bars, Stuff Them In Home Safes

While we have to wait two more days to find if the scaremongering behind Brexit’s “Remain” campaign has succeeded in terrifying enough residents to vote against exiting the EU, one group has been delighted by a Breferendum that has been defined by fear, terror and even more fear: sellers of gold and personal safes.

According to the Telegraph, worried British savers (yes, they still exist in this time of QE and age of NIRP) are scrambling to buy gold bars and “stuffing them in safes at home, data suggests, as fears mount that a Brexit-induced financial meltdown could be just around the corner.”

The paper cites Google search data for the term “home safe” which is running 61% higher than the level at which it peaked in November 2008, the point of the financial crisis, and is now higher than at any point since. In other words, whether intended or not, locals are more terrified of the outcome of Thursday’s vote than the near-collapse of the financial system in the aftermath of Lehmans’ failure.


Google searches for “home safes” are at their highest point since the financial crash

Royal Mint, Britain’s official producer of gold and silver coins and bars, said sales have soared by 32% over the past month, with customers rushing to buy sovereign and Britannia bullion coins and signature gold bars in particular. While our readers hardly need an explanation, the Telegraph notes that “in the event of a major meltdown it is common for savers and professional investors buy physical gold and silver to protect their assets, as historically the value of precious metals rises, as the value of stocks and shares falls.”

But it gets better: ever the opportunists, the newspaper cites “experts” who warned that buying gold bars to store them at home is “nonsense” and instead investors who wish to preserve their nest-eggs “would be better off investing in gold investment funds, which offer better value for money.

Ben Yearsley, investment director at Wealth Club, a financial advice firm, said: “Gold bars are very poor value for money and you run the risk of losing them or having them stolen at home. If you’re going to buy precious metal you might as well buy a gold or silver investment fund, where you will get much better value for money due to economies of scale.”

You read that right: the end of British civilization as we know it may be at hand, at least according to David Cameron, and financial advisors are, well, advising to buy not physical gold – which may be “lost” or “stolen” but rather gold buy gold ETFs: supposedly there “you will get much better value due to economies of scale.”

It was not clear what the hell that statement means, but it sure is hilarious. Yes: please invest in paper gold which will be promptly corzined in a worst case scenario, when ETFs suddenly realize there is no actual deliverable, and stay away from evil physical.

Because it could get lost.

Idiots aside, Laith Khalaf, a senior analyst at Hargreaves Lansdown, Britain’s biggest stockbroker said that “gold has been a popular choice recently as markets have been worrying about the prospects of global economy, and gold works as a store of value, and a hedge against catastrophe.” Or just the outcome David Cameron is certain will be unleashed if more people vote to leave the EU on Thursday.

So buy gold if you listen to David Cameron, just please don’t buy physical: it’s not like London vaults have any of it left: “the Royal Mint also recently announced a new service which
allows the purchase of gold bars in personal pensions, which probably
generated some interest in the yellow metal, though a cheaper way to
access the market is through a gold exchange traded fund.”

 

end

 

Very strange! The Fed’s Powell warns that the USA dollar libor may disappear at a benchmark due to rigging!!

(courtesy GATA/London’s Financial Times)

Fed’s Powell warns that dollar-based Libor could disappear

Submitted by cpowell on Tue, 2016-06-21 23:55. Section:

By Jason Lange and Jonathan Spicer
Financial Times, London
Tuesday, June 21, 2016

Financial markets need to consider the risks of relying heavily on the dollar-based London Interbank Offer Rate because this reference rate could stop being published, Federal Reserve Governor Jerome Powell said on Tuesday as a Fed-convened committee continued to zero in on an alternative to the so-called Libor.

“Market participants are not used to thinking about this possibility, but benchmarks sometimes come to a halt,” Powell said in prepared remarks in New York for a roundtable discussion on a report on alternative reference rates.

Libor is one of the world’s most important benchmarks and about $300 trillion in contracts reference it. But Libor has come under scrutiny since traders at several large banks were accused of rigging its daily rates. …

… For the remainder of the report:

http://www.reuters.com/article/us-usa-fed-libor-idUSKCN0Z72LQ

 

END

 

The Belgium based Euroclear is now looking to apply the blockchain to the gold market. Remember the blockchain is used quite nicely with its original inventor for bitcoin.

(courtesy London’s Financial times/GATA)

Euroclear looks to apply blockchain to gold market

Submitted by cpowell on Wed, 2016-06-22 00:10. Section:

By Philip Stafford
Financial Times, London
Tuesday, June 21, 2016

Euroclear, one of the world’s largest settlement houses, is to make its first foray into emerging blockchain technology by exploring creating a new settlement system for the London gold market.

The Belgium-based settlement house, which houses more than E27 trillion of bonds, equities, funds, and derivatives for customers, has partnered US start-up itBit to explore ways to modernise trading in the precious metal.

The group will look at ways to harness itBit’s blockchain-based clearing and settlement network Bankchain for gold. …

… For the remainder of the report:

http://www.ft.com/cms/s/0/79cf65fe-379c-11e6-a780-b48ed7b6126f.html

 END

An extremely important commentary from Lawrie Williams. The most important fact is the continual importing of gold into the UK.  The UK is the dominant physical market in the world and they are now out of gold/  The principal supplier of gold to Switzerland was the UAE

 

(courtesy Lawrie Williams/Sharp Pixley)

 

 

More anomalous gold data in latest Swiss import/export figures

 

June 22, 2016 lawrieongold

The latest gold import and export data from Switzerland, one of the few countries to report these flows in detail, as usual open up some interesting insights into global supply and demand. Overall Swiss gold exports rose by around 20% month on month to 177.3 tonnes making the country a net exporter in May. Generally Swiss gold imports and exports are pretty much in balance given that it mostly imports gold for re-refining and re-export.

While gold exports from Switzerland to China and Hong Kong both picked up in May, its principal country of imports was again the United Arab Emirates normally a recipient of Swiss gold, not a provider. Indeed in another reversal of normal gold flows, the U.K. was again the biggest importer of Swiss gold in May, necessary, we feel, to meet the big demand in London from the principal gold ETFs which vault their gold there. Exports to the U.S. were also unusually high. Again any gold flows to and from the U.S are normally in the eastward direction. We have surmised before that available supplies of physical gold in London are currently tight and this only serves to add weight to that premise and could also suggest that a similar position is arriving in the U.S. too given recent strong investor demand for bullion.

Re China and Hong Kong, exports to the Chinese mainland were 19 tonnes, up from 13.8 tonnes in April, while exports to Hong Kong were up by a very large 14.5 tonnes to 24 tonnes making the percentage of gold shipped to the Chinese mainland against that shipped directly to Hong Kong (which will also subsequently nearly all find its way to mainland China) at around 44%. This again confirms our oft-repeated mantra that Hong Kong gold imports and exports can no longer be taken as a proxy for the Chinese figures with so much gold now going to the Chinese mainland directly. This is a major change from three years ago when the Hong Kong:China ratio was far higher, but still some media outlets ignore this fact.

Prior to the current year, The U.K. was always a significant supplier of gold to the Swiss refineries which have specialised in melting down and re-refining 400 kg good delivery gold bars into the smaller sizes most in demand in the Asian markets. Thus, as we pointed out a month ago when the previous set of Swiss stats were released – See: Swiss gold data raises new doubts on London’s gold stocks these reversals of gold flows, if they continue, could be an indicator of some serious tightness in supply of physical gold to the markets from traditional sources as noted above.

While exports to China and Hong Kong were substantially higher in May, they remained very weak to that other traditional gold market, India, where gold seems to have fallen out of favour in recent months. In May the figure was only 18.5 tonnes, down 16% from an already low April figure. Taken together with reports of substantial discounts in the local gold price, it appears that Indian buyers are nervous of the substantial gold price rise so far this year and may be holding off purchases in expectation of a price fall.

The other big anomaly in the figures was that the two biggest exporters of gold to Switzerland in May were the United Arab Emirates again with 42.1 tonnes and Hong Kong with 11.6 tonnes although the latter was a net importer in May – not the case in April. Neither of these countries/regions are normally exporters of gold to Switzerland in any significant quantities, but are major trading centres, suggesting that the lower demand from what are probably their biggest normal export markets, India and China respectively has led to inventories running higher than traders are happy with, and with the higher prices prevailing there has been perhaps an incentive to return gold to the Swiss refiners and take profits.

We will thus be following this Swiss import/export data to see if these supply/demand anomalies continue in future months.

https://lawrieongold.com/2016/06/22/more-anomalous- gold-data-in-latest-swiss-importexport-figures/

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

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.5778 ( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.5883) / Shanghai bourse  UP 26.98 OR 0.94%   / HANG SANG CLOSED UP 126.88 OR 0.61%

2 Nikkei closed DOWN 103.39 OR 0.64% /USA: YEN FALLS TO 104.62

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.77/Euro UP to 1.1295

3b Japan 10 year bond yield: RISES  TO -.135%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.62

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  50.25  and Brent: 50.81

3f Gold DOWN  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to +059%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 8.08%/: 

3j Greek 10 year bond yield FALL to  : 7.940%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1266.30/silver $17.22(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 9 in  roubles/dollar) 64.00-

3m oil into the 50 dollar handle for WTI and 50 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.62 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9582 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0825 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU NEW POLLS INDICATES A SWING TO THE BREMAIN.

3r the 9 Year German bund now NEGATIVE territory with the 10 year FALLS to  + .059%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.697% early this morning. Thirty year rate  at 2.506% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Eerie Calm Across Markets One Day Before The Main Event: Asia, Europe, US Unchanged

There is an eerie quiet across markets, one day before the year’s main risk event: with the UK referendum vote starting in less than 24 hours and results due out shortly after, it is as if even the algos have stopped frontrunning other algos, in a market so thin and illiquid even the smallest order can result in a gap, either higher or lower. As a result, European, Asian stocks and S&P futures are little changed ahead of Thursday, with the Stoxx Europe 600 Index swinging between gains and losses more than five times so far today.

As Chihiro Ohta, a senior strategist at SMBC Nikko Securities Inc. in Tokyo summarized: “what investors hate the most is uncertainty. Most are just waiting on the sidelines to see what happens.” Apparently Chihiro – as well as Janet Yellen – forgot that there is no such thing as certainty in the market, or least there wasn’t before central bankers took over.

So for now, as “sidelined” investors wait, the MSCI All-Country World Index was little changed following three days of gains as bookmakers’ odds implied there’s only about a one-in-four chance that Britons will opt to leave the EU in Thursday’s referendum, even as the FT poll of polls gives Leave a small advantage. Sterling rose against most of its 16 peers and shares in emerging markets advanced for a fourth day. Crude oil was set to close above $50 a barrel for the first time in almost two weeks following yesterday’s sharp drop in inventories according to API.

As we approach Friday, the first day when Brexit will be in the rearview mirror, the question is how much of a “Remain” vote has been priced in: global stocks have climbed in the past three days as odds of a so-called Brexit fell at betting shops after the murder of a U.K. lawmaker who favored staying in the EU on Thursday. The implied chance of a leave vote dropped to about 25 percent from 43 percent a week ago.

Here is how Deutsche Bank evaluates the market-implied odds:

The shift in opinion poll momentum towards ‘remain’ over the weekend has perhaps reversed a touch over the last 48 hours and the FT poll of polls is still forecasting a close run outcome. The betting market though suggests a much greater bias towards ‘remain’ and is currently predicting a 79.4% chance of success based on the Bloomberg indicator of political odds at bookmakers. That’s at the upper end of what’s been a wide range over the last month or so. Indeed the implied probability peaked at around 85% back at the end of May – where it held for some 10 days or so – before then toughing to a low of 61% intraday on the 16th June. So the probability is now 6% off the highs and 18% up from the lows.Whether this high number has an inbuilt expectation of a late shift towards the status quo (as with Quebec and Scotland referendums) we don’t know.

Some think they do know, and believe there is still some upside should Leave lose tomorrow: “‘Remain’ is not completely priced in as the costs of a ‘Leave’ could be quite large,” said Daniel Murray, head of research at EFG Asset Management in London. “It’s clear that betting odds are skewed towards remain at the moment, which is the main data the market will be moving on until there is a clear outcome.”

In this muted, illiquid environment, there was still some upside, with the MSCI AC World Index adding less than 0.1% as of 10:55 a.m. in London. The Stoxx Europe 600 Index swung between gains and losses more than five times after capping their biggest three-day advance in almost 10 months yesterday. The FTSE 100 Index of U.K. stocks rose for a fourth day in the longest run of gains in two weeks. S&P500 futures rose 0.1 % after the U.S. index closed higher in a zigzag session Tuesday. Adobe Systems Inc. fell 5.2 percent in pre-market New York trading after forecasting revenue in the current quarter that may miss analysts’ estimates amid slowing momentum for its cloud-based products. The MSCI Emerging Market Index rose 0.4 percent, following a 3.2 percent jump over the last three days. Chinese stocks led the advance on Wednesday, with the Shanghai Composite Index climbing 0.9 percent to a two-week high.

The yield on U.S. Treasuries due in a decade retreated from a two-week high, falling two basis points to 1.69 percent. The Fed’s Yellen reiterated on Tuesday that a vote to leave the EU could have “significant economic repercussions,” even as she warned against exaggerating its global impact. She had said on June 15 that Brexit risks played a part in the Federal Open Market Committee’s decision to hold off from raising interest rates. Yellen is scheduled to give a second day of testimony before lawmakers Wednesday.

This is where global markets stood as of this moment:

  • S&P 500 futures down less than 0.1% to 2080
  • Stoxx 600 up less than 0.1% to 340
  • FTSE 100 up 0.2% to 6237
  • DAX up 0.4% to 10059
  • German 10Yr yield down less than 1bp to 0.04%
  • Italian 10Yr yield down 2bps to 1.43%
  • Spanish 10Yr yield down 2bps to 1.49%
  • S&P GSCI Index up 0.5% to 382.2
  • MSCI Asia Pacific down less than 0.1% to 130
  • Nikkei 225 down 0.6% to 16066
  • Hang Seng up 0.6% to 20795
  • Shanghai Composite up 0.9% to 2906
  • S&P/ASX 200 down less than 0.1% to 5271
  • US 10-yr yield down 2bps to 1.69%
  • Dollar Index down 0.1% to 93.93
  • WTI Crude futures up 1% to $50.33
  • Brent Futures up 0.7% to $50.99
  • Gold spot down less than 0.1% to $1,267
  • Silver spot down 0.4% to $17.22

Top Global News:

  • Stocks Trade Near Week High Before Brexit Vote; Commodities Gain: Pound approaches 5-month high, oil rises with copper
  • Yellen Leads Fed in Retreat as Reasons for Rate Hikes Fade: Economists see Fed chair in group calling for one 2016 hike
  • Tesla Takeover of SolarCity Not a ‘No-Brainer’ for Investors: Oppenheimer analyst Colin Rusch downgrades Tesla to perform
  • Gun-Curb Compromise Gaining Bipartisan Support in Senate: Republican Collins would ban gun sales to those on no-fly list
  • FedEx Sees Profit in Line With Estimates on Moderate Economy: Co.’s outlook excludes just-acquired TNT Express
  • Trump Beats Clinton for Investor Confidence in National Poll: Cash, gold top choices for those who plan to alter investments
  • McDonald’s Gets Half Dozen Bids for China, H.K. Sale: Reuters: Co. gets bids from Beijing Tourism Group, Sanpower, ChemChina
  • Fortune Brands to Replace Cablevision in S&P 500: Churchill Downs to join S&P MidCap 400 after close of trading Thursday
  • Oil Explorers Embrace the Sharing Economy to Drill Cheaper Wells: North Sea drillers share warehouse of spare parts, tools
  • Oil Trades Above $50 as U.S. Crude Stockpile Glut Seen Easing: Nationwide inventories decrease by 5.2m barrels: API

Looking at regional markets, Asia equities saw mixed trade with markets tentative as we approach closer towards the UK Referendum with the effects of the Remain momentum slightly waning. Nikkei 225 (-0.6%) underperformed with strength in JPY pressuring stocks and souring sentiment for exporters, while ASX 200 (+0.1%) was supported by Financials and Energy sectors after WTI briefly broke above USD 50/bbl following an API inventory drawdown. Elsewhere, Chinese markets traded higher with the Shanghai Comp (+0.9%) recovering from early pressure after another consecutive firm injection by the PBoC. 10yr JGBs saw flat trade with the risk-averse sentiment in Japan and the BoJ buying operations failing to underpin demand.

Top Asian News

  • China Money Rate Increases Most Since March as Banks Hoard Cash: 14-day repurchase rate climbs 14bps to 2.93%
  • Japan Unilateral Intervention Said Unlikely if Brexit Approved: G-7 statement, currency swaps use seen as options on Friday
  • Powerful Storm Set to Hit Asian Bank Profits, McKinsey Says: Slower growth, weaker balance sheets may cripple ROEs
  • Hong Kong’s Richest Man Calls for Higher Tax Amid Wealth Gap: Li Ka-shing says govt should give city’s youth more options
  • SoftBank’s Arora Steps Down as Son Chooses to Stay in Charge: Co.’s president departs after Supercell purchase closed
  • Mitsubishi Motors Sees First Loss in 8 Years Amid Scandal: Co. sees 205b yen impact from fuel testing fraud

In Europe, equities remain cautious ahead of the key risk event in the EU referendum, as such the Euro Stoxx (-0.06%) has been relatively flat for much of the morning albeit slightly softer. While notable underperformance has been seen in the FTSE MIB with Italian banks leading the way lower. Additionally, price action in credit markets has also been muted with yields near flat across the German curve, while there has been outperformance in peripheral yields.

Top European News

  • H&M Earnings Decline on Weakest Sales Growth in 3 Years: Retailer says dollar’s strength will continue to inflate costs
  • Merkel-Hollande Brexit Plan Said to Amount to Statement of Unity: EU risks months of volatility as key leaders preoccupied
  • Ryanair CEO Says Brexit Vote Could Cause Whole of EU to Unravel: Says ‘Leave’ victory to mark end of European project
  • Volkswagen Seeks to Quell Investor Uprising on Emissions Damages: Co. holds first shareholder meeting since scandal broke
  • Ex-Deutsche Bank Executive in Asia Sues Lender for $17m: Douglas Morton files claims to Hong Kong labor tribunal
  • Debenhams Falls as 3Q Trading Slows, Cut to Hold at Peel Hunt: 3Q update shows constant currency LFL sales down 1.6%

In FX, sterling appreciated 0.05 percent to $1.4659, after reaching a five-month high of $1.4783 on Tuesday. It’s jumped 3.2 percent over the past five sessions. Since British lawmaker Jo Cox’s murder last week “a fair bit of repricing has occurred in the pound on the back of the shift in polls that were earlier clearly favoring Leave,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “The pound will definitely be volatile ahead of the vote.” The Bloomberg Dollar Spot Index fell 0.2 percent, after snapping a four-day losing streak on Tuesday. The yen climbed 0.3 percent to 104.40 versus the greenback, extending this month’s advance to about 6 percent. The Australian and New Zealand dollars appreciated 0.5 percent.

In commodities, crude oil rose 0.9 percent to $50.31 a barrel in New York as U.S. industry data showed crude stockpiles declined, trimming a glut. Inventories fell by 5.2 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show supplies slid by 1.5 million barrels, slipping for a fifth week while still more than 100 million barrels above the five-year average. “The oil price will probably continue to labor around this $45 to $50 a barrel area for some time,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “Demand is still under question. Inventories are declining, but they’re still large and will cap any significant rally.” Gold slipped 0.1 percent, after sliding 2.4 percent over the last two days.

On the again quiet US calendar, we have the FHFA house price index for April, as well existing home sales for May (which are expected to have risen +1.8% mom). Fed Chair Yellen is due to speak again, this time in front of the House Financial Services Committee at 3pm BST. Prior to this the Fed’s Fischer is due to speak in a panel at a Riksbank conference.

* * *

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities remain cautious ahead of the key risk event in the EU referendum
  • Price action in FX markets is somewhat mutes with Cable hovering around the 1.47 level
  • Highlights Include Fed’s Yellen, DoE Crude Oil Inventories and US Existing home sales
  • Treasuries higher in overnight trading as global equities mixed, gold sells off ahead of tomorrow’s Brexit vote; week’s auctions conclude with $28b 7Y notes, WI yield 1.485%, compares with 1.652% awarded in May.
  • Fed Chair Janet Yellen sketched a cautious and uncertain view of the economy in testimony before lawmakers in Washington Tuesday; will appear before the House Financial Services Committee today at 10am ET
  • Britain entered the final day of campaigning before its referendum on European Union membership with opinion polls and financial markets at odds about the outcome
  • Markets in London are bracing for what could be a wild ride in everything from foreign-exchange to stock trading as the U.K. votes on European Union membership
  • The pound climbed toward a five-month high versus the dollar as traders took cues from betting odds that point to the U.K. voting to stay in the European Union, rather than opinion polls showing the referendum is too close to call
  • Japan’s Ministry of Finance views unilateral intervention as an unlikely tool in the event of a surge in the yen on Friday should the U.K. vote to leave the European Union

DB’s Jim Reid concludes the overnight wrap

In markets the last 24 hours has seen activity slow down and calm restored. The polls remain close though with the only one from yesterday being the Survation phone poll in the UK morning session which showed a 45/44% narrow lead for ‘remain’. The shift in opinion poll momentum towards ‘remain’ over the weekend has perhaps reversed a touch over the last 48 hours and the FT poll of polls is still forecasting a close run outcome. The betting market though suggests a much greater bias towards ‘remain’ and is currently predicting a 79.4% chance of success based on the Bloomberg indicator of political odds at bookmakers. That’s at the upper end of what’s been a wide range over the last month or so. Indeed the implied probability peaked at around 85% back at the end of May – where it held for some 10 days or so – before then toughing to a low of 61% intraday on the 16th June. So the probability is now 6% off the highs and 18% up from the lows. Whether this high number has an inbuilt expectation of a late shift towards the status quo (as with Quebec and Scotland referendums) we don’t know.

As mentioned at the top last there was a big live BBC televised debate on Brexit at Wembley Arena last night involving 6000 in the audience. It wasn’t quite as epic as Game of Thrones but it was the biggest event of the campaign. The betting odds were little changed over the course of the program. Meanwhile, in an interview with the Telegraph newspaper, PM David Cameron ‘guaranteed’ that he would use a vote to remain to push for further reforms on rules concerning freedom of movement. The last 24 hours has also seen the Daily Mail confirm that they are backing the ‘leave’ campaign (and so putting it at odds with the Mail on Sunday) and influential football icon (to some) David Beckham confirm his backing for ‘remain’.

Sterling traded as high as 1.478 yesterday (roughly +0.6% on the day) which is actually the highest since January, before weakening from lunchtime onwards to eventually close at 1.466 (-0.31% on the day) following that close outcome from the Survation poll. It’s up about +0.25% this morning. It’s worth noting that since the intraday lows of last Thursday however, the Pound is up an impressive +4.6%. Meanwhile, European equities advanced again although gains were a lot more modest compared to Monday with markets seemingly in more of a consolidation mode. The Stoxx 600 closed +0.70% which puts the three day gain at an impressive +5.84% and the most in ten months. The FTSE 100 was up a lesser +0.36% as that early rally for Sterling created a bit of a headwind. European credit indices ran out of steam a bit meanwhile and finished a touch wider by the close of play.

Across the pond markets were in a similar consolidation mode. The S&P 500 ended up +0.27% with credit indices performing a little better (CDX IG -1.5bps). Fed Chair Yellen’s semi-annual testimony comments were a bit of a sideshow given the overriding focus on the referendum although in truth there was little new or interesting to come out of them. She reiterated further the need for ‘proceeding cautiously’ in raising the federal funds rate to ‘keep the monetary support to economic growth in place while we assess whether growth is returning at a moderate pace’ and whether ‘inflation will continue to make progress toward our two percent objective’. As expected she downplayed reading too much into one or two employment reports while also making mention of other timely indicators of the labour market as looking favourable. Yellen also confirmed ahead of Thursday’s vote in the UK that the Fed will closely monitor what the ‘economic consequences will be and are prepared to act in light of that assessment’.

As we refresh our screens overnight, most Asian bourses are following the lead from Europe and Wall Street yesterday and trading with modest gains. The Hang Seng (+0.35%), Shanghai Comp (+0.45%), Kospi (+0.47%) and ASX (+0.42%) in particular are all up a touch, although markets have moved in lower in Japan (Nikkei -0.44%) with that perhaps reflecting a slightly stronger session for the Yen (+0.30%) this morning. Gold is flat following two days of consecutive heavy falls, while Oil markets are up about half a percent.

Moving on and taking some brief respite from all things Brexit. Yesterday in Germany the Constitutional Court delivered a positive verdict on the constitutionality of the ECB’s OMT by ruling that the complaints have been partly inadmissible and could therefore not be challenged before the GCC. Our European economists noted that the GCC reiterated the conditions mentioned by the ECJ and stated that the German Bundesbank may only participate in the implementation of OMT if these prerequisites are met (for example, limits set at the outset, bonds to be held to maturity only in exceptional cases, etc). Our economists disagree with the view that the German court capitulated. Instead, they saw the conclusion as more constructive given that the two most important constitutional courts in the EU exchanged arguments from a national and European point of view and in the end came up with a consistent opinion on the mandate and actions of a major EU institution.

While we’re on the subject of the ECB, yesterday President Draghi confirmed that the Bank is ‘ready for all contingencies following the UK’s EU referendum’. Draghi added that while it was ‘very difficult’ to predict how the vote could impact markets, he confirmed that ‘we’ve done all the preparations that are necessary now’ and that the Bank stands ready to act if needed.

Changing tack, yesterday we published another Credit Bites (Rating trends still firm but deteriorating) where we tried (for a short while at least) to think of something non-Brexit related to write about. In it we showed how credit fundamentals – as reflected by rating trends – remain in reasonable shape. That said in Europe they have certainly been moving in the wrong direction in recent months. In the US we have seen a more notable downward trend in ratings although this has largely been driven by the energy and natural resources sectors. See the report from yesterday afternoon or emailNick.Burns@db.com if you haven’t got a copy.

Wrapping up the data flow yesterday which was focused solely in Europe, the German ZEW survey for June was the biggest highlight. The data exceeded expectations with the headline current situations print rising 1.4pts to 54.5 (vs. 53.0 expected). Even more impressive was the 12.8pt rise in the expectations component to 19.2 (vs. 4.8 expected) which is the highest level since August last year. Given Thursday’s impending event, the data looks surprisingly upbeat.

end ASIAN AFFAIRS

i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed UP 26.98 POINTS OR 0.94% / /Hang Sang closed UP 126.88 OR 0.61%. The Nikkei closed DOWN 103.39 POINTS OR 0.64% Australia’s all ordinaires  CLOSED DOWN 0.07% Chinese yuan (ONSHORE) closed UP at 6.57782 /Oil ROSE to 50.25 dollars per barrel for WTI and 50.81 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5883 yuan to the dollar vs 6.5778 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES b) REPORT ON CHINA EUROPEAN AFFAIRS

Looks like the banking environment is peachy good:  another 900 workers are being cut by the Royal Bank of Scotland.In the last 4 months they have let go 2700 staff.  They have now reported its 8 consecutive annual loss and from this point on it will get progressively worse;

(courtesy zero hedge)

More Banker Layoffs: RBS To Cut Another 900 Jobs

Bank layoffs are now coming at a rapid pace in what is a clear sign of desperation by the firms to cut costs enough to keep shareholders happy as NIRP continues to hammer bank profits.

On the heels of Bank of America announcing that 8,000 employees would be fired last week, we now learn that RBS will be cutting 900 jobs as well, in areas such as IT and other back office positions that support the commercial, retail and private bank will be cut in Britain. The latest round of cuts takes the total number of layoffs in the last four months to roughly 5% of the bank’s british workforce, as at least 2,700 staff across the country have been let go since the beginning of March according toReuters.

As we noted earlier this year, RBS reported its eighth consecutive annual loss in 2015, and the bank which is 73% state owned after a $64 billion bailout, is trying desperately to restructure itself in order to return to profitability.

Sources tell Reuters that more layoffs are expected to be announced in the coming months as well.

“We understand how difficult this is for our staff and will be offering as much support as we can including redeploying to other roles where possible” the bank said in a statement.

* * *

In summary, even after the massive amount of bank layoffs that have taken place we can expect even more in the future as growth strategies have clearly turned to cost cutting strategies in order to conserve any type of profit in this healthy global economy.

end Fear mongering at its greatest! UBS warns its clients that they will not be able to trade if a BREXIT occurs! (courtesy zero hedge) UBS Warns Its Clients They May Not Be Able To Trade At All After Brexit

With less than two days until the outcome of the Brexit referendum, traders around the world know two things: in a scene reminiscent of Lehman Sunday, everyone will be ready to trade the nanosecond the first results are released resulting in a supernova of volatility and an unprecedented burst in volume or… markets will simply grind to a halt as banks refuse to take risk positions and execute client orders, all bids and offers are withdrawn as the last trace of liquidity evaporates, and central banks are forced to start trading with each other in the open market.

As the following just released warning from UBS to its clients reveals, it will probably be the latter, to wit:

Regardless of the outcome, we may see an increase in volatility and an impact on trading volumes. In the event that extreme market moves occur in an environment of limited liquidity, our principal spreads may widen for both electronic and voice trading, liquidity may reduce and prices may turn indicative (i.e., non-tradable) for periods of time.

Full UBS email.

END

Many of us have wondered why the bookies odds for a BREMAIN are greater than polls. The answer has now been discovered …

a must read..

(courtesy zero hedge)

Something Strange Emerges When Looking Behind The “Brexit” Bookie Odds  

Two days ago we pointed out something surprising: according to Ladbrokes’ head of political betting, Matthew Shaddick, the key catalyst that moved bookie odds on Monday morning, the first day after the suspended campaign in the aftermath of Jo Cox murder was resumed, “we took a £25,000 bet on Remain this morning which helped move the odds in their direction.” This in turn unleashed a global asset surge, as markets rebounded on expectations the Leave campaign was losing momentum, even as actual polls – still neck and neck – did not validate such an observation.

Earlier today, Bloomberg confirmed as much:

Investors are piling money into bets on a victory for the “Remain” campaign, led by Prime Minister David Cameron. The pound has surged to a five-month high and European stocks just posted their biggest three-day gain in almost a year, with the U.K.’s benchmark index erasing its monthly decline. Bookmakers have shortened their odds on a vote to stay.

Polls, meanwhile, say the race is too close to call after a swing toward the “Leave” campaign came to an apparent halt last week following the murder of Labour Party lawmaker Jo Cox, a supporter of staying in the EU.

“Rising anticipation that ‘Remain’ will win the vote is driving the market,” said John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva. “Even if polls are close, people are paying more attention to the bookmakers because that was a much better predictor in past referendums.”

Talking to CNBC, Shaddik quantified the latest odds, which not surprisingly, put Remain’s chances of success some three times greater than those of Leave: “at the moment, the odds are suggesting there is a 76 percent chance the U.K. will vote to stay in the European Union”, once again caveating that this is “despite the polls still showing this is more or less a dead heat.”

But is that really the case?

When one looks at the actual dynamics within the bookies, an odd divergence emerges. As Shaddick said, when looking at the underlying flows determining bookie odds, there is a very clear divergence when it comes to number of bets versus the amount of any given bet: “Although Ladbrokes has received a higher volume of bets to leave the EU, those making a punt on remain were placing higher financially larger. Shaddick revealed the average stake on a bet to remain was £450, compared to £75 on a bet to leave.

In other words, a few large bettors are skewing the bookie odds dramatically in the favor of Remain, even as the mass of bettors is betting on Leave, albeit with smaller cash amounts. Another way of putting it: a substantially outsized influence by a wealthy minority over the poor majority, just like in every other aspect of life.

Moments ago Ladbrokes confirmed as much when it pointed out that while the probability of Brexit remains at only 24%, two thirds or 62% of all bets being placed today are for Leave, the same as yesterday.

View image on Twitter

Ladbrokes Politics @LadPolitics

Ladbrokes: 62% of all bets today are for LEAVE, unchanged from yesterday. Brexit probability remains at 24%

7:45 AM – 22 Jun 2016

In a tweet, Ladbrokes also noted the stark divergence in bet sizes which is prompting the skew in the line, which while modestly less than what Shaddick told CNBC, still showed the average Remain vote as 5x greater than Leave:

Ladbrokes Politics @LadPolitics

Ladbrokes: Average bet size
REMAIN £376
LEAVE £72http://lbrk.es/o2Uo301wd91 

8:47 AM – 22 Jun 2016

One simple, if very cynical explanation, is the following: wealthy financial entities, including local banks and rich individuals, all of whom have an interest in keeping the UK in the EU and preserving the status quo, are placing far larger bets, even if their number is ultimately far lower than the number of people betting on Brexit. And in yet another case of reflexivity, with the public seeing that “Remain” is winning based on bookie odds, it is shifting popular sentiment toward Remain, even as the vast majority of bets is actually for Leave.

To be sure, none of this is broken down when either the investing or general public see the bookie odds: they just note 76% chance of Leave, when in reality almost two thirds of bookie bettors are voting to Leave, despite not having nearly the financial capacity to offset the bookie line as a result of the few massive bets being placed on the other side.

Of course, the actual referendum is a democratic, and popular one, not one where the rich can influence or buy votes, and as such far more important is not the skew to the Brexit or Bremain line due to outsized bets, but the actual number of bets in any direction. As such, it would be certainly useful to the British voting public to know not just the bottom line odds, but how they got to where they are, which as Ladborkes admits, it “has received a higher volume of bets to leave the EU.

Substantially larger in fact, some 62% to 38%, which also explains the dramatic divergence between the neck and neck polling and the actual Brexit odds which see Remain winning with whopping 76% odds. Because it is those 38% supports of Remain, whose outsized bets are driving not only the reported odds, but also global market sentiment.

The real question is whether that same wealthy minority which is influencing bookie odds will also be able to manipulate the final Referendum outcome in less than 24 hours.

end Then bang! With one day to go momentum swings to the leave side: (courtesy zero hedge) Cable Tumbles After Latest Poll Show “Leave” Leads  

It’s not just the weather*U.K. POLL ON EU SHOWS 44% REMAIN, 45% LEAVE: OPINIUM. This is a rise of +1 for “Leave” while “Remain” is flat. Cable dropped to the lows of the day on the news…

 

END

 

Then at 5 pm:

 

Pound Spikes After Two Latest Brexit Polls Show Remain In Lead, JPM Poll Finds “Small Lead For Remain”

Update: here are the last two polls of the day:

ComRes:

  • 48% Remain (last 45%)
  • 42% Leave (last 45%)

YouGov:

  • 51% Remain (last 42%)
  • 49% Leave (last 44%)

With the following caveat: the YouGov poll weighted & asking don’t knows likely to vote.

And some further upside for cable:

* * *

After a subdued close, moments ago sterling jumped above 1.47 again, following an internal Brexit poll tracker from JPM according to which it found a “small lead for remain”

This follows JPM’s report from Friday according to which it had found a 3-5% lead for “leave.” That said, JPM’s poll tracker is nothing more than a compilation of already available polls. This is how JPM’s Malclom Barr explained it:

We have three online polls to add since our last update. We understand that two telephone polls based on pre-vote fieldwork (from ComRes and IPSOS MORI) remain to be published, and our results will be sensitive to what they show. But on the basis of the data in hand, our clean-up process suggests a 2%pt lead on average for remain in the polls published this week, with around 9% of the vote undecided. Our measure of the trend through the week-to-week noise now sits at a 0.6%pt lead for remain. The table below summarises the data.

 

 

Both financial and betting markets appear to have moved in the direction of lowering the odds of a vote to leave, with the latter putting the odds near 25%. In our view, that appears to be putting a lot of weight on the idea that (a) the levels of report extracted from an analysis of the polls are broadly accurate, and (b) that status quo bias will give a further boost in support for remain as the vote take place. We have our doubts about both of these assumptions – the evidence in the polling regards status quo bias this time around is rather mixed, and nothing we see in the polling suggests to us that the range of potential error is small. Rather subjectively, this feels closer to a 55-45% than 75-25% to us.

And now we await the latest polls from Comres and Yougov, both of which are due momentarily.

 

end

The Balance Sheet of the ECB now climbs to a record high of 3.11 trillion euros as stocks hit 18 month lows. The European banks with their high leverage have a real problem on their hands especially the Italian banks with 18% of all loans non performing!

(courtesy zero hedge)

ECB Balance Sheet Hits Record High (With Stocks At 18-Month Lows)

Draghi, we have a problem.

The European Central Bank’s balance sheet has reached a new record high this week – surpassing the chaotic expansion peak in 2012 – as Mario Draghi prepares to unleash TLTRO-II, which will definitely increase this time (just like LTRO and NIRP didn’t!)

“Fool me once” in 2011/12 but not in 2015/16.

Given the utter failure to create any ‘real’ economic gains via the expansion of the ECB balance sheet, the plunge in stock prices (and thus crushing the trickle-down wealth-creation mandate) leaves Draghi in the same boat as Yellen – utterly impotent.

Which is ironic because this is what Draghi just said…

  • *DRAGHI SAYS ECB ACTION PUT RECOVERY ON MORE SOLID FOOTING
  • *DRAGHI SAYS GROWTH, INFLATION WOULD BE LOWER WITHOUT ECB ACTION

Though we’ll never know, can you imagine just how bad things are in reality?

end RUSSIAN AND MIDDLE EASTERN AFFAIRS

This may influence the BREXIT vote:  Cameron fibbed when he stated that Turkey’s EU membership will not occur until the year 3000.  Now, to the surprise of all, the EU will start EU membership this Friday, one day after the referendum

(courtesy zero hedge)

In Surprise Twist, EU Will Resume Turkey EU Membership Talks Just Days After Brexit Referendum

It appears that David Cameron may have fibbed a bit when he said that one of the most contentious issues behind the Brexit campaign, namely the treatment of Turkish EU membership, won’t be a topic for “decades” and that Turkey won’t join the EU until the year 3000. As AFP reports, “The EU will open new membership talks with Turkey as planned in a few days, EU diplomatic sources said Wednesday, just as Ankara’s accession becomes a hot-button issue in Britain’s vote on its future in the bloc.” Citing a source, who asked not to be named, AFP said that EU member states will meet June 30 to agree to open a new negotiating chapter with Turkey.

This means that just days after the Leave campaign may end up winning the Brexit referendum based on the PM’s promise that a Turkish admission into the EU is off the table, the topic of Turkish ascension will once again be front and center, and as we explain below, Turkey will likely end up getting what it wants.

As UK’s Express writes, “the latest announcement will fuel fears EU officials are trying to keep any visa deal with Turkey secret until after the historic referendum.  Turkey’s membership of the bloc has been a hot topic of the Brexit debate as critics press Mr Cameron on whether he would use Britain’s right to veto their entry or not. Brexit supporters have said the UK faces the arrival of millions of Turks if it chose to stay in the EU.”

However, the Prime Minister said there is no prospect of Turkey becoming a member anytime soon.  His comments came after audience member Michael Tindale asked Mr Cameron if he would “veto the accession of Turkey into the EU”.

The Prime Minister, who has been a long-time supporter of Turkey joining the union, brushed off concerns, replying: “I don’t think it’s going to happen for decades, so as far as I’m concerned the question doesn’t arise.”

Turkey has been negotiating for membership for more than a decade.  The EU promised to allow Turks visa-free travel for stays lasting up to three months to the bloc’s Schengen area, of which the UK is not a member.  It comes as Turkey’s foreign minister waded into the debate head first saying Britain must stay in the bloc “under any circumstances”.

Meanwhile, Mevlut Cavusoglu said Turkey “desires Britain to stay in the EU under any circumstances. He added: “Britain’s exit would certainly have a negative impact.” Cameron has previously been a strong supporter of Ankara’s struggles to join the EU. Just two years ago, Mr Cameron himself, said: “In terms of Turkish membership of the EU, I very much support that.”

And in 2010 the Prime Minister urged France and Germany not to shut them “out of the club” in 2010. Turkey applied for membership in 1987 and began accession talks with Brussels in 2005.

For Turkey to qualify it will have to fulfil the criteria set out in the accession treaty between Turkey and the European Commission.  The accession treaty sets conditions Turkey must meet before member states vote to decided on its entry. All 28 member states must agree unanimously.

And since Turkey continues to hold the trump card over Merkel, namely the threat of once again releasing millions of refugees into central Europe where they will promptly gravitate toward Germany, jeopardising Merkel’s polls, Turkey will almost surely end up getting what it wants. Sadly for UK voters, however, the referendum will be long gone.

END GLOBAL ISSUES

Albert Edwards correctly deems the biggest risk to the global economy is the stealth devaluation of the Chines yuan.   The USA/yuan cross has been stable although the Chinese basket of currencies against the yuan has fallen 10% . This will cause further Chinese devaluation.  Unless countries try to lock step devaluation in its own currency, a failure to do so will cause massive deflation in their countries:

(courtesy zero hedge/Albert Edwards)

Forget Brexit: According To Albert Edwards, There Is A Far Bigger Risk To The Global Economy

While SocGen’s Albert Edwards has opined previously on the topic of Brexit (with an apparent interest in a “leave” outcome), overnight he once again revisits the only thing that matters to markets over the next 24 hours, and looks at the possible outcome of a second “Black Wednesday”, an event that could send the sterling plunging, from the prism of George Soros’ recent op-ed predicting doom and gloom should the British currency rapidly devalue, and concluding that he disagrees:

“thinking about this from the point of view of my Ice Age thesis, where interest rates cannot be normalised because of economic weakness and deflation pressures persisting throughout this recovery, I would have thought a 20% sterling devaluation is exactly the antidote needed in the current circumstances.

We will have more to say on Edwards’ comparison of Brexit to Black Wednesday and how the potential outcome, like back in 1992, may actually end up being a blessing in disguise for the UK economy, should Leave end up winning. Ultimate outcome for the UK aside, however – and Edwards believes that the pound will “fall with or without Brexit” – In this we will focus on what according to the SocGen strategist is a far bigger risk to the global economy – the same risk that defined risk for the entire second half of 2016: China’s devaluation, which has returned, only this time it is far more strealthy which may explain why the market has largely ignored it for now.

Here is Albert:

The UK referendum is neck and neck. Commentators think it so close that the deciding factor could be whether it rains on Thursday – with rain seen reducing the Remain vote. How mad is that? One year ago we wrote that the UK economy was a ticking time bomb. The ticking has got even louder. The UK economy is a mess and that has nothing to do with Brexit – it has everything to do with economic mismanagement. We studiously take no view on the outcome of the vote; we simply discuss the possible implications of a sharp decline in sterling in the event of Brexit. But there is an argument that global investors have overly focused on Brexit at the expense of other more important macro events. We believe China’s ongoing stealth devaluation of the renminbi is far more important for the global economy.

* * *

The UK economy is a mess ? see ?The UK is a ticking time bomb?. I think sterling will end up falling substantially whether the UK stays or leaves the EU – it is just a matter of timing.

That’s the “good news” (and we will have more shortly). Here is the bad news:

Meanwhile, our attention has been diverted. China has embarked on a stealth devaluation of the renminbi. Its new trade-weighted currency basket has fallen 10% since just before its initial August 2015 devaluation (white line in chart below) and it has continued to decline since January even as the Rmb/dollar has stabilised. The Wall Street Journal has reported that this is a deliberate shift in policy ?- link. China is now exporting its deflation, and my goodness it has a lot of deflation to export. In the Ice Age world, countries need to devalue to avoid deflation. So if sterling slumps in the aftermath of a Brexit vote there may be at least one silver lining outside the EU if the UK economy manages to avoid the quagmire of outright deflation.

And what better cover for China to continue implementing what in 2015 was seen as the “biggest risk” than the one event that has been dubbed as the “biggest risk of 2016.”

END West Texas intermediate falls below 50 dollars after the DOE disappoints.  Production drops. (courtesy zero hedge) WTI Slides Below $50 After DOE Data Disappointment Despite Production Drop

Following last night’s major inventory draws across the board (via API), which sent WTI surging back above $50, this morning’s DOE data was markedly different. Both Gasoline and Distillates saw inventory builds and Crude saw notably smaller inventory draws (DOE -917k vs API -5.22mm). US crude production fell 0.44% (having fallen for 21 of the last 22 weeks) to the lowest since Sept 2014. Notably, Genscape additionally reported EU crude storage saw a notable build to the highest inventory in 3 years (suggesting US shifting stock to Europe). WTI crude has slide back below $50 erasing API’s spike.

API

  • Crude -5.22m (-1.7m exp.)
  • Cushing -1.311m (-50k exp.)
  • Gasoline -1.47m (-300k exp.)
  • Distillates -1.699m (+300k exp.)

DOE

  • Crude -917k (-1.5m exp.)
  • Cushing -1.28m
  • Gasoline +627k
  • Distillates +151k

DOE data notably less exuberant than API…

Production fell for the 21st week of the last 22…

Crude slid back below $50, erasing API gains…

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

Euro/USA   1.1295 UP .0046 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 104.62  DOWN 0.091 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4684 UP .0023 (MUCH LESS THREAT OF BREXIT)

USA/CAN 1.2775 DOWN .0031

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 46 basis points, trading now WELL above the important 1.08 level FALLING to 1.1295; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP 26.98 POINTS OR 0.94%   / Hang Sang CLOSED UP 126.88 POINTS  OR 0.61%   AUSTRALIA IS LOWER BY 0.07%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this WEDNESDAY morning: closed DOWN 103.39 POINTS OR 0.64% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 126.88 POINTS OR 0.61% . ,Shanghai CLOSED UP 26.98 POINTS OR 0.94% / Australia BOURSE IN THE RED: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE RED/India’s Sensex IN THE GREEN

Gold very early morning trading: $1165.10

silver:$17.20

Early WEDNESDAY morning USA 10 year bond yield: 1.697% !!! DOWN 1 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.506 DOWN 1 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early WEDNESDAY morning: 93.77 DOWN 31 CENTS from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

END

And now your closing WEDNESDAY NUMBERS

 

Portuguese 10 year bond yield:  3.14% DOWN 3 in basis points from TUESDAY

JAPANESE BOND YIELD: -0.140% PAR  in   basis points from TUESDAY

SPANISH 10 YR BOND YIELD:1.50%  DOWN 1 IN basis points from TUESDAY

ITALIAN 10 YR BOND YIELD: 1.44  DOWN 1 IN basis points from TUESDAY

the Italian 10 yr bond yield is trading 6 points lower than Spain.

GERMAN 10 YR BOND YIELD: +.061% up 1 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

Euro/USA 1.1306 UP .0058 (Euro =UP 58 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 104.49 DOWN .218 (Yen UP 22 basis points )

Great Britain/USA 1.4696 UP.0035 ( Pound UP 35 basis points/(MORE BREXIT CONCERN)

USA/Canada 1.2826- UP 0.0021 (Canadian dollar DOWN 21 basis points  AS OIL FELL  (WTI AT $49.12).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 58 basis points to trade at 1.1306

The Yen ROSE to 104.49 for a GAIN of 22 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 35 basis points, trading at 1.4696 

The Canadian dollar FELL by 21 basis points to 1.2826, WITH WTI OIL AT:  $49.10

The USA/Yuan closed at 6.5752/

the 10 yr Japanese bond yield closed at -.140% PAR  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 2 IN basis points from TUESDAY at 1.685% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.497 DOWN 2 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 93.72 DOWN 35 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY

London:  CLOSED UP 34.64 OR 0.56%
German Dax :CLOSED UP 55.52 OR  0.55%
Paris Cac  CLOSED UP 12.79  OR 0.29%
Spain IBEX CLOSED UP 34.20 OR 0.40%
Italian MIB: CLOSED DOWN 107.90 OR 0.62%

The Dow was down 48.90  points or 0.27%

NASDAQ down 8.67 points or 0.20%
WTI Oil price; 49.12 at 4:30 pm;

Brent Oil: 49.87

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  64.77 (ROUBLE DOWN 86/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT FELL AND WTI FELL

TODAY THE GERMAN YIELD RISES TO +.061%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:49.13

BRENT: 49.90

USA 10 YR BOND YIELD: 1.685% 

USA DOLLAR INDEX: 93.56 DOWN 52 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4760 UP .0109  or 109 basis pts.

German 10 yr bond yield at 5 pm: +.061%

 

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Hedges Soar, Markets Snore As Traders Brace For Big Brexit Day

Some nostalgia… “some poeple are on the pitch, they think [Brexit]’s all over… it is now!!”

Although we suspect, by this time tomorrow, the sounds from trading floors around the world may be more like this…

 

Polls point to “Leave” and Bookies’ money-flows tipped towards “Leave” today…

 

Volume cratered…

 

Black swan bets soared…

 

And Short-term VIX soared to 26.5 today, highest since mid-Feb…

 

Stocks ended the day modestly lower…

 

Once again the machines tried to run the S&P to 2,100…but as soon as VIX dipped below 18, that was over…and VIX ended above 21

 

Hedges are bid…

 

Musk’d!!

 

Treasury yields ended the day around 2bps lower, helped by a strong auction…

 

The USDollar Index slid today (4th time in last 6 days)…

 

As Cable ended the day higher but jerked lower on polls and weather (after an algo meltup at the US open)

 

Despite a slide in the USDollar, commodities largely trod water with only crude the big mover…

 

Lower than expected inventory draws and brexit derisking sent crude sharply lower…

 

Charts: Bloomberg

Bonus Clip: The Countdown has begun…

Tags

Existing home sales highest since Feb 2007

(courtesy zero hedge)

Existing Home Sales Highest Since Feb 2007 As Prices Hit Record High

On the heels of FHFA reporting a disappointing 0.2% home price appreciation in April (the weakest since Jan 2015),May existing home sales rose, as expected by 1.8% MoM to 5.53mm SAAR – the highest since February 2007. All regions saw median home prices rise MoM (but Northeast -0.1% YoY) but The Midwest stood out with a 6.5% drop in sales. Median home prices jumped to a record $239,700 (up 4.7% YoY) but first time homeowners are disappearing, as NAR’s Larry Yun notes a lack of inventory is pushing prices out of reach for plenty of prospective first-time buyers.”

Home Sales at highest since Feb 2007…

FHFA reporteed a very modest rise in home prices…

But NAR reports median homeprices now at record highs…

Surpassing the peak median sales price set last June ($236,300), the median existing-home price for all housing types in May was $239,700, up 4.7 percent from May 2015 ($228,900). May’s price increase marks the 51st consecutive month of year-over-year gains.

Total housing inventory at the end of May rose 1.4 percent to 2.15 million existing homes available for sale, but is still 5.7 percent lower than a year ago (2.28 million). Unsold inventory is at a 4.7-month supply at the current sales pace, which is unchanged from April.

Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month.

“This spring’s sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they’ve accumulated in recent years and finally deciding to trade-up or downsize,” he said.

With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now.”

“Barring further deceleration in job growth that could ultimately temper demand from these repeat buyers, sales have the potential to mostly maintain their current pace through the summer.”

“Existing inventory remains subdued throughout much of the country and continues to lag even last year’s deficient amount,” adds Yun.

“While new home construction has thankfully crept higher so far this year, there’s still a glaring need for even more, to help alleviate the supply pressures that are severely limiting choices and pushing prices out of reach for plenty of prospective first-time buyers.

So to translate – new entrants are blocked by crushing unaffordability but exiting homeowners just keep flipping to higher and higher leverage.

Charts: Bloomberg

end

Well that is all for today

I will see you tomorrow night

h


June 21Yellen speaks and thus the signal to whack gold and silver/Surprisingly despite increase margins, the silver open interest skyrockets to its highest ever OI at 201,266 contracts/Brexit vote up in the air with conflicting polls/Japan’s exports...

Tue, 06/21/2016 - 19:19

Good evening Ladies and Gentlemen:

Gold:  $1,270.50 DOWN $19.50    (comex closing time)

Silver 17.31  down 19 cents

In the access market 5:15 pm

Gold: 1268.50

Silver: 1731

.

The June gold contract is an active contract. Last  night we had a good sized 64 notices filed last night, for 6400 oz to be served upon today.  The total number of notices filed in the first 14 days is enormous at 15,220 for 1,522,000 oz.  (47.34 tonnes)

ii) in silver we had 0 notices filed for nil oz..  Total number of notices served  in the 14 days: 489 for 2,445,000 oz

Today, both gold and silver could not withstand another vicious attack. Generally when Yellen speaks they always whack.  Yesterday,the bankers called on their broker friends to raise margin levels on gold and silver contracts and their excuse was the volatile conditions because of the British vote on whether to leave the EU or not. The gold/silver equity shares held up pretty good.

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 274.57 tonnes for a loss of 28 tonnes over that period

In silver, the total open interest ROSE by 4924 contracts UP to 210,266 DESPITE THE FACT THAT THE PRICE OF SILVER WAS up by only 10 cents with respect to YESTERDAY’S trading.We have now a new all time silver oi record and a low price to boot. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.051 BILLION TO BE EXACT or 150% of annual global silver production (ex Russia &ex China)

In silver we had 0 notices served upon for NIL oz.

In gold, the total comex gold OI fell by a tiny 774 contracts down to 581,190 even though the price of gold was DOWN $2.50 with YESTERDAY’S trading (at comex closing) 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

Fascinating!! on a huge whack job the GLD has a huge deposit!

We had one deposit:

this afternoon: 3.56 tonnes were added into the GLD

Total gold inventory: 912.33 tonnes

 SLV

THIS MAKES NO SENSE!!

We had A HUGE WITHDRAWAL FROM  inventory  to the tune of 1.426 million oz; silver inventory tonight  rests  at 333.069 million oz.  If they did have some physical silver that inventory was used to ship to China which has been massively importing silver..

Both the GLD and SLV are massive frauds as they have no metal behind them!

.

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

1. Today, we had the open interest in silver ROSE by 4,924 contracts up to 210,266 despite the fact that the price of silver was DOWN by only 10 cents with YESTERDAY’S trading. The gold open interest FELL by a TINY 774 contracts DOWN to 581,190 despite the fact that the price of gold was DOWN $2.60  ON YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  MONDAY night/ TUESDAY morning: Shanghai closed DOWN 10.25 POINTS OR 0.35% / /Hang Sang closed UP 158.74 OR 0.77%. The Nikkei closed UP 203.81 POINTS OR 1.28% Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed DOWN at 6.5832 /Oil ROSE to 48.85 dollars per barrel for WTI and 50.03 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5900 yuan to the dollar vs 6.5832 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS A BIT 

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN

Japan’s exports fell again at 11.3% year over year. Exports to the USA fell 1.07% and Exports to its largest trading partner China fell 14.9%.  The higher yen has certainly killed off Japan’s exports.  Now the IMF strangely tells Japan that Abenomics is a miserable failure and get this : it recommends forcing companies to raise wages ..or else>>>

( zero hedge)

b) REPORT ON CHINA

The Chinese real estate bubble especially in tier one cities has gone exponetial as land prices soar over 50% in one year.  What a bubble!!..

( zero hedge

4. EUROPEAN AFFAIRS

i) All the big guns are out last night, George Soros and Rothschild warning of a BREXIT. They both have a lot to lose if Britain opts out:

( zero hedge)

ii)SocGen talks about Britain’s real problems whether BREXIT is a reality or not>>

( Soc Generale/zero hedge)

iii)And now correctly, we see this UK billionary, Peter Hargreaves believes a BREXIT will be good for the UK

( zero hedge/Peter Hargreaves)

iv)The Cardinals of Karlsruhe fold and allow the ECB’s OMT program of unlimited bond buying:

( zero hedge)

v)At 8:30 est  (3:30 pm London Time) a new poll suggests a rise in the leave vote:

( zero hedge) 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS none today 6.GLOBAL ISSUES 7.OIL ISSUES

i)What a joke:  Militants agree to a “ceasefire” with Nigeria and that causes oil to fall to the 48 dollar handle:

(courtesy zero hedge)

\

ii)Then oil spikes up on a huge inventory drawdown:

( zero hedge)

8.EMERGING MARKETS

I will bet you have never seen this happen to a major country:  Brazilian Telecom company OI files for bankruptcy protection in the country;s largest bankruptcy in history: (19.2 billion in debt)

Is there a mercy rule somewhere to bail out Brazil?

(courtesy zero hedge)

9. PHYSICAL STORIES

i)Hugo offers a view that Russia should adopt a silver rouble 1/2 oz coin trading parallel to the paper rouble and it’s price determined daily.  He has also commented that Mexico should adopt this same policy:

( Hugo Salinas Price.)

 

ii)A must read..James Turk talks about the worsening positions of European banks especially Italy with 18% of all loans issued being non performing.  Many of the European big banks have non performing loans greater than their equity and thus they are insolvent.

( James Turk/Kingworldnews)

 

iii)John Embry talks about the gold price suppression getting more desperate per day.

a must read..

( John Embry/.Kingworldnews)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)We have been reporting on that huge gas leak in Southern California.  Reuters comments that the entire Southern half of California will be subject to blackouts lasting 14 days without power.

( Mac Slavo/SHFPlan )

ii)My goodness, Janet must be reading zero hedge and David Stockman:  USA stocks are vulnerable as forward valuations are well above normal:

( zero hedge)

iii)A major trucking company, Werner warns about the awful state of trucking and logistics inside the USA/  the stock plummets today:

( zero hedge)

iv)Dave Kranzler does a good job reporting on the tanking economy:

(courtesy Dave Kranzler/IRD) Let us head over to the comex:

The total gold comex open interest FELL to an OI level of 581,190 for a TINY LOSS of 774 contracts despite the fact that THE PRICE OF GOLD WAS DOWN $2.50 with respect to YESTERDAY’S TRADING. .WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR THAT IS JUNE, A VERY ACTIVE MONTH. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH. IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 606 for a loss of 60   contracts. We had 15 notices filed YESTERDAY, so we lost 45 contracts or 4500 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 72 contracts up to 4,857.This no doubt will be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI ROSE by 1,018 contracts UP to 424,865. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was GOOD at 235,521. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was GOOD at 211,745 contracts. The comex is not in backwardation.

Today we had 64 notices filed for 6400 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by 4,924 contracts from 205,342 UP to 210,266, A NEW ALL TIME RECORD FOR OPEN INTEREST AND THIS WAS DONE WITH A LOW PRICE FOR SILVER The OI rose appreciably despite the fact that the price of silver was UP BY only  10 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI FALL by 77 contracts DOWN TO  56. We had 80 notices filed ON FRIDAY , so we  GAINED 3 contracts or an additional 15,000 oz will  stand for metal during non active June contract month. The next big delivery month is July and here the OI fell BY 6,976 contracts down to 83,808. We have a little more than 1  week to go before first day notice on June 30.. The volume on the comex today (just comex) came in at105,834 which IS HUGE. The confirmed volume YESTERDAY (comex + globex) was HUGE at 83,941. Silver is not in backwardation . London is in backwardation for several months.   We had 0 notices filed for NIL oz.  

JUNE contract month:

INITIAL standings for JUNE

June 21. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  NIL Deposits to the Dealer Inventory in oz 3086.400

BRINKS Deposits to the Customer Inventory, in oz   3599.88 OZ

BRINKS

  No of oz served (contracts) today 64 contracts
(6400 oz) No of oz to be served (notices) 542 contracts

54,200 oz Total monthly oz gold served (contracts) so far this month 15,220 contracts (1,522,000 oz)

(47.34 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  150,442.8 OZ

Today we had 1 dealer DEPOSIT

i) Into Brinks:  3086.400 oz

 

total dealer deposit:  3086.400  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 1 customer deposit:

i) Into Brinks:  3599.88 oz

Total customer deposits; 3599.88   OZ

Today we had 0 customer withdrawals:

 

total customer withdrawals:  nil oz

Today we had 0 adjustments:

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 64 contracts of which 29 notices was stopped (received) by JPMorgan dealer and 34 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,220) x 100 oz  or 1,522,000 oz , to which we  add the difference between the open interest for the front month of JUNE (602 CONTRACTS) minus the number of notices served upon today (64) x 100 oz   x 100 oz per contract equals 1,576,200 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.    Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,220) x 100 oz  or ounces + {OI for the front month (602) minus the number of  notices served upon today (64) x 100 oz which equals 1,576,200 oz standing in this   active delivery month of JUNE (49.026 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.026 TONNES) . WE LOST 45 contracts or an additional 4500 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 49.026 tonnes of gold standing for JUNE and 53.151 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.026 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008  = 65.668 tonnes still standing against 53.151 tonnes available.  Total dealer inventor 1,708,814.092 tonnes or 53.151 tonnes Total gold inventory (dealer and customer) =8,834340.101 or 274.78 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.78 tonnes for a loss of 28 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!      end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 21.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  2,216,417.996 oz

BRINKS, CNT

Delaware,Scotia Deposits to the Dealer Inventory nil

  Deposits to the Customer Inventory  608,207.700  oz

JPM, No of oz served today (contracts) 0 CONTRACTS 

(NIL OZ) No of oz to be served (notices) 56 contracts

280,000 oz Total monthly oz silver served (contracts) 489 contracts (2,445,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  22,573,979.6 oz

today we had 0 deposit into the dealer account

 

total dealer deposit:nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 1 customer deposit:

i) Into JPMorgan:  608,207,700 oz

 

Total customer deposits: 608,207.700  oz.

We had 4 customer withdrawals

i) Out of Brinks:  608,203.400 oz

ii) Out of CNT:  1,292,847.066 oz

iii) Out of Delaware: 5002.65 oz

iv) Out of Scotia; 310,424.880 oz

:

total customer withdrawals:  2,216,417.996  oz

   

 

 we had 0 adjustment

Looks to me like we have our good old fashioned run on silver at the comex/

today 2.216 million oz leaves the silver comex.

The total number of notices filed today for the JUNE contract month is represented by 0 contracts for NIL oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (489) x 5,000 oz  = 2,445,000 oz to which we add the difference between the open interest for the front month of JUNE (56) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  489 (notices served so far)x 5000 oz +{56 OI for front month of JUNE ) -number of notices served upon today (0)x 5000 oz  equals  2,725,000 of silver standing for the JUNE contract month. We gained 3 silver contracts or an additional 15,000 silver ounces will stand in this non active month of June.   Total dealer silver:  23.941 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   149,452 million oz The total open interest on silver is NOW surpassed  its all time high with the record of 207,394 being set May 18.2016 with today’s reading  at 210,266. The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. end And now the Gold inventory at the GLD June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

June 21.:  inventory rests tonight at 912.33 tonnes

end

Now the SLV Inventory June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495 June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 21.2016: Inventory 333.069 million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.0 percent to NAV usa funds and Negative 2.5% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 61.0% Percentage of fund in silver:37.6% cash .+1.4%( June 21/2016). / 2. Sprott silver fund (PSLV): Premium FALLS  to -0.64%!!!! NAV (June 21/2016)  3. Sprott gold fund (PHYS): premium to NAV  FALLS TO +0.70% to NAV  ( June 21/2016) Note: Sprott silver trust back  into NEGATIVE territory at -64% /Sprott physical gold trust is back into positive territory at +0.70%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,TUESDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) Gold Slips Despite UK Gold Demand Surging – Investors “Seek Stability”

By Mark O’ByrneJune 21, 20160 Comments

Gold fell again today despite very robust physical demand in western markets and especially the UK. Gold fell to a ten-day low as the recent global share rally showed signs of exhaustion.

Expectations that Britain could vote to leave the European Union in Thursday’s referendum have receded somewhat but remain and this is leading to very significant UK gold demand.

Over the last 5 days, we have had record demand from both Irish and UK retail and high net worth clients acquiring bullion in advance of the important poll. Other bullion dealers in the UK and indeed mints are reporting similar surging demand.

The Royal Mint has seen demand for gold “rocket” as investors seek sanctuary in safe haven gold due to increased volatility in stock and fx markets and concerns about the outlook for the UK economy and sterling (see News).

Two opinion polls yesterday showed the “Remain” camp had recovered some ground in the referendum debate though a third poll found those wanting to leave were ahead by a whisker.

As ever, speculative money in the futures market appears to be dictating gold prices in the short term. We expect the very robust physical demand will lead to a sharp bounce in gold prices in the medium term. We are hearing of increasing illiquidity in the inter-bank gold market and will look at this in more detail tomorrow.

Gold and Silver News
UK gold bullion demand surges in run-up to EU referendum (Guardian)
Demand for gold rockets in UK as investors seek stability (Belfast Telegraph)
Gold slips ahead of Britain’s vote on EU membership (Reuters via CNBC)
Gold extends downturn, Yellen to address Congress (Bullion Desk)
Gold edges up on softer dollar; Brexit concerns ease further (Reuters)

It’s Francs, Gold If U.K. Goes and Euros, Sterling If It Stays (Bloomberg)
Investors Flee to Gold as Brexit Looms (Video) (Bloomberg)
UK Referendum: What you need to know about the EU (Professor Werner)
What Brexit Is All About: Taxation (and Regulation) Without Representation (Gold Seek)
Worst Yet to Come – Generational Chaos Ahead – Mauldin Economics
Read More Here

 

Gold Prices (LBMA AM)
21 June: USD 1,280.80, EUR 1,129.67 and GBP 866.72 per ounce
20 June: USD 1,283.25, EUR 1,132.08 and GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce
14 June: USD 1,279.40, EUR 1,140.84 and GBP 904.79 per ounce

Silver Prices (LBMA)
21 June: USD 17.36, EUR 15.34 and GBP 11.78 per ounce
20 June: USD 17.34, EUR 15.30 and GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce

Recent Market Updates
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

Mark O’Byrne Executive Director Published in Daily Market Update end

Hugo offers a view that Russia should adopt a silver rouble 1/2 oz coin trading parallel to the paper rouble and it’s price determined daily.  He has also commented that Mexico should adopt this same policy:

(Courtesy Hugo Salinas Price.)

Hugo Salinas Price: A silver ruble coin for Russia

Submitted by cpowell on Mon, 2016-06-20 17:24. Section: 

1:23p ET Monday, June 20, 2016

Dear Friend of GATA and Gold:

Russia can defend its sovereignty, enrich itself, and impress the world by restoring silver to circulation as money, Mexican Civic Association for Silver President Hugo Salinas Price told a conference in St. Petersburg last week. His presentation is headlined “A Silver Ruble Coin for Russia” and it’s posted at the association’s Internet site here:

http://plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=291

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

 

end

 

A must read..James Turk talks about the worsening positions of European banks especially Italy with 18% of all loans issued being non performing.  Many of the European big banks have non performing loans greater than their equity and thus they are insolvent.

(courtesy James Turk/Kingworldnews)

Banks weakening throughout Europe and even in U.S., Turk tells KWN

Submitted by cpowell on Mon, 2016-06-20 17:39. Section: 

1:38p ET Monday, June 20, 2016

Dear Friend of GATA and Gold:

The nonperforming loans of Italian banks are now far greater than the banks’ equity, GoldMoney founder and GATA consultant James Turk tells King World News today, adding that bank solvency is declining throughout Europe and even the United States. Since so much more debt has been created in recent years, Turk says, the next financial crisis is likely to be far worse than previous ones. An excerpt from Turk’s interview is posted at KWN here:

http://kingworldnews.com/the-world-is-headed-for-another-terrifying-coll…

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

 

end

 

John Embry talks about the gold price suppression getting more desperate per day.

a must read..

(courtesy John Embry/.Kingworldnews)

Gold price suppression gets more desperate, Embry tells KWN

Submitted by cpowell on Tue, 2016-06-21 00:03. Section: 

8p ET Monday, June 20, 2016

Dear Friend of GATA and Gold:

Sprott Asset Management’s John Embry, interviewed by King World News, remarks that gold price suppression is getting ever more desperate, as by doubling margin requires for gold futures contract trading. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/serious-problems-emerging-as-desperate-short-bu…

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

 

end

 

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

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.5832 ( DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.59000) / Shanghai bourse  DOWN 10.35 OR 0.35%   / HANG SANG CLOSED UP 158.74 OR 0.77%

2 Nikkei closed UP 203.81 OR 1.28% /USA: YEN RISES  TO 104.62

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.57/Euro UP to 1.1323

3b Japan 10 year bond yield: RISES  TO -.1420%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.62

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  48.85  and Brent: 50.03

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to +069%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 8.92%/: 

3j Greek 10 year bond yield FALL to  : 7.930%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1272.20/silver $17.26(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 72 in  roubles/dollar) 64.02-

3m oil into the 48 dollar handle for WTI and 50 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.62 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9588 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0858 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU NEW POLLS INDICATES A SWING TO THE BREMAIN.

3r the 9 Year German bund now NEGATIVE territory with the 10 year RISES to  + .069%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.681% early this morning. Thirty year rate  at 2.488% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Stocks, Sterling Rise As “Brexit” Fears Forgotten; Dollar Drops Ahead Of Yellen Speech  

Tuesday’s overnight price action has been a continuation of yesterday’s Brexit relief rally, as investors focused on the two latest polls favorable to Remain in Thursday’s referendum (while ignoring the YouGov poll which gave Leave a small lead), and hoping the doom and gloom by George Soros will convince the undecideds to vote against Leaving. As a result, global stocks continued their advance while pound extending the biggest rally since 2008, rising to the highest level since the announcement of the EU referendum, and just 20 pips shy of what Citi had forecast would be the “extreme” print should a Remain outcome be confirmed, suggesting a Remain vote has been largely priced in.

The latest UK referendum polls are summarized below:

  • ORB/Daily Telegraph poll showed 53% would vote to Remain and 46% to Leave.
  • YouGov/Times poll showed 42% to Remain and 44% to Leave.
  • NatCen Brexit poll showed 53% would vote to Remain and 47% would vote to Leave.
  • The latest Survation poll is expected at 1330BST/0730BST.

However, today it’s not just about Brexit, polling and bookie odds: at 10am Eastern, Janet Yellen will speaking before the Senate Banking Committee for her semiannual monetary policy testimony. Tomorrow, Yellen will return to the Hill on Wednesday for round two before the House Financial Services Committee. The timing of these so-called Humphrey-Hawkins hearings is of note. They come just days after the Fed’s latest policy meeting and before a U.K. referendum on whether to the leave the European Union. They also are the last scheduled chance lawmakers, many of whom face re-election, will have to publicly question the Fed chief before voters head to the polls in November. That could make it an especially uncomfortable visit to Capitol Hill for Ms. Yellen, who likely will face grilling on a range of issues, such as the economic effects of increasingly stringent bank regulation, the Fed’s cybersecurity controls and its focus on global developments in setting U.S. monetary policy.

Then again, even Yellen will be relegated to second place behind headlines about the upcoming UK referendum, which however the market is increasingly seeing as no longer a risk factor: the MSCI All-Country World Index rose to the highest level in more than a week while gold fell with the yen as haven demand eased. A gauge of the dollar declined for a fifth day in the longest run of losses since the start of April.

Some remain cautiously optimistic: “Sterling is supported by the recent rise in support for the ‘Remain’ camp, but if you look at an average of recent polls they still suggest it is neck and neck,” said Steven Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. in London. “It’s hard for traders or investors to go into Thursday with any strong conviction — or large position.”

Others, such as Citi equity strategist Jonathan Stubbs, have already largely assumed a positive outcome: “the U.K. referendum brings significant uncertainty and has contributed alongside macro uncertainty more generally to push many investors to ‘sit on their hands’. Citi’s house view retains a 60-70% probability that a ‘remain’ outcome will prevail. We see this as supporting a return of risk appetite across the U.K. and the rest of Europe and helping to drive share prices higher during 2H 2016.”

Yet others are even more euphoric: “People are starting to take risks again,” said Karl Goody, a private wealth manager at Shaw and Partners Ltd. in Sydney, which oversees about A$10 billion ($7.5 billion). “We saw a bit of an overreaction and you often need that to get people back into the market. It had got a bit overdone.”

While global market remain very illiquid, and prone to sudden gaps and dislocations, as of this morning the MSCI AC World Index rose 0.2% after climbing 2.3% in the previous two days. The Stoxx Europe 600 Index added 0.1% , with banks rising for a third day, while miners followed commodity prices lower, while the MSCI world index advanced 0.2 percent. Futures on the S&P 500 climbed 0.5%, indicating U.S. equities will extend gains for a second day, after the index rose the most in almost four weeks on Monday.

Market Snapshot

  • S&P 500 futures up 0.5% to 2085
  • Stoxx 600 up 0.1% to 338
  • FTSE 100 down 0.2% to 6192
  • DAX up less than 0.1% to 9969
  • S&P GSCI Index down 0.7% to 380.2
  • MSCI Asia Pacific up 0.9% to 130
  • Nikkei 225 up 1.3% to 16169
  • Hang Seng up 0.8% to 20668
  • Shanghai Composite down 0.4% to 2879
  • S&P/ASX 200 up 0.3% to 5274
  • US 10-yr yield down 2bps to 1.67%
  • German 10Yr yield up 1bp to 0.06%
  • Italian 10Yr yield up 2bps to 1.45%
  • Spanish 10Yr yield up 2bps to 1.5%
  • Dollar Index down 0.14% to 93.48
  • WTI Crude futures down 0.9% to $48.91
  • Brent Futures down 1% to $50.12
  • Gold spot down 0.6% to $1,282
  • Silver spot down 0.4% to $17.44

Top Global Headlines

  • Brexit Vote in Balance as Polls Differ Over Which Side Leads: Soros warns of 20% slump in Pound if U.K. votes to leave EU
  • Treasuries Halt Decline Before Brexit Vote as Polls Show Split: Benchmark Treasuries halt a three-day decline
  • Draghi Gets Reluctant Backing From German Court for OMT Plan: OMT program underpins Draghi vow to do ‘whatever it takes’
  • Oi Files for Brazilian Record $19 Billion Bankruptcy Protection: Major creditors include BNDES, Caixa Economica, Itau
  • Fund Manager Franklin Templeton Bets on Higher Oil Prices: Current price of $50 a barrel isn’t enough to boost supply
  • Brookfield, State Bank Said to Mull India Stressed Asset Venture: Canadian asset manager discusses $1 billion investment
  • Post-Orlando Limits on Gun Purchases Blocked in U.S. Senate: Four Republicans are unveiling a compromise proposal Tuesday
  • BofA Faces High Stress as Fed Test Verdict Hits With Brexit Vote: BofA seen raising payouts most if Fed approves
  • Amplats Sees Profit Falling on Platinum Drop, Tax Adjustment: Platinum prices have almost halved since high reached in 2011
  • Iran Air Signs Agreement to Buy Boeing 737, 777 Airplanes: Contract is Boeing’s first since sanctions against Iran lifted
  • Apple’s Cook Plans Ryan Fundraiser Amid Reported Doubts on Trump: Co. said to withhold sponsorship of party convention
  • Netflix Said to Near CW Deal With Shorter Wait Times: L.A. Times: New deal would have episodes available within 2 weeks
  • KKR Raises $739 Million for First European Real Estate Fund: Fund plans to focus on investments in western Europe
  • BHP CEO Says Iron to Take Longer to Balance Than Oil, Copper: Prices now ‘more realistic’ on basis of fundamentals, CEO says

Asian equity markets picked up on the momentum from the positive Wall Street close, following continued gains in energy and after the latest Brexit polls provided reassurance to the market. Nikkei 225 (+1.3%) erased its earlier losses to trade higher as a rebound in USD/JPY boosted exporter sentiment, while the ASX 200 (+0.2%) is led higher by defensive stocks. Elsewhere, Chinese markets conformed to the positive tone with the Shanghai Comp (+0.2%) higher after the PBoC continued to inject a respectable amount of funds into the inter-bank market. Finally, 10yr JGBs traded lower as the risk-on sentiment in Japan dampened demand for safe-haven assets, while today’s enhanced liquidity auction for long-end JGBs saw a lower than prior b/c. BoJ Minutes from the April 27th-28th meeting stated Japan’s economy is continuing to recover gradually and that underlying trend in inflation is showing steady improvement. In addition, several BoJ members were more cautious for the outlook on inflation and stated that NIRP impairs financial market function and JGB market stability, while 1 member stated the impact of QQE is diminishing and that the side-effects are greater.

Asia Top News

  • PBOC Discusses Opening Offshore Yuan Trading to Onshore Banks: Chinese banks have need for better integration, PBOC says
  • RBA Sees Positive Economic Data Outweighing CPI for Now: Higher Aussie dollar could complicate economy’s adjustment
  • LVMH-Backed Asia Private Equity Fund Sued by Fired Executive: Mehra seeks at least $37.5m in claims for dismissal
  • Tesla Said to Target Shanghai as Front-Runner for Production: Tesla, Jinqiao may invest $9b in Shanghai project
  • Billionaire Li Ka-Shing Warns Against Brexit as Referendum Looms: As one of the U.K.’s largest investors, Li has much at stake

This morning has seen European stocks rather steady after their largest one-day rally since August, inspired by increasing expectations that the UK will remain in the EU. As such, equities have traded in choppy fashion with the upside in defensive stocks (Healthcare) offset the softness in energy stocks, with news flow fairly light thus far ahead of Fed Chair Yellen’s Testimony. In credit markets, the German 10-yr benchmark has also seen price action relatively muted, with spreads widening and the yield curve bear steepening yet again. Also, of note the top German court have rejected the challenge against the ECB’s OMT which saw little reaction given the fact that the decision had been widely expected.

European Top News

  • German Investor Sentiment Unexpectedly Rises Ahead of U.K. Vote: ZEW expectations index climbs to 19.2 in June from 6.4
  • Axa Targets $2.4b Cost Cuts by 2020, Weighs Acquisitions: Underlying EPS expected to rise 3%-7% annually over the period
  • Kion Buys Dematic for $2.1 Billion to Move Into Warehouse Robots: Co. says acquisition to bolster position in automation
  • Nordea Bank Rejects Speculation It Lacks Billions in Capital: Swedish regulator says Nordea meets capital requirements
  • BMW Seeks Partners in Race to Build Self-Driving Car’s Brain: BMW expects talks on more HERE partners to finish by end-2016
  • Spain’s Grand Compromise Emerging With Just One Sticking Point: Socialists, Ciudadanos may be ready to back PP-led govt

In FX, the star attraction continues to be the pound, which strengthened another 0.5% to $1.477, having surged 3.5% in the previous two days. Billionaire investor George Soros said sterling may slump more than 20 percent if British voters choose to leave the EU, a devaluation that would be bigger and more disruptive than when he profited by betting against the currency in 1992. “There’s quite a lot of volatility in the pound now with investors repositioning after the massive rally,” said Angus Nicholson, a market analyst at IG Ltd in Melbourne. “There is a lot of uncertainty with the Brexit vote and Remain is not a given yet.” The Bloomberg Dollar Spot Index declined 0.2 percent, falling to its lowest in more than a month. The gauge has weakened every day since the Fed left interest rates unchanged last week and Yellen said Brexit was a factor in the decision. The euro strengthened for a third day versus the greenback, its longest winning streak in seven weeks. European Central Bank President Mario Draghi will be speaking Tuesday in Brussels. The yen weakened 0.5%, after surging 3 percent over the last seven trading sessions, as a technical indicator — the relative strength index — reached a level that indicated a reversal was likely. Finance Minister Taro Aso signaled that Japan’s government won’t intervene to stem the yen’s strength without due consideration

In commodities, gold declined 0.7%, extending Monday’s retreat from its highest close since January 2015. West Texas Intermediate crude dropped as much as 1 percent to $48.87 a barrel in New York, after rallying 6.8 percent in the last two sessions. U.S. inventories probably fell by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.Copper slid from a two-week high in London and nickel dropped 1 percent, after ending the last session at a six-week high. U.S. natural gas futures fell as much as 1.4 percent after settling Monday at a nine-month amid forecasts for unusually hot weather across the country through next week. The deadly heat hitting the Southwest states is set to ease from Tuesday.

There’s again no data due out in the US however that should give the market a chance to focus on Fed Chair Yellen’s testimony to the Senate at 10am ET. It’s more than likely that the tone of the prepared remarks are a bit of a rehash of those comments post the FOMC last week. Also of potential interest today will be comments from the ECB’s Draghi who is due to speak at the European Parliament today.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • GBP/USD remains bid to reach its highest level since before the announcement of the EU referendum date as polls continue to lean to the remain camp.
  • Equities have been somewhat tepid this morning following yesterday’s largest advance since August.
  • Highlights include Fed Chair Yellen’s Semi Annual Testimony as well as comments from Fed’s Powell and ECB’s Draghi.
  • Treasuries little changed in overnight trading, global equities mixed as Yellen’s semi-annual testimony begins today before the Senate Banking Committee at 10am ET; Treasury auctions continue with sale of $34b 5Y notes, WI 1.20%; last sold at 1.395% in May, first 5Y auction since Feb. to stop through.
  • Britain’s referendum on EU membership remained too close to call two days before the vote, with separate polls showing leads for both sides and George Soros warning of a slump in the pound should voters back a so-called Brexit
  • German judges reluctantly rejected challenges against one of the European Central Bank’s most powerful tools just two days before a potential Brexit vote could unleash economic turmoil across the euro area
  • The ECB is about to find out how attractive its offer to pay lenders to lend really is. Starting tomorrow, euro-area banks can bid for a four-year loan from the ECB at an interest rate that begins at zero and could ultimately be negative
  • The Bank of England allotted less to banks in the second of its extra liquidity operations being held to assure sufficient funding around Britain’s referendum on EU membership
  • There have been no substantial corporate sterling deals since May and issuance in euros has slowed to a trickle as markets are roiled by uncertainty over whether the U.K. will vote on Thursday to leave or remain in the European Union
  • German investor confidence unexpectedly improved in June after polls on Britain’s future in the European Union showed the ‘Remain’ camp gaining ground

DB’s Jim Reid concludes the overnight wrap

It felt like the longest day watching England last night but as the match ended and we saw the last flickers of twilight, 3 new Brexit opinion polls were released after a Monday surge in risk that included the largest single day gain for Sterling (+2.37%) since December 2008. The first from the National Centre for Social Research polled at 53/47% in favour of ‘remain’. The second from ORB/Telegraph (phone) showed a 53/46% lead in favour of ‘remain’ for decided voters and 49/47% including undecided. The previous ORB/Telegraph poll covering June 8th-12th was split 49/48% in favour of ‘leave’ when accounting for those certain to vote. Finally YouGov bucked the trend to see a 44/42% lead for ‘leave’ with a poll out late last night. That included the don’t knows although the trend was similar when you exclude these at 51/49% in favour of ‘leave’. That’s a swing from the last YouGov/Times survey on June 16th-17th when the split was 44/43% in favour of ‘remain’ including don’t knows and 51/49% in favour of ‘remain’ excluding don’t know’s.

It’s worth noting that the fieldwork for the NatCen poll covered a wide period of between May 16th and June 12th with 65% of the interviews coming between May 16th and 26th and interestingly it was said to be an ‘experimental phone/online survey’. However considering the ebbs and flows in polls we’ve seen over the last month or so this poll looks a little less reliable as a gauge of current expectations given the timeframe. Meanwhile, fieldwork for the YouGov poll covered June 17th-19th and while the dates for the Telegraph Poll weren’t provided, much of the article pointed towards last Thursday’s tragedy as being a swing factor so we assume at least the majority of the survey period came after this date and so it’s probably fair to rule out any survey date biases with these two latest polls.

Interestingly the Telegraph poll also ran a survey on expected turnout numbers. It revealed that turnout among ‘remain’ voters has increased 9 points over the last week to 69% now, while turnout for ‘leave’ voters has fallen 4 points to 64% with the article going on to suggest that a complacency factor could be in play among the ‘leave’ camp.

The last 24 hours has also seen the Telegraph join the support for the ‘leave’ camp and so joining the Sunday Times in the process. In the mean time some comments from investor George Soros are also getting some airtime. In an op-ed in today’s Guardian newspaper, Soros said that a reasonable assumption under a ‘leave’ outcome would be for a drop in the pound by ‘at least 15% and possibly more than 20% to below $1.15’.

Following that huge rally for the pound yesterday to just shy of $1.470, it weakened a touch following that last YouGov poll and is currently down about -0.27% in trading this morning as we go to print. Sentiment in Asia generally is relatively positive. The Nikkei (+0.51%), Hang Seng (+0.42%), Shanghai Comp (+0.27%) and ASX (+0.10%) are all higher, although the Kospi (-0.36%) is struggling a little. EM currencies are generally posting modest gains too, while US equity index futures are showing small gains at present of less than half a percent.

The moves this morning come after risk assets surged yesterday having got the green light from the off as markets reacted to the latest sharp re-pricing in referendum odds. The implied probability based on political bookmaker odds of a ‘remain’ outcome closed at 79.8% (and touched 80.6% intraday) after starting the day around 74.0%. We’re sitting at 79.7% as we type now. European equity markets surged out of the gates and consolidated mid-morning without ever really looking back. Led by banks and Lloyds (+7.61%) and Barclays (+6.70%) in particular, the Stoxx 600 closed +3.65% for the largest one-day gain since August 25th last year. The FTSE 100 closed up +3.04% – the most since February – and there were big moves also for the DAX (+3.43%), CAC (+3.50%), IBEX (+3.41%) and FTSE MIB (+2.54%). Credit indices were in similar full blown rally mode too with the iTraxx Main and Crossover indices finishing 7bps and 28bps tighter respectively. Rates markets also reflected the hugely positive tone. Peripherals rallied with 10y yields in Italy, Spain and Portugal 8bps, 8bps and 17bps tighter respectively. Greek 10y yields were even 34bps tighter. On the flip side 10y Bund yields had a rare move higher, closing just over 3bps higher on the day at 0.050%.

As the US session kicked in it looked initially like risk assets across the pond might be in for similar magnitude gains although the early big gains were trimmed back as the session wore on. The S&P 500 still closed +0.58% after touching the 2100 level intraday early doors which was perhaps a signal for some profit taking. CDX IG finished just over 2.5bps tighter and the US Dollar eased with the Dollar index (-0.63%) closing lower for a fourth consecutive session. 10y Treasury yields also closed 8.1bps higher yesterday at 1.689% and the highest in ten days. Unsurprisingly commodities ex Gold rallied with the greatly improved sentiment. Copper closed up over 2%, while Brent climbed 3% and back above $50/bbl for the first time in a week. Gold pared back -0.67%.

So while we are all understandably fixated by Brexit, yesterday we mentioned the 5SM successes in Sunday’s local Italian elections. Further to this, DB’s Marco Stringa has published a note delving deeper. He suggests that the anti-establishment 5SM’s success was mainly at the expense of PM Renzi’s PD. Indeed, part of the centre-right seems to be willing to support the 5SM to antagonise Renzi. This increases the probability of a rejection of the crucial Senate reform in the October referendum. Marco now thinks that it is a 50-50 call. If the referendum is rejected, he would expect the fall of Renzi’s government. Forming a stable government majority either before or after a new election could become extremely challenging even by Italian standards. Marco thinks the 5SM has a real chance to beat the PD in a second round in the general election (2018). Much can change before then but the political momentum is not currently with Renzi. As he concludes, Italy’s political situation has the potential to pose a greater long-term challenge to the euro area’s stability than the election in Spain this weekend or even Brexit.

While we’re in Europe and on another non-Brexit related theme, yesterday saw the ECB release their official CSPP holdings figures following the first full week of purchases to last Friday. Current holdings amount to €2.25bn of corporate purchases since buying first started on June 8th. Bloomberg is reporting that purchases last week amounted to €1.9bn which would imply a slightly better than expected run rate on our roughly >€5bn monthly expectation for now. As we’ve highlighted in previous reports though it could be that we see certain months’ purchases coming in well above others depending on liquidity, upcoming holiday months and so forth. In any case it appears to be a strong early statement of intent.

Meanwhile there was also some commentary out of the Fed to mention yesterday. Minneapolis Fed President Kashkari said that the effect of a potential ‘Brexit’ is likely to have only ‘moderate direct effects on the US economy in the near term’. He confirmed that all policy options would be on that table in response should a ‘leave’ outcome be the case.

Before we move onto the day ahead, the latest The House View titled “Brexit: Decision time” came out overnight. The June 23rd UK referendum has been the dominant theme for markets, with shifts in opinion polls and betting odds leading to sharp swings in asset prices. The team note that the outcome of the referendum remains too close to call. But regardless of the result, political uncertainty is unlikely to subside for some time. This comes against a global growth backdrop that remains sluggish but overall little changed since the start of the year. Markets will take their near-term cues from the UK referendum: A material shock would trigger a forceful central bank response; absent a shock, attention should shift back to fundamentals.

ASIAN AFFAIRS

i)Late  MONDAY night/ TUESDAY morning: Shanghai closed DOWN 10.25 POINTS OR 0.35% / /Hang Sang closed UP 158.74 OR 0.77%. The Nikkei closed UP 203.81 POINTS OR 1.28% Australia’s all ordinaires  CLOSED UP 0.33% Chinese yuan (ONSHORE) closed DOWN at 6.5832 /Oil ROSE to 48.85 dollars per barrel for WTI and 50.03 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5900 yuan to the dollar vs 6.5832 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS A BIT 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES

Japan’s exports fell again at 11.3% year over year. Exports to the USA fell 1.07% and Exports to its largest trading partner China fell 14.9%.  The higher yen has certainly killed off Japan’s exports.  Now the IMF strangely tells Japan that Abenomics is a miserable failure and get this : it recommends forcing companies to raise wages ..or else>>>

(courtesy zero hedge)

The IMF Tells Japan: Abenomics Is A Miserable Failure, Recommends “Forcing Companies To Raise Wages.. Or Else!”  

For those confused as to whether or not Abenomics was working, all one has to do is glance at the recent export data released by the Ministry of Finance for confirmation that it’s been a complete disaster.

Japan’s exports fell 11.3% in May on a y/y basis, the eighth consecutive month that exports have fallen according to Bloomberg. Exports to the US fell 10.7% from a year earlier, and exports to China, Japan’s largest trading partner plummeted 14.9% y/y.

However, do not be alarmed, as the IMF is all over the matter. In a statement released on Monday, the IMF had a lot of sage advice to provide Prime Minister Abe about his Abenomics policies that have failed to produce literally any of the intended results.

As the Nikkei Asian Review summarizes, the IMF said that “Abenomics needs to be reloaded”, arguing that income policies and labor market reforms should be moved to the forefront. What stands out immediately here, is that the IMF is advocating a policy whereby companies are made to raise wages by at least 3%, and if they fail to do so, penalties are imposed. If central planning hadn’t jumped the shark a long time ago, we’d submit that this would be that point.

From the Nikkei Asian Review

Despite initial success, progress under Abenomics, Prime Minister Shinzo Abe’s trademark economic policies, has stalled in recent months. The inflation rate has dropped to negative territory again, while economic growth has remained anemic.The IMF now expects Japan’s economy to grow by about 0.5 percent in 2016, before slowing to 0.3 percent in 2017, with potential growth sliding to close to zero by 2030, due to the declining demographic.

Abenomics needs to be reloaded,” the IMF said in its report and argued that income policies combined with labor market reforms should “move to the forefront” of the country’s fight against lagging growth.

The government can introduce a ‘comply or explain’ mechanism for profitable companies to ensure that they raise base wages by at least 3% and back this up by stronger tax incentives or — as a last resort — penalties,” the IMF wrote. Promoting intermediate contracts that balance job security and wage increases will “reinforce income policies,” it added.

“Our perception is that much of the stasis of inflation [in Japan] comes from the legacy, the history of having negative inflation,” said David Lipton, first deputy managing director at the IMF, in a press conference in Tokyo. “Certainly firms have at this point the cash flow and resource at hand to provide some wage increases. There are wage increases evident in a wide range of companies across this economy, so our thought is to suggest that this be a broader practice and that it be more uniform.”

Upon learning of the news that Abe delayed Japan’s long awaited tax hike, we pointed out that it was an admission of failure for Abenomics, and Japan had no hope of ever reducing its debt load. The IMF is now pushing Japan to not only put the tax hikes back on the table, but incresae the percentage to “at least 15%.” as part of a “credible fiscal plan.” – good luck with all of that.

The fund noted that these reforms need to be backed up by measures to support demand as well as credible fiscal plans, and argued that the consumption tax hike to 10%, which the government delayed until October 2019, should be replaced by a gradual increase towards “at least 15%.”

Starting the increases soon and replacing the currently planned 2019 hike with such a pre-announced, gradual path would enhance the credibility of the long-run fiscal adjustment, reduce uncertainty for consumers and avoid large intertemporal shifts in spending around the time of the tax hikes,” the IMF said.

The IMF even admits that NIRP has failed to generate any domestic demand at all, and is calling for the BOJ to scrap any expectation of inflation in order to be more realistic.

The Bank of Japan in February introduced a negative interest rate in part to support domestic demand. However, in the event that the IMF’s suggestions will not be implemented, Japan will lack growth and therefore would need a longer time to get its fiscal books in order. In that scenario, the IMF called on the bank to scrap its time frame for achieving its 2% inflation target, which the BOJ now sets at somewhere in fiscal 2017.

“The monetary policy framework would need to become more flexible, with the BOJ abandoning the use of a specific calendar date for achieving its inflation target,” the IMF said. “While such a shift should raise BOJ credibility by setting a more realistic goal,the transition will need to be well-communicated to avoid perceptions that the BOJ is reducing its commitment to achieving its inflation target and to limit the potential for adverse market reactions, including yen appreciation.”

* * *

So in summary, the IMF has studied Japan’s economy and has come to the conclusion that Abenomics has been a miserable failure. The advice now is to scrap all of the plans for hitting any kind of economic targets, and just start forcing companies to raise wages, while simultaneously raising everyone’s taxes 15%. The central planners are literally starting to lose their collective minds.

END b) REPORT ON CHINA

The Chinese real estate bubble especially in tier one cities has gone exponetial as land prices soar over 50% in one year.  What a bubble!!..

(courtesy zero hedge)

The Chinese Real-Estate Bubble Has Gone Parabolic: Land Prices Soar 50% In One Year

The saying goes “when in a hole, stop digging.” In China, conventional wisdom appears to be flipped on its head as follows: “when facing a massive real estate bubble, keeping blowing.” That is the case at least according to the following chart showing the average price of land, the main ingredient of the property world, in the top 100 Chinese cities, which as of May has hit a record 3,100 Yuan per square meter.

As the WSJ calculates, the average land price per square meter for the top 100 Chinese cities in the first five months of this year jumped nearly 50% from same period last year, citing Wind Information. More stunning is that according to Wind, some land prices are even higher than asking prices for fully-built houses nearby.

You read that right: unbuilt land in many places in China now costs more than fully-finished apartments.

Some examples of how the government itself, through SOEs, is pushing the real-estate bubble on a parabolic path that will lead to an unmitigated bubble explosion.

  • State-owned developer Poly Real Estate bought a piece of land in a Shanghai suburb for 5.5 billion yuan ($835.5 million) last month. This translates to roughly 44,000 yuan per square meter of buildable space. This is more than what full-built houses in the region sell for, with the average price at around 40,000 yuan per square meter. After taking into account construction costs, taxes and other expenses, property prices would have to nearly double for the developer to make money.
  • A property subsidiary of China Gezhouba Group, a state-owned builder of power plants and dams,spent 3.3 billion yuan last month to buy the most expensive land, in terms of price per square meter, in Nanjing. Another state dam construction company, Power Construction Corp. of China, snapped up a piece of land in China’s bubbliest property market, the southern metropolis of Shenzhen, for 8.3 billion yuan.
  • Cinda Real Estate, a subsidiary of state-owned “bad bank” China Cinda Asset Management, has splurged on at least 35 billion yuan of land over the past year, even though the market value of the company, listed in Shanghai, is just 7.3 billion yuan.

Behind all the ludicrous transaction? The Government. And while we understand that the ultimate debt issuers are government-owned entities, the question of where the money comes – ignoring the ultimate guarantor – from is still applicable.

The answer: mountains of new debt.

The WSJ reports that to fund the purchases, Cinda’s net debt has swelled to more than three times its shareholders’ equity. It still managed to raise 3 billion yuan last month in a bond financing at 5.5%, mostly because of its state backing.

And since the company is backstopped by the government, it will be able to issue even more debt before it inevitably defaults on its obligations, leading to yet another zombie company which can not be liquidate due to Beijing being on the hook, yet which can no longer operate.

As the WSJ puts, it, “the domestic bond market and growth in asset-backed securities have made financing easier for developers, causing companies to chase whatever assets they can.”

Which really boils down to one simple admission: it’s a bubble.

It gets better: continuing “reforms” of state-owned enterprises could also be a trigger, as these firms have incentives to inflate their balance sheets to gain clout in consolidation talks. For some which have already invested heavily in real estate, keeping land prices high makes sense. In other words, to keep the value of their collateral high and avoid insolvency, the firms are forced to “paint the tape” and buy even more assets at ever higher prices.

And since the money comes from naive bondholders who are convinced they may even get repaid one day, this reflexive charade will continue for a long time until one day China, too, will realize that one can’t create money out of thin air in perpetuity and live happily ever after.

END

EUROPEAN AFFAIRS

All the big guns are out last night, George Soros and Rothschild warning of a BREXIT. They both have a lot to lose if Britain opts out:

(courtesy zero hedge)

The Big Guns Are Out: Soros, Rothschild Warn Of Brexit Doom; Osborne Threatens With “Suspending” Market

The big guns are officially out.

Just yesterday, we recounted the story of “Black Wednesday” when on September 16, 1992, the UK was forced out of the EU’s exchange-rate mechanism, or ERM, when the BOE tapped out and allowed the British pound to float freely, leading to 15% losses in the sterling. As we noted, this was George Soros’ infamous trade which “broke the Bank of England” and made the Hungarian richer by over $1.5 billion.

24 years later Soros is back, and this time he is warning against the kind of devaluation that made him a billionaire and which he believes will be unleashed by Brexit, when in a Guardian Op-Ed he wrote that U.K. voters are “grossly underestimating” the true costs of a vote to leave the EU, saying that there would be an “immediate and dramatic impact on financial markets, investment, prices and jobs.”

He predicts that the pound would decline “precipitously”, seeing a gargantuan drop of at least 15% and possibly >20% to below $1.15. Considering it has now become trendy for analysts to come up with ever “doomier” forecasts of just how low cable would plunge in case of Brexit, we are surprised Soros stopped there.

Here Soros makes the distinction how the collapse in cable would be different from the one that made him richer by saying that this devaluation wouldn’t be “healthy” like the one in 1992 because BOE wouldn’t cut rates, U.K. has large current account deficit and devaluation unlikely to improve manufacturing exports this time. Just don’t tell that to the BOJ, which would gladly leave the EU – twice if it had to – if it meant a 20% devaluation.

“Brexit would make some people very rich – but most voters considerably poorer”; “there are speculative forces in the, markets much bigger and more powerful” than the speculators that profited from the 1967 devaluation at Britain’s expense. “A vote to leave could see the week end with a Black Friday, and serious consequences for ordinary people.”

Here is the gist of Soros’ scaremongering, from the Guardian op-ed titled “The Brexit crash will make all of you poorer – be warned:

David Cameron, along with the Treasury, the Bank of England, the International Monetary Fund and others have been attacked by the leave campaign for exaggerating the economic risks of Brexit. This criticism has been widely accepted by the British media and many financial analysts. As a result, British voters are now grossly underestimating the true costs of leaving.

As opinion polls on the referendum result fluctuate, I want to offer a clear set of facts, based on my six decades of experience in financial markets, to help voters understand the very real consequences of a vote to leave the EU.

Of course, Soros’ set of facts may be clouded by his far greater equity stake in equity interests around Europe, and the globe, which would be drastially impacted by not only a Brexit, but by a European Union which is suddenly on the rocks.

From that point on, Soros’ entire analysis is on the “worst case” scenario centered around a collapsing pound, something which most ironically every other central bank around the globe is so desperate to achieve:

… sterling is almost certain to fall steeply and quickly if there is a vote to leave– even more so after yesterday’s rebound as markets reacted to the shift in opinion polls towards remain. I would expect this devaluation to be bigger and more disruptive than the 15% devaluation that occurred in September 1992, when I was fortunate enough to make a substantial profit for my hedge fund investors, at the expense of the Bank of England and the British government.

At least he is honest.

It is notable that Soros’ warning comes just days after that of Jacob Rothschild himself who said in another Op-Ed, this time for The Times, that leaving the EU could lead to a “damaging and disorderly situation” in the UK as he urged Britons to vote ‘remain’. Just like Soros, Lord Rothschild, suddenly exhibiting a rare strain of humanitarian concern, said readers should not “risk the wellbeing of our country”and European countries are “better off together”.

He said that “at present we enjoy being a permanent member of the UN security council and we are essential to the G8 and Commonwealth. But diplomacy, defence, the environment and our values of being a liberal democracy will all be at risk” adding that “I can see no good reason why we should accept our playing a diminished role on the world stage,” especially if his own personal fortune would be jeopardized.

* * *

Finally, completing the doom loop, was none other than Chancellor George Osborne who, according to the Telegraph, “refused to rule out suspending trading on the London stock market if Britons vote to leave the European Union on Friday morning… The threat from the Chancellor, made in an LBC radio interview on Monday evening, after the market had closed could force shares down in London as early as Tuesday morning.”

Iain Dale, the presenter, asked Mr Osborne: “If the financial markets do plummet on Friday would you have to consider suspending trading on the FTSE?”

The Chancellor responded: “Well look, the Bank of England and the Treasury – Governor Carney and myself – we have of course discussed contingency plans.

But the sensible thing is to keep those secret and make sure you are well prepared for whatever happens but if you set them all out in advance then you rather undermine the power of those plans.”

Pushed again on the contingency plans, Mr Osborne said: “I have a responsibility to the people listening to this programme to do all I can to protect them.  “But I have to tell you that you cannot in the end protect people from the economic shock that leaving the EU would bring about.”

And in case the threat of shuttered markets was not enough, Osborne also hinted at imminent mass layoffs, suggesting that redundancy notices could be issued hours after Britons vote to leave the EU at the vote.

Mr Osborne pointed to warnings from the London Stock Exchange there would be 100,000 job losses in the City after a Brexit.

Mr Osborne was challenged about whether redundancies warned by the bank JP Morgan could come as early as Friday – the day after the referendum. Mr Osborne replied: “I think that will start to happen very quickly, sadly.”

Amid all this gloom, Osborne presented the “only” alternative that would not lead to the imminent economic collapse he so forcefully imagines:

“he added that if the UK voted to remain there would be a “quick snap back” for the British economy, he said that “decisions will be taken and investment will come in”. Asked if these redundancy notices would be issued on Friday morning if Britons vote to leave, Mr Osborne said: “That will start to happen very quickly sadly.”

Now if only the people will do what these noble public servants tell to do in their own best interest…

Finally, Osborne also played down claims he could be forced to leave the Treasury after the referendum amid anger from Tory backbenchers over the way he has campaigned, saying: “It’s really not about my job”.

Oh but is George, just like it is in Soros and Rothschild’s own self interest for the people to vote “Remain.” To suggest otherwise is naive, but it may also be irrelevant. With just three days until the vote, the scaremongering tactic, not to mention the murder of an innocent woman, may have already done its job judging by the reveral in public opinion.

In any case, one can only hope that unlike the case of the failed Greek referendum where the people voted one way only to get the opposite, no matter how the Brits vote, it will truly represent the democratic will of the majority and that particular outcome is what they get.

END SocGen talks about Britain’s real problems whether BREXIT is a reality or not>> (courtesy Soc Generale/zero hedge) When Brexit Has Come And Gone, The Real Problems Will Remain: A Reminder From Socgen  

In a few days, Brexit will come and go, and just a few days later it will be forgotten, as either outcome will be far less dramatic than has been widely predicted by the same fearmongering economist pundits who have been wrong about everything else for the past 8 years. Ironically, the better outcome for the market is precisely a Brexit as the panic selloff will prompt central banks around the globe to boost enough monetary stimulus to send risk assets to new all time highs.

What will remain, however, are the real problems.

Here is SocGen with a useful reminder of just what those are, and why the market may have already forgotten that just one week ago the Fed threw in the towel when addressing precisely these problems.

From SocGen’s Andrew Lapthone:

Global equity markets continued to struggle last week, with the MSCI World index off 1.8% pushing the index back into red for the year. Big losses were seen in Japan with the Topix 500 down 6% and the volatile Mothers index crashing 18.5% over the week as the yen continued to strengthen. According to the BOE measure, the trade-weighted yen is now up more than 20% over the past year and back to where it stood three years ago. In the battle for the weakest currency, Japan looks to have thrown in the towel.

Whatever the outcome of the Brexit vote this week investors will still be facing the prospect of negative rates and negative yields on a huge range of bonds, massive corporate leverage with worryingly rising delinquencies and of course expensive equity markets and falling profits. To that extent these political events are a distraction from the main event, weak global economic growth and perverse asset markets. So whilst the market preference for the status quo might be celebrated in the short-term, actually when the fog clears all of the problems will still be there.

Let’s take the UK for example. The market will most probably rally as it is doing today if Brexit is rejected, but rally to where? We have already highlighted the excessive leverage and payout ratios in the UK, but these are not the only problems. On a disaggregated basis, median valuations are at the upper end of historical estimates (see below), profitability whether measured on an ROE, ROA or ROIC basis has rarely been this weak outside of an economic slump, and these figures do not materially change whether the problematic commodity and financial sectors are included or not. Brexit or not, the UK equity market hardly looks healthy.

END And now correctly, we see this UK billionary, Peter Hargreaves believes a BREXIT will be good for the UK (courtesy zero hedge/Peter Hargreaves) Why A UK Billionaire Believes Brexit Would Be “Good For The UK”

The City of London and the pound would both benefit from the U.K. leaving the EU, says billionaire Peter Hargreaves. Brexit may knock the pound initially, but it would rebound, the co-founder of Hargreaves Lansdown — the largest U.K. retail broker, with more than $84.1 billion equivalent in assets — told Bloomberg Briefs’ Geoff King in a June 17 interview.

Q: Why do you support “Leave”?

A: Every year in the EU it gets more political, it gets more legislative, more regulative; we don’t seem to get very much benefit from it. We will be far better out.The EU as an economic mark is declining in the world, when there were only nine countries in it was 30 percent of the world’s GDP, now there are 28 it is only 17 percent. That’s some serious decline. Other countries that are growing — India, parts of Africa, Brazil, China and even Russia — are the places we should be trading with.

Q: How do you counter strong economist/analyst support to remain?

A: There’s a huge amount of vested interest, a lot people making these comments are politically motivated and also work for big banks that aren’t British. They’ve built these enormous dealing rooms and offices in the City of London and Canary Wharf and their bosses are saying we don’t want to endanger this huge investment of ours. I don’t think it will endanger that huge investment. You can’t move the City of London to anywhere else in Europe. It’s madness to suggest it. Frankfurt, the place everybody keeps talking about, only has a population of 700,000, it could not accommodate anything like the City of London. The City of London is absolutely guaranteed, it is bound to survive. The only center that could take over would be Zurich and that’s not in the EU either. It’s absolute drivel that the City of London will be affected. The City of London will go out and it will deal with these emerging economies in the Pacific Basin, Southeast Asia, Africa —  they’re all going to want finance for different things. You can’t set up the City of London anywhere else. It takes years, and during that time the City of London will have grown stronger. Any attempt at usurping it will fail.

Q: How will London’s role change?

A: It will become more global. There are only two global financial cities: New York and London. The fact London is no longer shackled to the EU means it will go out and deal with the rest of the world. New York is not in a great place, it is only in a great place for dealing with America and South America. The London time-zone is perfect for almost everywhere else in the world.

Q: What will happen to the EU?

A: The EU will disintegrate when we leave. They will realise there is nothing left. The political union is going to be a disaster and they’ll want a free-trade area. Do you know who’ll be the first country invited to that free trade area? The U.K.

Q: What happens to interest rates with a Brexit?

A: I don’t think there’ll be any change. One thing every country in the world is trying to do is get the value of their currency down. That’s why interest rates are low. It is quite likely the pound will come under a bit of pressure, initially it will go down. That will be compensation for any tariffs, so the tariffs won’t bother us. Not that they will instigate tariffs anyway, but any worry about it will already be compensated by the pound. The pound will become strong again, just like after we left the ERM snake under John Major. [At that time] the pound came under enormous pressure, but within 12 months was one of the strongest currencies in the world because we weren’t shackled to the euro.

Q: How will factors holding down inflation differ?

A: Everyone is trying to increase inflation by reducing their interest rates and reducing the value of their currencies. We don’t know what the impact of us leaving will be. I can’t make any suggestion on how we get the currency to the level we want and inflation to level we want until I know how markets react to us leaving the EU. It is a hypothetical question, it may do it automatically, we may have measures to take. I think there’ll be a knee-jerk reaction, but afterwards there’ll be calm with people realizing it is no big deal us leaving. I think everyone is going to realize it is actually going to be good for the British economy.

Q: Would leaving the EU impact savings and investment?

A: I have more money in the stock market than any other person in the U.K., I have 2 billion pounds in the U.K. stock market. No one has anything like that. Do you think I would be intent on leaving if I thought that was going to endanger my wealth?

end At 8:30 est  (3:30 pm London Time) a new poll suggests a rise in the leave vote: (courtesy zero hedge) Stocks, Sterling Slide As Brexit Poll Show Rise In “Leave” Vote

Following the mixed picture from last night’s polls (YouGov “Leave” +2, ORB “Remain” +7), Soros scaremongery, and Schaeuble seriousness this morning, “UK exit would be ‘very’ negative for Germany,” bookies’ odds hover around 75-80% and Cable continues to push higher (to 6-month highs) as if the Brexit vote was a done deal. However, the Survation polls showed a rise from 42% on 6/18 to 44% today for “Leave” and Sterling is starting to slide…

Before the poll hit, Germany was in full fear mode:

  • *SCHAEUBLE SAYS `EUROPE ISN’T IN GOOD SHAPE’
  • *SCHAEUBLE SAYS EU CAN’T GO ON AS BEFORE IF U.K. REMAINS
  • *SCHAEUBLE SAYS U.K. EXIT WOULD BE `VERY’ NEGATIVE FOR GERMANY
  • *SCHAEUBLE SAYS U.K. MARKET VERY IMPORTANT FOR GERMANY

Which makes us wonder, if UK Brexits, will Germany bit off its UK-Trade-deal face to spite its own nose?

Survation’s last poll (on 6/18) was as follows:

  • *U.K. SURVATION POLL ON EU SHOWS REMAIN 45%, LEAVE 42%: PA

And today’s new post-Cox poll:

  • *U.K. POLL ON EU SHOWS REMAIN 45%, LEAVE 44%: IG/SURVATION

Which has sent Cable leaking lower…

As “Leave” gains post-Cox.

As JPMorgan notes, given that the actual referendum isn’t until Thurs night and the existing (albeit diminished and unlikely) potential of an “Out” victory, the SPX will likely struggle to move north of 2100 until at least Fri.

In the intermediate-term, the bull vs. bear debate is relatively balanced w/each side possessing credible ammunition with which to make their case.

However, in the near-term bears only have Brexit and if “Out” losses then the late-May/early-June narrative will quickly reassert itself (where the combination of very gloomy sentiment, increased US election clarity, a benign Fed, and ~$130 in ’17 EPS all helped to underpin an equity upside pain trade).

end The Cardinals of Karlsruhe fold and allow the ECB’s OMT program of unlimited bond buying: (courtesy zero hedge) German Top Court “Reluctantly” Rejects Challenges To ECB’s OMT Program, Lists 6 Conditions

With traders already on edge in illiquid markets ahead of the Breferendum, one potential risk to sentiment today was the long-awaited decision by Germany’s powerful constitutional court whether Mario Draghi’s OMT, or Outright Monetary Transactions, was constitutional. However, any lingering concerns were swept away when the Kardinals of Karlsruhe “reluctantly” ruled in favor of the one of the European Central Bank’s most important tools to fight financial crises, which however was caveated with six specific conditions.

Specifically, Germany’s highest court dismissed five suits seeking to stop the country from participating in a controversial bond-buying plan that underpinned European Central Bank President Mario Draghi’s 2012 vow to do “whatever it takes” to save the euro. While they voiced concerns, the German judges said they were bound by last year’s ruling on the Outright Monetary Transactions program by the European Court of Justice, which said it includes sufficient safeguards to prevent the bond purchases from being disproportionate, which would violate EU rules governing the ECB.

The ECB’s landmark bond-buying programme, launched at the height of the eurozone’s debt crisis in 2012 well ahead of the ECB’s subsequent launch of QE, despite having never been used is widely credited with bringing the currency area back from the brink of collapse.

In the final ruling issued on Tuesday, the Karlsruhe-based court said should the scope of OMT be limited and other conditions for purchases met, the scheme would “not currently impair the Bundestag’s overall budgetary responsibility” or “‘manifestly’ exceed the competences attributed to the European Central Bank”. As the FT adds, after four years of judicial battles, the decision now clears the last remaining stumbling block to the deployment of the policy, under which the central bank can buy bonds of distressed member states.

Previously, a group of more than 37,000 German academics, businessmen and politicians had objected to the scheme, arguing it violated German federal law through the illegal monetary financing of eurozone governments. But ahead of the German decision, the European Court of Justice ruled in June last year that OMT was in accordance with EU treaty law.

In line with that decision, the German court said should all six of the conditions laid out by the ECJ be met, OMT would not constitute an “ultra vires act” in breach of German federal law. These include making sure the volume of any bond buying is “limited from the outset”, “purchases are not announced” and the ECB only holds securities until maturity in “exceptional cases”.

The ruling was promptly criticized by some such as Clemens Fuest, president of the Munich-based Ifo Institute, who said “the judges have made a U-turn on their original ruling, and haven’t dared to to restrain the ECB’s bond buying further than the ECJ. It’s a pity, as it is obvious that the OMT program primarily follows the fiscal goal of retaining the access of highly-indebted states to credit.”

While OMT has never been called upon, a negative ruling would have been a blow to the ECB. The program gives it a tool to address a breakdown in monetary-policy transmission in specific countries. In contrast, its current program of quantitative easing buys debt across the entire currency bloc in proportion to the size of each nation’s economy.

The German court laid out six conditions for approval of ECB’s OMT plan, noting that the Bundestag and government need to monitor volume and risk structure of bonds to avert any “concrete risk” to German budget. The conditions were the following:

  • Bond purchases may not be announced beforehand
  • Volume of purchases must be limited in advance
  • There must be a minimum time between issuance of bonds by states and purchase by ECB
  • Bonds can only be purchased from states that have access to financial markets
  • As a rule, bonds are not held until maturity, only in exceptional cases they can be held until maturity
  • Bonds must be sold back to markets when intervention no longer necessary

Needless to say, a negative judgement could have seriously curbed the German Bundesbank’s role in OMT and spooked financial markets ahead of the UK’s increasingly tight EU referendum. The court’s ruling said: “If interpreted in accordance with the Court of Justice’s judgment, the OMT programme does not present a constitutionally relevant threat to the Bundestag’s right to decide on the budget. Therefore, it can currently also not be established that implementation of the OMT programme would pose a threat to the overall budgetary responsibility.”

The decision was largely symbolic: the unused OMT has since been overtaken by the ECB’s quantitative easing measures, in which the central bank is purchasing government, corporate and asset-backed bonds across all member states in a bid to revive growth and inflation in the bloc. However, even these stimulus measures, launched in March last year, have also met legal challenge with four current outstanding cases against the QE scheme. Today’s decision will likely weaken any future German challenges against ECB policies.

The German judges said the Luxembourg-based European Court of Justice had “provided no answer” to the question of the ECB’s independence which it argues has led to “a noticeable reduction in the level of democratic legitimation of its actions”. However, it did not deem these objections sufficient to reject the ECB’s measures.

“The German Court’s ruling had the potential to shake the European Union or at least the monetary union to its very foundations”, said Carsten Brzeski at ING. However, as the FT concludes, “Fortunately, it did not”.

end

EMERGING MARKETS

I will bet you have never seen this happen to a major country:  Brazilian Telecom company OI files for bankruptcy protection in the country;s largest bankruptcy in history: (19.2 billion in debt)

(courtesy zero hedge)

Brazilian Telecom Giant Files Largest Bankruptcy In Nation’s History

Brazil has had a rough past few months to put it mildly. Ex-president Dilma Rousseff has been suspended and now faces an impeachment trial, interim president Michel Temer is embroiled in corruption allegations already, theeconomy is crumbling, and Rio has declared a state of “Public Calamity” putting the Olympic games in question. Now, to add insult to injury, we learn that Brazil’s fourth largest telephone company Oi SA filed the largest bankruptcy in the country’s history on Monday, Brazil is in need of a mercy rule, even as investors who have been scrambling to buy Brazilian assets in 2016 realize just how bad things really are.

After talks with creditors to restructure its debt collapsed, Oi and six subsidiaries filed for bankruptcy listing $19.26 billion in debt. In its filing, the company said it chose reorganization in order to preserve the value of its holdings and to continue to serve its customers according to the WSJ.

Oi has low penetration in the mobile phone and broadband markets, and Since 2009 the company had accumulated large amounts of debt in order to complete two mergers, first with Brasil Telecom and later with Portuguese company Portugal Telecom. As the WSJ notes, those deals failed to generate enough cash flow to fund the company’s investment needs.

CEO Bayard Gontijo resigned on June 10, and although no reason was given for Gontijo’s departure, shareholders had been putting significant pressure on the CEO to resist a proposal by creditors to convert debt into equity – a plan which according to the WSJ would have given a 95% stake of the restructured business to existing bondholders, thus significantly diluting shareholders.

As of March 31, Oi had reported gross debt in the amount of $14.72 billion, much of which was held by international bondholders.  The bonds, as shown below, have been plunging over the past few months, anticipating precisely this outcome:

Debt negotiations involved Oi’s executives and main shareholder, Bratel BV which controls 22.24% of the company. Representing the creditors was investment bank Moelis & Co who is advising creditors holding roughly 40% of the outstanding bonds. Those creditors being represented by Moelis include Pacific Investment Management Co, Citadel LLC and Wellington Management Co.

Other notable shareholders include the Ontario Teacher’s Pension Plan, with a 4.77% stake; the equity arm ofBrazil’s development bank, with 4.63%; and BlackRock, with .96%. Additional notable creditors include commercial banks such as Banco Itau SA Banco Santander SA, Banco do Brasil SA and Caixa Economica Federal. 5% is held by development banks such as the Brazilian Development bank and Banco do Nordeste do Brasil SA.

Just last week, Fitch downgraded Oi by two notches to C from CCC, citing an unsustainable capital structure.

As Bloomberg notes, the impact of Oi SA’s bankruptcy filing will go beyond Brazil, with the company’s euro-denominated bonds comprising 1.8% of Bank of America Merrill Lynch’s euro high-yield index by face value, the 11th-biggest issuer in the index.


* * *

And now that the bankruptcy spigot in Brazil has been tapped, we eagerly await as the repricing of Brazil’s equities – which have soared in the past few months on empty hopes the Temer regime would magically make things better- takes place – gradually at first, then very fast.

END OIL ISSUES

What a joke:  Militants agree to a “ceasefire” with Nigeria and that causes oil to fall to the 48 dollar handle:

(courtesy zero hedge)

WTI Crude Tumbles To $48 Handle After Nigeria ‘Ceasefire’ With Militants

While crude has short-squeezed over 7% higher since the death of UK lawmaker Jo Cox, it is stumbling on fundamentals overnight as Reuters reports Nigeria has agreed a one-month ceasefire with militants including the Niger Delta Avengers in the oil-producing southern regiondespite the NDA denying it a week ago.

As Reuters reports,

Militant groups including the Avengers, who have claimed responsibility for a string of attacks on oil and gas facilities in recent weeks, could not immediately be reached for comment.

They say they want a greater share of Nigeria’s oil wealth to go to the impoverished Delta region. Crude sales make up about 70 percent of national income and the vast majority of that oil comes from the southern swampland.

The latest attacks have pushed production to a 30-year low.

Last week the Avengers said they would negotiate with the government if independent foreign mediators were involved.

“It was very difficult getting the Niger Delta Avengers to the negotiating table but we eventually did through a proxy channel and achieved the truce,” said the official, who asked not to be identified.

A second government official, who also wished to remain anonymous, said a “a truce was agreed” with militants.

*  *  *

One wonders why suddenly the NDA decided to play ball with the hyperinflating government? Perhaps the same ‘people’ behind the sudden mysterious rise of the freedom fighters who control global oil prices is now more worried about the state of the global economy being able to handle higher oil prices?

And not helping matters, despite China’s May crude imports from Russia and Iraq rising to a record…

  • China’s imports of crude oil from Russia rose 34% y/y to record 5.24m mt, or 1.24m b/d, according to data released Tuesday by the General Administration of Customs.
  • Imports of Iraq crude +57% y/y to a record 3.4m mt, up from April’s 3.14m mt
  • Imports of Saudi crude +34% y/y at 4.08m mt, down from April’s 4.12m mt
  • Imports of Iran crude +19.5% y/y to 2.63m mt, down from April’s 2.76m mt
  • Imports of Angola crude -4.9% y/y to 3.1m mt, down from 3.98m mt in April
  • Russia, Saudi, Iraq were China’s top 3 crude suppliers in May

Overall, it appears China demand is starting to rollover…

  • China’s apparent oil demand fell 0.9% in May, according to data compiled by Bloomberg.
  • Naphtha demand +21.1% y/y to 935k b/d
  • Gasoline demand -1.7% y/y to 2.68m b/d
  • Diesel demand -12.9% y/y to 3.17m b/d

So, the Nigeria deal will add supply and the China news cuts demand… now what happens next?

 

end

 

Then oil spikes up on a huge inventory drawdown:

(courtesy zero hedge)

WTI Crude Spikes Above $50 On Massive Inventory Draw

Having v-shape recovery-ed intraday – as Nigeria news came and was denied – WTI Crude (Aug) was hovering around $49.90 before API data hit. Following 4 weeks of crude draws in a row, and with expectations of a 1.7mm draw, API reported another – this time massive – 5.2m barrel draw – the most in 6 months. Across the entire complex, inventories drew down more than expected, sendingWTI surging back towards $50.50.

 

API

  • Crude -5.22m (-1.7m exp.)
  • Cushing -1.311m (-50k exp.)
  • Gasoline -1.47m (-300k exp.)
  • Distillates -1.699m (+300k exp.)

 

And the reaction in crude is clear as August WTI has surged from $46.50 to $50.50 in 3 days…

 

Charts: Bloomberg

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

Euro/USA   1.1323 UP .0002 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 104.62  UP 0.791 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4746 UP .0078 (MUCH LESS THREAT OF BREXIT)

USA/CAN 1.2777 DOWN .0022

Early THIS TUESDAY morning in Europe, the Euro ROSE by 2 basis points, trading now WELL above the important 1.08 level FALLING to 1.1320; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED DOWN 10.25 POINTS OR 0.35%   / Hang Sang CLOSED UP 158.74 POINTS  OR 0.77%   AUSTRALIA IS HIGHER BY 0.33%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this MONDAY morning: closed UP 203.81 POINTS OR 1.28% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 158.74 POINTS OR 0.77% . ,Shanghai CLOSED DOWN 10.25 POINTS OR 0.35% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE GREEN

Gold very early morning trading: $1178.70

silver:$17.39

Early TUESDAY morning USA 10 year bond yield: 1.681% !!! UP 2 in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.488 UP 2 in basis points from MONDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early TUESDAY morning: 93.57 DOWN 8 CENTS from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

END

 

And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield:  3.17% UP 1 in basis points from MONDAY

JAPANESE BOND YIELD: -0.140% UP 1/2  in   basis points from MONDAY

SPANISH 10 YR BOND YIELD:1.51%  UP 3 IN basis points from MONDAY

ITALIAN 10 YR BOND YIELD: 1.45  UP 2 IN basis points from MONDAY

the Italian 10 yr bond yield is trading 6 points lower than Spain.

GERMAN 10 YR BOND YIELD: +.05% up 3 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

 

Euro/USA 1.1258 DOWN .0063 (Euro =DOWN 63 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 104.78 UP .954 (Yen DOWN 95 basis points )

Great Britain/USA 1.4640 DOWN.0028 ( Pound DOWN 28 basis points/(MORE BREXIT CONCERN)

USA/Canada 1.2808- UP 0.0009 (Canadian dollar DOWN 9 basis points  AS OIL ROSE  (WTI AT $49.24).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 63 basis points to trade at 1.1258

The Yen FELL to 104.40 for a LOSS of 95 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was DOWN 28 basis points, trading at 1.4640 

The Canadian dollar FELL by 9 basis points to 1.2808, WITH WTI OIL AT:  $48.95

The USA/Yuan closed at 6.5890/

the 10 yr Japanese bond yield closed at -.140% UP 1/2  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 4 IN basis points from MONDAY at 1.709% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.514 UP 4 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 94.06 UP 45 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY

London:  CLOSED UP 22.55 OR 0.36%
German Dax :CLOSED UP 53.52 OR  0.54%
Paris Cac  CLOSED UP 26.48  OR 0.61%
Spain IBEX CLOSED UP 20.20 OR 0.23%
Italian MIB: CLOSED UP 77.72 OR 0.45%

The Dow was up 24.86  points or 0.14%

NASDAQ up 6.55 points or 0.14%
WTI Oil price; 48.95 at 4:30 pm;

Brent Oil: 50.88

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  63.95 (ROUBLE DOWN 4/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD REMAINS AT +.05%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:48.95

BRENT: 50.90

USA 10 YR BOND YIELD: 1.709% 

USA DOLLAR INDEX: 94.06 UP 45 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4646 DOWN .0023  or 23 basis pts.

German 10 yr bond yield at 5 pm: +.050%

 

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

Stocks Steady Amid Brexit Bounce, Yellen Yawn, & Copper Chaos

Seemed appropriate…

 

The polls and the bookies are very far apart…

 

Which impacted Cable but stocks didn’t care…

 

Equity market volume was abysmal…

 

Stocks really went nowhere today with Trannies and Small Caps underperforming…

 

But are still up notably from the moment Jo Cox death was announced…

 

Short-term vol soared… (VIX tagged 19 briefly but STVX surged)

 

Treasury yields pushed higher across the complex again today, not helped by an ugly 5Y auction…but ended only 1-2bps higher

 

Following this morning’s poll – with a rise in “Leave” votes – Cable sold off and US Dollar rallied for the first time in 5 days…

 

Cable gone nowhere in 36 hours…

 

This is anything but over – ST Cable vol is spiking vs 1m Vol.

 

Commodities were mixed as USD strength kept a lid on PMs while copper and crude surged into expiration….

 

And finally, copper prices surged by the most in 6 months in the last 2 days. Of course the “Bremain” rally helped but, given the expiration of the July contract – and the fact that someone had basically cornered the copper market – we suspect this surge is much more technical forced-in buyers than anything ‘fundamental’. Based on Bloomberg’s prices, July drastically outperformed Sept futures today into its expiration…

 

And crude round tripped (ahead of tonight’s API report) on the back of denied reports of a ceasefire between militants and the government in Nigeria…

 

Charts: Bloomberg

end

 

We have been reporting on that huge gas leak in Southern California.  Reuters comments that the entire Southern half of California will be subject to blacouts lasting 14 days without power.

(courtesy Mac Slavo/SHFPlan )

Blackouts Loom With California In Power Grid Emergency: “All Customers Should Expect 14 Days Without Power”

Submitted by Mac Slavo via SHTFPlan.com,

The entire Los Angeles metropolitan area and most of Southern California can expect blackouts this summer.

The power grid is under direct threat as a result of the unprecedented, but little reported, massive natural gas leaks at Alisco Canyon that was ongoing for  four months as an intense summer heat wave sets in.

According to Reuters:

California will have its first test of plans to keep the lights on this summer…

With record-setting heat and air conditioning demand expected in Southern California, the state’s power grid operator issued a so-called “flex alert,” urging consumers to conserve energy to help prevent rotating power outages – which could occur regardless.

Electricity demand is expected to rise during the unseasonable heatwave on Monday and Tuesday, with forecast system-wide use expected to top 45,000 megawatts, said the California Independent System Operator (ISO), which manages electricity flow through the state. That compares with a peak demand of 47,358 MW last year and the all-time high of 50,270 MW set in July 2006.

That could put stress on the power grid, particularly with the shut-in of Aliso Canyon, following a massive leak at the underground storage facility in October [Editor’s Note: which was not stopped fully until mid-February 2016].

The large-scale natural gas disaster – which curiously escaped media frenzy and widespread environmental concern – has resulted in the shutdown of key storage facilities that supply most of the power for the southern portion of the state.

As summer demand for electricity to cool homes and businesses kicks into high gear, power plants are planning to shut down, with supply shortages triggering controlled blackouts and brownouts.

Reports say that “all customers” should expect to be without power a total 14 days – 2 weeks time – out of this summer. Some 21 million Californians stand to be directly affected:

All customers, including homes, hospitals, oil refineries and airports are at risk of losing power at some point this summer because a majority of electric generating stations in California use gas as their primary fuel. In April, millions of electric customers in Southern California were warned they could suffer power outages on up to 14 days this summer due to the closure.

[…]

Unlike some other gas transmission systems that can store large amounts of so-called linepack gas in pipelines, like PG&E Corp in northern California, SoCalGas cannot function with only pipeline or storage supplies.

Planned rolling brownouts have been done on a regular basis in Southern California since the days of Enron and the California energy crisis of 200o-2001, but the situation is getting more dire.

As demand spikes, customers can expect to pay more for electricity, even as supplies threaten to be cut off, leaving families, residents and businesses in the dark.

All this, as California’s historic drought problems continue to plague the state and restrict available services.

As Tess Pennington notes:

This puts stress of the other electrical grids who then compensate for the loss of energy to that existing grid. When these events take place, there is an overwhelming increase of power in homes and commerce to either generate heat, air conditioning or electricity. When this need overwhelms the grid, the utility company intentionally “shuts off the power to an area in order to reduce the load on an electricity generation and grid. The utility company turns it back on, and then shuts the power off in a different area, with outages in any given area typically lasting 60 to 90 minutes, according to the California Energy Commission. This is a last resort measure of utility companies to avoid an even worse situation — a total power blackout.

Of course, there is plenty of room for unplanned blackouts as well, as an increasingly vulnerable power grid nears the perfect conditions for a grid down scenario.

In the worst case scenario, these massive power outages, particularly if they are sustained for longer periods (authorities estimate up to 2 weeks without electricity is likely, though not necessarily in consecutive days), could interrupt other vital services – including grocery deliveries, water, gasoline at the pumps, and even communications.

The larger question is whether or not they want the grid to fail.

It is simple economic fact that the power companies stand to make more money of a power shortages during a crisis than they do during abundant and cheap energy.

Homeland Security and other government agencies have been preparing in secret for a grid disaster for several years now

Former DHS secretary Janet Napolitano ominously warned ahead of the Grid Ex II multi-agency drill that an unprecedented collapse of the power grid is imminent, and could result from a cyber attack, an EMP or a massive natural disaster:

The outgoing Homeland Security Secretary has a warning for her successor: A massive and “serious” cyber attack on the U.S. homeland is coming, and a natural disaster — the likes of which the nation has never seen — is also likely on its way.

[…]

An electrical grid joint drill simulation is being planned in the United States, Canada and Mexico. Thousands of utility workers, FBI agents, anti-terrorism experts, governmental agencies, and more than 150 private businesses are involved in the November power grid drill.

If the power grid fails, a lack of electricity and food delivery are only the first wave of troubles facing the American people. Police could face major problems with civil unrest. Of course, there also would not be any electric heating or cooling, which easily could lead to many deaths depending on the season. (source)

It seems that it is a matter of when, not if.

That’s why having an off-grid, alternative source of energy is essential for any prepper or level-headed individual, though many communities are now discouraging solar by requiring that it be connected to the grid and regulated by energy companies.

At a minimum, with an admitted potential for two weeks with the light out, you should have a one month supply of food for your family, as well as basic emergency supplies (including candles, flashlights, batteries and other light sources).

It is also prudent to:

  1. Follow energy conservation measures to keep the use of electricity as low as possible, which can help power companies avoid imposing rolling blackouts.
  2. Look into alternative power sources to supply your home with power.
  3. Have ways to prepare food off the grid.
  4. Keep your car tank at least half full because gas stations rely on electricity to power their pumps.
  5. Be aware that most medication that requires refrigeration can be kept in a closed refrigerator for several hours without a problem. If unsure, check with your physician or pharmacist.
  6. Know where the manual release lever of your electric garage door opener is located and how to operate it. Garage doors can be heavy, so know that you may need help to lift it.
  7. Keep a key to your house with you if you regularly use the garage as the primary means of entering your home, in case the garage door will not open.
  8. Have money on hand in case stores are not processing credit cards.

(Among other good ideas. Read more from Tess Pennington’s Are You Ready Series: Rolling Blackouts and Power Outages)

This isn’t just planning for the possible, this is planning for the inevitable, and even the California authorities admit it.

end

My goodness, Janet must be reading zero hedge and David Stockman:  USA stocks are vulnerable as forward valuations are well above normal:

(courtesy zero hedge)

Fed Warns Stocks Are “Vulnerable”, Forward Valuations “Well Above” Norms  

In what we are sure will be aggressively spun by the mainstream media, The Fed’s full monetary policy report dropped a notable tapebomb this morning…

  • *FED: STOCKS’ FORWARD P/E RATIOS WELL ABOVE THREE-DECADE MEDIAN
  • *FED: STOCKS VULNERABLE TO A TERM PREMIUM RETURN TO NORMAL

Remember, “don’t fight The Fed” unless of course she says “sell.”

As The Fed explains:

Valuation pressures have generally stayed at a moderate level since January, though they rose for a few asset classes. Forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades.

Although equity valuations do not appear to be rich relative to Treasury yields, equity prices are vulnerable to rises in term premiums to more normal levels, especially if a reversion was not motivated by positive news about economic growth.

It appears The Fed has been reading:

Finally, the chart below shows the median price/revenue ratio of S&P 500 component stocks, which recently pushed to the highest level in history, exceeding both the 2000 and 2007 market peaks. In recent quarters, the broad market has deteriorated, even in the most reasonably valued decile of stocks, but the most richly valued decile has held up for a last hurrah, as it did near the peaks of previous bubbles. This dispersion has created a headwind for hedged-equity strategies in U.S. stocks, particularly value-conscious strategies, but investors should understand that beneath the surface of this short-term outcome is singularly the most extreme point of overvaluation for the median stock in history.

*  *  *

Full monetary policy report:

20160621_mprfullreport

end

A major trucking company, Werner warns about the awful swtate of trucking and logistics inside the USA/  the stock plummets today:

(courtesy zero hedge)

Werner Issues “Disturbing” Warning About State Of Trucking And Logistics Industry

Following ongoing warnings of the dismal reality surrounding heavy, Class 8 trucking, reality finally hit overnight when trucking and logistics company Werner Enterprises warned that a sluggish freight market and increases to driver pay would hurt its second-quarter earnings, leading to a plunge in its stock price. Werner said it now expects to report a profit of 21 cents to 25 cents a share, which includes a pretax gain of $3.4 million from the sale of real estate; this was nealy 50% below the consensus forecast of 40 cents a share.

Werner also said market conditions have led to “difficult” customer rate negotiations.

The announcement was a confirmation of the company’s Q1 warning when the company said market conditions could make it tough to attain year-over-year rate increases during the next few quarters.

Werner was not alone: its peer Knight Transportation and Swift Transportation all saw double-digit profit declines in the first quarter, partly because of rising driver wages. Knight and Swift shares also declined in sympathy in after-hours trading Monday. Werner said Monday that it is focusing on cost-management initiatives. The company is moving toward a goal to reduce the average age of its truck fleet to about 1.5 years by Dec. 31, but it doesn’t plan to expand its truck fleet until freight and rate markets “show meaningful improvement.”

The announcement was enough for Deutsche Bank to change its Buy recommendation on WERN shares to a Hold. This is what DB said:

Yesterday after the close, WERN preannounced Q2 EPS in the range of $0.21-0.25/share (vs. DBe and Consensus $0.40/share), including a pre-tax gain on sale of $3.4 million (~$0.03/share). The company notes that the weaker-thanexpected Q2 guidance is due largely to a challenging freight backdrop which is putting downward pressure on pricing (revenue/total mile), driver pay increases which were implemented in Q1 2016 and Q4 2015, and a soft used truck market. We note that the preannouncement is particularly disturbing given normal seasonality (see Figure 1 below) and bodes poorly for TL Q2 earnings, which will pressure the stock as well as the TLs such as HTLD, SWFT, KNX, and JBHT. For the first time in our model (which dates back to 1999), WERN’s Q2 EPS is poised to decline sequentially from Q1 as a perfect storm (higher driver pay, lower rates, weak tractor utilization, deteriorating mix [increased spot market exposure], and fuel) weighed on earnings. Consequently, Q2 EPS is expected to decline $0.05/share sequentially to $0.23 instead of experience the more normal $0.10/share average increase as illustrated below.

We are lowering our 2016-17E EPS to $1.00 and $1.25 from $1.60 and $1.82, respectively. Our new $22 price target is based on 17.5x multiple our new 2017E EPS. We have raised our target multiple to 17.5x our 2017 EPS estimate (from 16x previously) to reflect our downwardly revised earnings expectations and looming government regulations. Since we believe investors will be looking out to better EPS trends in H2 2017+ we have increased our target multiple to reflect this expectation as we see trucking fundamentals troughing in H2 2016 as supply starts to exit the industry. Our sense is that weather and/or a holiday uptick in volumes could serve to tighten trucking capacity in late 2016/early 2017. Upside risks include: better-than-expected cost performance, improved driving school results, new and/or accelerated government regulation, and the broader economy. Downside risks include: weaker-than-expected rates, used truck prices, higher-than-expected driver pay inflation, and the broader economy.

It appears that the Fed has another secular, not cyclica, concern to worry about.

end Dave Kranzler does a good job reporting on the tanking economy: (courtesy Dave Kranzler/IRD) The Economy Is Tanking – Inflation/Obamacare Attacking The Middle Class June 21, 2016Financial Markets, Housing Market, Market Manipulation, U.S. Economy, , , , ,

The economic reports continue to show an overall rate of deterioration in economic activity down to levels – in general – comparable with the 2008-2010 period.  Freight transportation activity is part of the “nerve center” of the economic system.   The latest data from Cass shows a rapid decline in both freight shipments and expenditures that began in mid-2014:

Although shipments ticked up from April to May 1.3% – attributable to seasonality –  year over year shipments for May dropped nearly 6%:

As you can see, expenditures plunged 10.1% year over year.  North American freight shipments reflect all economic activity at all levels of the economic system across a broad spectrum of industries.

Retail sales reports going back to December 2014 are signalling economic stress at the household level:   “During normal economic times, annual real growth in Retail Sales at or below 2.0% signals an imminent recession. That signal basically has been in play from December 2014, based on industrial production, retail sales and other indicators), suggesting a deepening, broad economic downturn” (John Williams,Shadowstats.com)

This financial stress at the household level is beginning to show up in credit delinquencies and defaults.  Last Tuesday Synchrony Financial reported an unexpected spike in its credit card charge-off rates:  Rising Credit Card Defaults.   As I’ve detailed in prior posts, auto loan delinquencies and defaults are beginning to accelerate.  I’ve covered a couple of credit and credit-related companies in my Short Seller’s Journal , one of which is down 18% since I featured it on March 20th. This is a remarkable fact given that the S&P 500 is up 1.5% in the same time-frame.   When the stock market rolls over, this stock will drop at least 50%.

Although the latest retail sales report last week showed a small gain month over month, the unexpected gain was fueled almost entirely by the rise in gasoline prices.   The Government CPI report does not show much inflation, because the Government goes out of its way to not measure inflation.

The Government’s methodologies used to hide real inflation have been dissected ad nauseum by this blog and many others over the years.  Instead, I wanted to share a write-up a friend and colleague of mine sent me which elegantly describes the truth about inflation and Obamacare and the affect both are having on the average American household:

There’s a huge disconnect between the Government CPI report and true inflation. May wholesale gas prices were flat while the Commerce Dept reported that May gasoline sales for retail sales purposes went up 2.1%. Implies 2% usage higher which might tie in with how, with lower gas prices earlier this year there was the shift to the lower mileage bigger vehicles, or could be more driving.

However, April gas prices according to CPI were up 8.1% but wholesale prices were up more like 14% in April. So the CPI price increase is 57% of the futures price increase. Apply the “lower inflation” to revenues driven by inflation and that’s how GDP gets overstated.

There a lot of moving pieces in the data charade. CPI is reported later this week (June 16th) and it will be interesting to see whats reported for gas. I looked at this a few years ago and found stark inconsistencies between the price level used by the Government in its CPI index vs wholesale gas prices, which are futures based.

The other issue is in food. This is where the CPI index substitution comes into play that John Williams (Shadowstats.com) talks about. My own index includes “outside skirt steak” which is approaching $20 a pound, where I used to pay $5-7 a pound a few years back. So we actually bought/substituted rib eyes at 10 bucks a pound. From an inflation perspective, if that got into the counting, I reduced my inflation by 50% (we later bought hamburger meat at Sams for 2.79 a pound so in the month we cut out our personal CPI on meat by 85%-although we moved to lower quality products). Another issue was cereal–which I used to buy regularly at Walmart early this year at $2.50 a box and it’s now $3.30 a box (32% price inflation).

So, what’s the point?

The point is that there is getting to be some serious inflation in food and somehow its not showing up in the Govt data. In addition, with all the variability with sales and type of stores and how the GDP, Jobs or CPI surveys are created–less than scientific, the government can drive whatever reporting outcome it wants and it’s virtually impossible for anybody to follow.

Regardless of how gasoline pricing is showing up for various Govt reports, between the higher cost of gas and food, and lower earnings in general, people are getting more and more stretched especially as healthcare, education and housing costs go much higher.

This latest retail sales report did confirm home improvement is now declining (big ticket items and durable goods), which had been one of the few bright spots in retail. I am also guessing that there is a shift in overall spending to necessities. The huge increases in Healthcare premiums is pretty significant for a family along with co-pays and deductibles. Practically speaking the middle class is getting attacked. There are not enough ultra-high income earners who can carry the economy.

The S&P 500 made another failed run at an all-time high earlier this month.  If the Fed was not aggressively preventing any down-side momentum from gripping the stock market, there would like be a stock market crash.

The U.S. financial and economic system is inching toward an abyss that is much deeper and darker than the abyss into which it plunged in 2008.

 

END

 

And for your enjoyment:

 

Clinton Foundation “Hacked By Russians”, “Foundation Vulnerabilities” Document Leaked

Moments ago the newswires lit up with news that the Clinton Foundation  was among the organizations breached by suspected Russian hackers in a dragnet of the U.S. political apparatus ahead of the Nov. election, Bloomberg reports. 

  • CLINTON FOUNDATION SAID TO BE BREACHED BY RUSSIAN HACKERS

As Bloomberg adds, the attacks on the foundation’s network, as well as those of the Democratic Party and Hillary Clinton’s presidential campaign, compound concerns about her digital security even as the FBI continues to investigate her use of a personal e-mail server while she was secretary of state.

A spokesman for the foundation, Brian Cookstra, said he wasn’t aware of any breach. The compromise of the foundation’s computers was first identified by government investigators as recently as last week, the people familiar with the matter said. Agents monitor servers used by hackers to communicate with their targets, giving them a back channel view of attacks, often even before the victims detect them.

That’s the official version, and one which accurately focuses on the porous security at both the DNC and Clinton Foundation servers.

What really happened is that earlier today, the infamous hacker Guccifer2 – who as we reported previously, revealed himself as the individual who penetrated the DNC server (which was also blamed on Russian hackers) and revealed to the world the DNC’s “attack files” on Donald Trump, among others, including the Clinton mega donors – released another data dump which he titled as the “Dossier on Hillary Clinton from DNC.

View image on Twitter

is-deciderHtmlWhitespace" cite="https://twitter.com/GUCCIFER_2/status/745255818614968320">

GUCCIFER 2.0 @GUCCIFER_2

Dossier onhttps://guccifer2.wordpress.com/2016/06/21/hillary-clinton …

10:03 AM – 21 Jun 2016

In the post he says the following:

This’s time to keep my word and here’re the docs I promised you.

 

It’s not a report in one file, it’s a big folder of docs devoted to Hillary Clinton that I found on the DNC server.

 

The DNC collected all info about the attacks on Hillary Clinton and
prepared the ways of her defense, memos, etc., including the most
sensitive issues like email hacks.

 

As an example here’re some files:

 

2016er Attacks – HRC Defense Master Doc [updated]

04.29.15 CGEP

2016 Democrats Positions Cheat Sheet 7-7-15

20150426 MEMO- Clinton Cash Unravels

Attacks on Clinton Family Members

Clinton Foundation Donors $25K+

Clinton Foundation Vulnerabilities Master Doc FINAL

Clintons PFD 2015

HRC Defense – Emails

HRC Travel – Private Jets FINAL

MEMO — Clinton Cash Claims (2)

Most notable among these files is the file called “Clinton Foundation Vulnerabilities Master Doc FINAL”which, as the title implies, is an extensive 42-page summary of how the Clinton Foundation views its biggest vulnerabilities based on mentions, references and attacks from the press.

Here are some of the section titles:

  • THE CLINTON FOUNDATION RECEIVED DONATIONS FROM INDIVIDUALS TIED TO SAUDI ARABIA WHILE CLINTON SERVED AS SECRETARY OF STATE
  • AN EMBATTLED BUSINESSMAN WITH “TIES TO BAHRAIN’S STATE-OWNED ALUMINUM COMPANY” GAVE BETWEEN $1 MILLION AND $5 MILLION TO THE CLINTON FOUNDATION
  • A VENEZUELAN MEDIA MOGUL WHO WAS ACTIVE IN VENEZUELAN POLITICS DONATED TO THE CLINTON FOUNDATION DURING CLINTON’S TENURE AS SECRETARY OF STATE
  • GERMAN INVESTOR WHO HAS LOBBIED CHANCELLOR MERKEL’S ADMINISTRATION GAVE BETWEEN $1 MILLION AND $5 MILLION TO THE CLINTON FOUNDATION, SOME OF WHICH WAS DURING MRS. CLINTON’S TENURE AT THE STATE DEPARTMENT
  • THE CEO OF AN AMSTERDAM BASED ENERGY COMPANY DONATED AT LEAST $1 MILLION TO THE CLINTON FOUNDATION AND LATER ANNOUNCED AT THE 2009 CGI MEETING A $5 BILLION PROJECT TO DEVELOP ENVIRONMENTALLY FRIENDLY POWER GENERATION IN INDIA AND CHINA
  • INDIAN POLITICIAN AMAR SINGH, WHO HAD DONATED AT LEAST $1 MILLION TO THE CLINTON FOUNDATION, MET WITH HILLARY CLINTON IN SEPTEMBER 2008 TO DISCUSS AN INDIA-U.S. CIVIL NUCLEAR AGREEMENT
  • THE CLINTON FOUNDATION RECEIVED ADDITIONAL DONATIONS FROM INDIAN BUSINESS INTERESTS PRIOR TO HER BECOMING SECRETARY OF STATE
  • BILLIONAIRE STEEL EXECUTIVE AND MEMBER OF THE FOREIGN INVESTMENT COUNCIL IN KAZAKHSTAN LAKSHMI MITTAL GAVE $1 MILLION TO $5 MILLION TO THE CLINTON FOUNDATION BEFORE CLINTON BECAME SECRETARY OF STATE
  • SOON AFTER SECRETARY CLINTON LEFT THE STATE DEPARTMENT, THE CLINTON
    FOUNDATION “RECEIVED A LARGE DONATION FROM A CONGLOMERATE RUN BY A
    MEMBER OF CHINA’S NATIONAL PEOPLE’S CONGRESS”
  • …AND THE CLINTON FOUNDATION DEFENDED ITS PARTNERSHIPS WITH BOTH FOREIGN AND DOMESTIC CORPORATE INTERESTS
  • POWERFUL AND CONTROVERSIAL CORPORATE INTERESTS BASED IN THE U.S. ALSO DONATED TO THE CLINTON FOUNDATION
  • AMONG THE CLINTON FOUNDATION DONORS REVEALED IN 2009 WERE SEVERAL FOREIGN GOVERNMENTS WHO HAD GIVEN MILLIONS OF DOLLARS
  • WHEN HILLARY CLINTON BECAME SECRETARY OF STATE IN 2009, BILL CLINTON AGREED TO STOP ACCEPTING CONTRIBUTIONS TO THE CLINTON FOUNDATION FROM MOST FOREIGN COUNTRIES
  • IN THE PAST, SOME OBSERVERS HAD LINKED FOREIGN GOVERNMENT DONATIONS TO THE CLINTON FOUNDATION AND SECRETARY CLINTON’S WORK AT THE STATE DEPARTMENT
  • THE CLINTON FOUNDATION CAME UNDER INTENSE SCRUTINY IN FEBRUARY 2015 WHEN IT WAS REVEALED THAT THE FOUNDATION HAD ACCEPTED DONATIONS FROM FOREIGN GOVERNMENTS AFTER SECRETARY CLINTON LEFT THE STATE DEPARTMENT
  • THE WALL STREET JOURNAL TIED FOREIGN GOVERNMENT DONORS TO THE CLINTON FOUNDATION’S ENDOWMENT FUNDRAISING UNDER SECRETARY CLINTON
  • CLINTON FOUNDATION ANNOUNCED THAT SHOULD HILLARY CLINTON DECIDE TO RUN FOR PRESIDENT, THE FOUNDATION WOULD FOLLOW APPROPRIATE PROCEDURES FOR ACCEPTING DONATIONS FROM FOREIGN DONATIONS, JUST LIKE IT HAD HAD UNDER SECRETARY CLINTON…
  • REPORTS THAT STATE DEPARTMENT LAWYERS DID NOT EXHAUSTIVELY VET BILL CLINTON’S PAID SPEECHES DURING SECRETARY CLINTON’S TENURE RAISED QUESTIONS ABOUT THE ROLE CLINTON FOUNDATION DONATIONS MAY HAVE PLAYED IN ORGANIZING THOSE SPEECHES
  • SOME CONSERVATIVES USED THE FOREIGN DONATIONS CONTROVERSY TO IMPLY THAT THE CLINTON FOUNDATION IS NOT A CHARITY AND QUESTION THE FOUNDATION’S CHARITABLE WORK
  • THE CLINTON FOUNDATION HAS ACCEPTED DONATIONS FROM INDIVIDUALS, SOME OF WHOM HAD TIES TO FOREIGN GOVERNMENTS, DURING HER TENURE AS SECRETARY OF STATE
  • THE CLINTON FOUNDATION RECEIVED MONEY FROM A FOUNDATION FORMED BY FORMER UKRAINIAN PARLIAMENT MEMBER VICTOR PINCHUK
  • WALL STREET JOURNAL COLUMNIST MARY O’GRADY CITED A CONTRACT BETWEEN TWO CLINTON DONORS FOR HAITI AID AS EVIDENCE OF A CONFLICT OF INTEREST FOR THE CLINTONS

There is much more in the full document presented below (link).

* * *

One important thing to note: according to an interview that Motherboard conducted with Guccifer2 on Tuesday, the hacker makes it clear he is not Russian. He is, in fact, from Romania, just like the Original Guccifer.

“I’m a hacker, manager, philosopher, women lover,” Guccifer 2.0 told Motherboard on Tuesday in a Twitter chat. “I also like Gucci! I bring the light to people. I’m a freedom fighter! So u can choose what u like!”

 

The hacker, who claimed to have chosen the name in reference to the notorious hacker who leaked the George W. Bush paintings and claims to have hacked Hillary Clinton’s email server, denied working for the Russian government, as several experts believe.

 

“I don’t like Russians and their foreign policy. I hate being attributed to Russia,” he said, adding that he was from Romania, just like the first Guccifer.

When asked to explain how he hacked into the DNC in Romanian, “he seemed to stall us, and said he didn’t want to “waste” his time doing that. The few short sentences he sent in Romanian were filled with mistakes, according to several Romanian native speakers.”

The hacker said he left Russian metadata in the leaked documents as his personal ”watermark.” He also said he got kicked out of the network on June 12, when the DNC “rebooted their system.”

 

A senior DNC official said in an emailed statement that “our experts are confident in their assessment that the Russian government hackers were the actors responsible for the breach detected in April, and we believe that the subsequent release and the claims around it may be a part of a disinformation campaign by the Russians.”

 

Guccifer 2.0 also said the DNC isn’t the only victim of his hacks, but declined to name any others because “my safety depends on it.”

It appears the Clinton Foundation was one of the other hacks.

Finally, when asked why he targeted the DNC, “Guccifer 2.0 said he simply did it to follow the lead of Marcel Lazar, the original Guccifer, and that he doesn’t “care at all” about Donald Trump. The hacker declined to say whether he knew him personally, “cause I care for Marcel.” “I think we must fight for freedom of minds,” he wrote. “Fight for the world without Illuminati.”

Good luck.

* * *

So while we are going through the full data dump (found here), here is the leaked document revealing the “Clinton Foundation’s Vulnerabilities.”

 

end

Well that about does it for tonight

I was out of the loop for most of the afternoon but I am just catching up what I missed

I will see you tomorrow night

h

 


June 20/Brokers raise gold/silver margins and thus a reason today for gold and silver’s initial fall: however both recover during the day/Rome has an anti-establishment, anti Euro Mayor elected yesterday/Nigeria has now entered hyperinflation as the...

Mon, 06/20/2016 - 14:58

Good evening Ladies and Gentlemen:

Gold:  $1,290.00 DOWN $2.50    (comex closing time)

Silver 17.50  up 10 cents

In the access market 5:15 pm

Gold: 1289.90

Silver: 1751.

 

The June gold contract is an active contract. Last  night we had a poor sized 15 notices filed Fri night, for 1500 oz to be served upon Monday.  The total number of notices filed in the first 13 days is enormous at 15,156 for 1,515,600 oz.  (47.14 tonnes)

ii) in silver we had 80 notices filed for 400,000 oz..  Total number of notices served  in the 13 days:  489 for 2,445,000 oz

 

Today, both gold and silver held another vicious attack.  The bankers called on their broker friends to raise margin levels on gold and silver contracts and their excuse was the volatile conditions because of the British vote on whether to leave the EU or not.

Thus silver’s gain of 10 cents is quite extraordinary along with the big recovery in the price of gold. This is very bullish for us>

 

 

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 274.57 tonnes for a loss of 28 tonnes over that period

 

In silver, the total open interest ROSE by 3032 contracts UP to 205,342 DESPITE THE FACT THAT THE PRICE OF SILVER WAS down by 19 cents with respect to FRIDAY’S trading. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.026 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia &ex China)

In silver we had 80 notices served upon for 400,000 oz.

In gold, the total comex gold OI ROSE by a CONSIDERABLE 7,231 contracts UP to 581,964 even though the price of gold was DOWN $3.60 with FRIDAY’S trading (at comex closing)  I expected a much higher OI in gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

 GLD

Good activity  today:

We had one deposit:

 

this afternoon: 0.890 tonnes

Total gold inventory: 908.77 tonnes

 

 SLV

THIS MAKES NO SENSE!!

We had A HUGE WITHDRAWAL FROM  inventory  to the tune of 2.852 million oz; silver inventory tonight  rests  at 334.495 million oz.  If they did have some physical silver that inventory was used to ship to China which has been massively importing silver..

Both the GLD and SLV are massive frauds as they have no metal behind them!

.

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

1. Today, we had the open interest in silver ROSE by 3,032 contracts up to 205,342 despite the fact that the price of silver was DOWN 19 cents with FRIDAY’S trading. The gold open interest ROSE by a considerable 7,231 contracts UP to 581,964 despite the fact that the price of gold was DOWN $3.60  ON FRIDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 3.70 POINTS OR 0.13% / /Hang Sang closed UP 340.22 OR 1.68%. The Nikkei closed UP 365.64 POINTS OR 2.34% Australia’s all ordinaires  CLOSED UP 1.66% Chinese yuan (ONSHORE) closed UP at 6.5825 /Oil ROSE to 48.74 dollars per barrel for WTI and 50.08 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5903 yuan to the dollar vs 6.5825 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT 

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN

none today

b) REPORT ON CHINA  none today 4. EUROPEAN AFFAIRS

i)Voters show displeasure with establishment as anit-establishment 5 star movement has won a key mayoral race in Rome, with Virginia Raggi the new mayor of the city:

( zero hedge)

 

ii)Citibank is stunned by today’s move in the GBP/USA up to close to 1.48. Tje move is already at the extreme print level thought by Citibank  that if the BREMAIN wins, then the highest they thought the pound would rise to is 1.48.  The author is stunned by the continual rise in the Yen.  He is surprised by the rise in gold today and the rise in the Cdn dollar.  The Brexit decision is far from over: yet the entire fear of the market has been removed!

( zero hedge)

 

iii)trading from Europe today:  all green!

( zero hedge)

iv)The real truth behind the BREXIT debate:

(  Meijer/Automatic Earth Blog) v)Then at 1:30 pm est Cable  (short form for GBP/USA) snapped! It fell to 14637, over 100 basis points lower from its zenith!

(courtesy zero hedge) vi) Then late this evening: Cable dumps on latest poll showing the leaves out in front by 2 percentage points

(courtesy zero hedge) 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS none today 6.GLOBAL ISSUES

i)Finally, we have a strong NATO alliance member (Germany) official Steinmeier  slams NATO’s warmongering against Russian:

( zero hedge)

ii)Nigeria’s currency plunges 30% overnight despite oil rising. The country is trying to use capital controls to stem the loss of USA dollars but it is of no use.  These guys are heading for hyperinflation!

( zero hedge)

7.OIL ISSUES

none today

8.EMERGING MARKETS

Of all the central banks in the world to break into, this doorknob broke into Venezuela’s Central bank and no doubt he will find that everything has been looted.

At least in prison he will get 3 meals and a bed:

( zero hedge)

9. PHYSICAL STORIES

i)A very important conversation with Andrew Maguire and Eric King.  Andrew is claiming that the physical gold market is playing havoc to our synthetic paper shorters. As london is running out of physical gold/silver as these precious metals are being shipped to London, he strongly believes that the paper price will rise exponentially to reach the real true level.

( Andrew Maguire/Kingworldnews)

ii)Stephen Leeb tells Kingworldnews that China continues to not only stockpile base metals but also huge supplies of silver and gold.

( Stephen Leeb/Kingworld news)

 

iii)Bill Holter and Jim Sinclair interviewed by Greg Hunter of USA Watchdog.  Please watch, post or forward if you wish.  Thanks,  Bill

Jim Sinclair-Biggest Bubble in the History of Finance iv)Interesting;  Americans top the Indians as top silver purchases of bulllion:(courtesy SRSRocco report)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)Bellwether Caterpillar retail’s sales continue to decline.  This time for the 42nd consecutive month.  Global demand for good is simply awful:

( Caterpillar/zero hedge)

 

ii)Michael Snyder writes that the Republicans are now trying to change the rules at the convention to unbind the delegates so that they can vote for someone other than Trump:

( Michael Snyder)

 

iii)Lake Mead levels are now at record lows at 1072 feet.  You will recall me stating to you that 1075 is the level once breached would cause the authorities to issue cutbacks in Arizona and Nevada, but not yet California.   Lake Mead which receives its water from the Colorado River has been drying up for years.

( zero hedge) Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 581,954 for a  gain of 7,231 contracts despite the fact that THE PRICE OF GOLD WAS DOWN $3.60 with respect to FRIDAY’S TRADING. .WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR THAT IS JUNE, A VERY ACTIVE MONTH. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH..  IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 656 for a loss of 80 contracts. We had 4 notices filed ON FRIDAY, so we lost 76 contracts or 7600 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a GOOD SIZED 201 contracts up to 4,784.This no doubt will be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI ROSE by 1,441 contracts UP to 423,847. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was GOOD at 243,174. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was GOOD at 236,661 contracts. The comex is not in backwardation.

Today we had 15 notices filed for 1500 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by 3,032 contracts from 202,310 UP to 205,342 despite the fact that  the price of silver was DOWN BY  19 cents with FRIDAY’S TRADING. The front month of June saw it’s OI FALL by 207 contracts DOWN TO  133. We had 207 notices filed ON FRIDAY , so we neither GAINED nor lost any contracts standing for this non active June contract month. The next big delivery month is July and here the OI ROSE BY 412 contracts UP to 90,784. We have LESS THAN two weeks to go before first day notice. The volume on the comex today (just comex) came in at 66,304 which IS HUGE. The confirmed volume YESTERDAY (comex + globex) was HUGE at 80,901. Silver is not in backwardation . London is in backwardation for several months.   We had 80 notices filed for 400,000 oz.  

JUNE contract month:

INITIAL standings for JUNE

June 20. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  557.15 OZ

DELAWARE

MANFRA

SCOTIA

INCL 2 KILOBARS Deposits to the Dealer Inventory in oz NIL Deposits to the Customer Inventory, in oz   16,075.000 OZ

500 KILOBARS

SCOTIA No of oz served (contracts) today 15 contracts
(1500 oz) No of oz to be served (notices) 641 contracts

64,100 oz Total monthly oz gold served (contracts) so far this month 15,156 contracts (1,515,600 oz)

(47.141 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  150,442.8 OZ

Today we had 0 dealer DEPOSITS

total dealer deposit:  NIL  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposit:

Total customer deposits; NIL   OZ

Today we had 3 customer withdrawals:

i) out of Delaware; 95.59 oz

ii) Out of Manfra: 64.30 oz  or 2 kilobars

iii) Out of Scotia; 397.26 oz

total customer withdrawals:  557.15 oz

Today we had 0 adjustments:

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 4 contracts of which 1 notices was stopped (received) by JPMorgan dealer and 3 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,156) x 100 oz  or 1,515,600 oz , to which we  add the difference between the open interest for the front month of JUNE (656 CONTRACTS) minus the number of notices served upon today (15) x 100 oz   x 100 oz per contract equals 1,579,700 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.    Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,156) x 100 oz  or ounces + {OI for the front month (656) minus the number of  notices served upon today (15) x 100 oz which equals 1,579,700 oz standing in this   active delivery month of JUNE (49.135 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.135 TONNES) . WE LOST 76 contracts or an additional 7600 oz will not stand for GOLD in this June delivery month. The CME must have been very busy trying to coax some of our remaining longs to accept fiat. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 49.135 tonnes of gold standing for JUNE and 53.655 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.135 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008  = 65.758 tonnes still standing against 53.05 tonnes available.  Total dealer inventor 1,705,727.692 tonnes or 53.655 tonnes Total gold inventory (dealer and customer) =8,827,653.821 or 274.57 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.57 tonnes for a loss of 28 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!    end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 20.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  186,226.961  oz

BRINKS, CNT

HSBC,Scotia Deposits to the Dealer Inventory 400,278.910 oz

CNT Deposits to the Customer Inventory  804,217.770  oz

JPM, CNT No of oz served today (contracts) 80 CONTRACTS 

(400,000 OZ) No of oz to be served (notices) 53 contracts

265,000 oz Total monthly oz silver served (contracts) 489 contracts (2,445,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  20,357,560.6 oz

today we had 1 deposit into the dealer account

i) Into CNT:  400,278.910 oz

total dealer deposit:400,278.910 oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 2 customer deposits:

i) Into JPMorgan:  604,630.300 oz

ii) Into CNT:  199,587.470 oz

Total customer deposits: 186,226.961  oz.

We had 4 customer withdrawals

i) Out of Brinks:  57,260.85 oz

ii) Out of CNT:  39726.841 oz

iii) Out of HSBC: 29,183.600 oz

iv) Out of Scotia; 60,055.67 oz

:

total customer withdrawals:  186,266.961  oz

   

 

 we had 1 adjustment

i) Out of Scotia:  20,959.42 oz was adjusted out of the customer account and this landed into the dealer account of Scotia:

 

The total number of notices filed today for the JUNE contract month is represented by 80 contracts for 400,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (489) x 5,000 oz  = 2,445,000 oz to which we add the difference between the open interest for the front month of JUNE (133) and the number of notices served upon today (80) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  489 (notices served so far)x 5000 oz +{133 OI for front month of JUNE ) -number of notices served upon today (80)x 5000 oz  equals  2,710,000 of silver standing for the JUNE contract month. We  neither gained nor lost any silver ounces standing in this non active d   Total dealer silver:  23.941 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   151.061 million oz The total open interest on silver is NOW moving closer to its all time high with the record of 207,394 being set May 18.2016. The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. end And now the Gold inventory at the GLD June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory. rests at 908.77 tonnes. June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

June 20.:  inventory rests tonight at 908.77 tonnes

end

 

Now the SLV Inventory June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 20.2016: Inventory 334.495 million oz end This has been confirmed:

R.J. O’Brien broker called Mr XX about 2 pm or so, said the margin per gold contract was doubling, effective close of biz this coming Monday, from $4950 per contract to $9900 per contract. [I didn’t think to ask about silver, was so stunned]. Broker said something about the Brexit vote this coming Thursday, and effect on gold.

 

end

 

They  must be in trouble as this was confirmed

(courtesy Reuters)

 

The Reuters story:

 

INTL FCStone hikes gold, silver margins on Brexit nerves NEW YORK | BY MARCY NICHOLSON AND JOSEPHINE MASON Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015. REUTERS/NEIL HALL/FILE PHOTO

INTL FCStone Inc has hiked the amount of cash customers have to deposit with them to trade gold, silver and sterling futures, a relatively rare step that shows financial firms are bracing for volatile trading ahead of Britain’s vote on Europe.

In a letter to customers seen by Reuters, the U.S. based mid-sized commodities and forex brokerage said it will charge customers 200 percent of the minimum margin set by CME Group Inc for cleared futures for gold, silver, the British pound and euro currency. It was effective on June 16.

Worries about volatile currency markets have become more common since the dramatic moves in the Swiss franc in January 2015, which led to conflicts between banks and their clients due to the absence of market prices for several minutes.

“Increased volatility requires us to take prudent action to protect our clients from increased market fluctuations,” said Group Treasurer Bruce Fields.

“We believe this is in line with what other market participants are doing.”

In recent weeks, PhillipCapital UK and Saxo Bank have hiked in currency-related margins in the run-up to a British vote on membership next Thursday.

But it is relatively unusual for banks and brokers to charge additional margin for precious metals customers, traders said, illustrating how growing concern about the outcome of the vote and the potential for sharp one-off price moves has extended into commodities markets.

The outcome of the vote is seen as increasingly hard to predict.

Exchange margins are based on historic volatility, so the broker adjusted for current or expected market conditions, Fields said.

If other companies follow suit, the additional financial burden on precious metal investors could curb liquidity and roil markets further.

“This move could force some existing positions to liquidate or move elsewhere, which is not something that would be done lightly,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

UK shoppers have flocked to the safe-haven metal fearing the country will vote to leave the union, boosting demand for bullion bars and coins.

Bullion prices soared to fresh two-year highs of $1,315 per ounce on Thursday after the U.S. Federal Reserve indicated it would be less aggressive in tightening monetary policy next year.

Speculative investors are holding their biggest bullish position in gold futures in nearly five years, data on Friday showed.

Based on CME’s initial margins, an INTL FCStone customer would have to fork out a whopping $9,900 to trade one contract of gold and $10,560 for one lot of silver. One lot equates to 100 ounces of gold, worth about $130,000, and 5,000 ounces of silver, worth $87,000.

Margins are charged to ensure customers can meet their obligations.

end

NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 1.0 percent to NAV usa funds and Negative 1.2% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 61.2% Percentage of fund in silver:37.5% cash .+1.3%( June 20/2016). / 2. Sprott silver fund (PSLV): Premium RISES  to -0.04%!!!! NAV (June 20/2016)  3. Sprott gold fund (PHYS): premium to NAV  RISES TO +1.53% to NAV  ( June 20/2016) Note: Sprott silver trust back  into NEGATIVE territory at -04% /Sprott physical gold trust is back into positive territory at +1.53%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,FRIDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) What Brexit Could Mean For Your Money and Your Business

By Mark O’ByrneJune 20, 20160 Comments

Gold fell 1.3 % in dollar terms and 3% in sterling terms today as sterling and global stocks surged as Brexit worries ease slightly.

Gold in GBP – 30 Days

The prospect of Britain leaving the EU is causing widespread jitters. ‘What will it really mean?’  was examined by Emma Kennedy, the Personal Finance Editor of the  Sunday Business Post yesterday (excerpts follow):

“With less than a week to go until British voters decide on the future of their country’s relationship with Europe, investors and markets are very jittery indeed.

In this climate, gold, a traditional safe haven for investors, has soared.

Demand for gold could rise further if Britain exits the European Union.

“There’s been record demand for gold in the first quarter,” particularly from institutional investors, said Mark O’Byrne, research director at Goldcore.

“The big investment houses, the hedge funds, the likes of Munich Re and Blackrock” are all taking an interest in gold, according to O’Byrne.

He believes that gold will “fall back” if British voters decide to remain within the EU. In this scenario, he also predicts a “relief rally” as stock markets bounce back after the pre-vote jitters. “The fast money will liquidate,” he said, indicating that some investors would move away from gold.

“If they do vote to leave though, gold will rise,” he predicted. “Gold thrives in that uncertain environment. It is largely inversely correlated to other asset classes.”

However, O’Byrne believes that, whatever way the vote goes, the fundamentals of gold are “very strong”.

“One of the big negatives often discussed in relation to gold was that it ‘doesn’t yield anything’, but many bonds have negative yields now,” he said. This is something he sees as a big factor for investors considering an allocation to gold within their portfolio.

In O’Byrne’s view, investors need to look beyond June 23. “Brexit is a short-term thing,” he said. “But there are bigger global factors too: negative interest rates, the scale of geopolitical risk.”

On those risks, a few things will affect investors in the months to come, according to O’Byrne. “The rise of Trump, the polarisation of politics globally,” he said. “A lot of our clients are worried about the ramifications of the US election. A lot of people are nervous about equities and bonds.”

A rise in risk aversion is also good news for deposit takers. However, a flight to cash is a tricky choice for investors, given the low interest rate environment.

In a Brexit scenario, some asset classes – and some geographies – will perform better than others, experts say.

If Britain votes to leave, BlackRock’s Turnill said “the assets you want are ones that benefit from a risk-off – like gold, potentially areas like long-dated US treasuries”.

See full article in Sunday Business Post here

Gold and Silver News
Gold eases in Asia as weekend Brexit polls head ‘Remain’ way (Investing.com)
Gold slides 1 percent as Brexit worries ease slightly (Reuters)
INTL FCStone hikes gold, silver margins on Brexit nerves in a relatively rare step (Reuters)
Uncertainties of Brexit making gold attractive as safe asset (Straits Times)
Brexit Alarms Propel Gold Investors to Near Record Rally Wagers (Bloomberg)

What Brexit could mean for your money and your business (Business Post)
Why the Fed Can’t Stop the Runaway Bull Market in Gold (Casey Research)
Central Bank Market Intervention Shows Redundancy Of Technical Analysis (GATA)
Groupthink Of Official Ireland On BREXIT (McWilliams)
Europeans are scooping up gold on Brexit fears (Business Insider)
Read More Here


Gold Prices (LBMA AM)

20 June: USD 1,283.25, EUR 1,132.08 and GBP 877.49 per ounce
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce
14 June: USD 1,279.40, EUR 1,140.84 and GBP 904.79 per ounce
13 June: USD 1,284.10, EUR 1,139.25 and GBP 909.27 per ounce
10 June: USD 1,266.60, EUR 1,121.07 and GBP 876.87 per ounce

Silver Prices (LBMA)
20 June: USD 17.34, EUR 15.30 and GBP 11.85 per ounce
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce
13 June: USD 17.32, EUR 15.37 and GBP 12.23 per ounce
10 June: USD 17.32, EUR 15.33 and GBP 12.01 per ounce

 

Recent Market Updates
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

 

Mark O’Byrne Executive Director

END

 

A very important conversation with Andrew Maguire and Eric King.  Andrew is claiming that the physical gold market is playing havoc to our synthetic paper shorters. As london is running out of physical gold/silver as these precious metals are being shipped to London, he strongly believes that the paper price will rise exponentially to reach the real true level.

 

(courtesy Andrew Maguire/Kingworldnews)

 

Long-term investment interest in gold is making trouble, Maguire says

Submitted by cpowell on Fri, 2016-06-17 18:43. Section:

2:43p ET Friday, June 17, 2016

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire tells King World News today that long-term investment interest in gold is increasing, making trouble for the “usual price-suppression schemes.” His comments are excerpted at KWN here:

http://kingworldnews.com/alert-whistleblower-maguire-says-massive-stampe…

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

 

end

 

Stephen Leeb tells Kingworldnews that China continues to not only stockpile base metals but also huge supplies of silver and gold.

(courtesy Stephen Leeb/Kingworld news)

 

Fear of crash in China arises from that government’s own deception, Leeb tells KWN

Submitted by cpowell on Sun, 2016-06-19 02:17. Section:

10:15p ET Saturday, June 18, 2016

Dear Friend of GATA and Gold:

Fund manager Stephen Leeb tells King World News that fear of an economic crash in China arises from deception concocted by the Chinese government itself and that the country, with 1.5 billion people expecting a higher standard of living, continues to need not just commodities but the monetary metals as well. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/alert-china-now-stockpiling-massive-amounts-of-…

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

 

end

 

Interesting;  Americans top the Indians as top silver purchases of bulllion:

(courtesy SRSRocco report)

 

Americans Are Now The Top Silver Investors In The World

by on June 20, 2016

According to the figures in the 2016 World Silver Survey, Americans now lead the world in physical silver investment.  This is quite an interesting change as India has been the number one market for silver bar demand in the past.

For example, Indians purchased more than 100 million oz (Moz) of silver bar in 2008 of the approximate world total of 125 Moz.  However, silver bar demand is only one segment of total global physical silver investment.  There is also Official Coin demand.

If we look at the data for 2015, India continues to rank as the largest source of silver bar investment int he world:

India purchased 82.5 Moz of silver bar in 2015 while the U.S. ranked second with 51.8 Moz, Europe came in third with 12.7 Moz and China placed last at 3.8 Moz. (2016 World Silver Survey, pg. 22 & 23).

The United States experienced a huge increase in silver bar demand in 2015 due to the inclusion of “Private rounds and bars” now in the data.  So, all private silver bar and rounds sold are lumped into the Silver Bar category.

Even though India ranked first place when it comes to silver bar demand, if we include Official Coin sales, the U.S. is now the global leader of physical silver investment:

In 2015, the U.S. Mint sold 48.6 Moz of Official Silver coins while India ranked fifth at 8.9 Moz.  If we add silver bar demand to these figures, the U.S. was the leader at 100.4 Moz while India came in second at 91.4 Moz. (2016 World Silver Survey, pg. 25).  The rest of the world accounted for the remaining 100.5 Moz of the total 292.3 Moz of Silver Bar & Coin demand.

I could not break down Silver Bar & Coin demand in the ‘Rest of World” category because there isn’t enough data.  The World Silver Survey’s do a much better job than the CPM Group’s Silver Yearbook in reporting silver investment figures.  However, they only publish the amount of Silver Coins sold by each of the Official mints, not the actual demand.

There is no way of knowing how many U.S. Silver Eagles end up in foreign hands, or how many Canadian Maples or Australian Kangaroos are purchased by Americans.  The data is not that accurate.  However, I do believe Indians purchased the overwhelming majority of their own Official Silver coins.

Furthermore, the Silver Bar & Coin demand of 100.4 Moz for the United States may be quite conservative.  Why?  Because, I believe Americans buy a heck of a lot more foreign Official Silver Coins to more than make up for the amount of U.S. Silver Eagles exported abroad.  We must remember, Americans don’t have to pay a vat tax when they buy silver.

What is also interesting about the data is that China ranked fourth behind Europe in silver bar demand.  Even if we assume that the Chinese purchased all of their Official Silver coin sales of 10.7 Moz in 2015, their total Silver Bar & Coin demand would only be 14.5 Moz.  While the Chinese are the biggest buyers of gold in the world, silver still hasn’t caught on as it has in the U.S. or India.

Lastly, according to the data from the 2016 World Silver Survey, Indians purchase their silver bar as a short-term investment vehicle by taking advantage of lower prices or to profit from any differences in the spot or futures market.  However, the majority of Americans purchase their silver for a long term BUY & HOLD strategy.

Which means as the Chinese consume most of the gold in the world, Americans are now the biggest silver investors.

-END-

Bill Holter and Jim Sinclair interviewed by Greg Hunter of USA Watchdog.  Please watch, post or forward if you wish.  Thanks,  Bill Jim Sinclair-Biggest Bubble in the History of Finance Jim Sinclair-Biggest Bubble in the History of Finance end Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

:

1 Chinese yuan vs USA dollar/yuan  UP to 6.5825 ( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.59030) / Shanghai bourse  UP 3.70 OR 0.13%   / HANG SANG CLOSED UP 240.22 OR 1.68%

2 Nikkei closed UP 365.64 OR 2.34% /USA: YEN RISES  TO 104.59

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 93.68/Euro UP to 1.1320

3b Japan 10 year bond yield: RISES  TO -.1450%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.25

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  48.74  and Brent: 50.08

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to +050%   German bunds BASICALLY negative yields from  9 years out

 Greece  sees its 2 year rate FALL to 9.13%/: 

3j Greek 10 year bond yield FALL to  : 7.820%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1279.80/silver $17.34(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 72 in  roubles/dollar) 64.02-

3m oil into the 48 dollar handle for WTI and 50 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.25 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9597 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0871 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU NEW POLLS INDICATES A SWING TO THE BREMAIN.

3r the 9 Year German bund now NEGATIVE territory with the 10 year RISES to  + .050%

/German 9 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.668% early this morning. Thirty year rate  at 2.489% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Soar, Pound Surges Most Since 2008 As Brexit Odds Tumble

Pound sterling was trading at 1.405 on Thursday morning when a tragic event sent it soaring 600 pips higher, rising above 1.4660 in the following days. Whether the murder of Jo Cox was the catalyst that has turned around the outcome of the Brexit referendum is unclear, however it is certain that the moment when the news of her shooting and subsequent death hit is when cable was at it lows. Since then it has soared without looking back, as the momentum in the Leave camp has gone, replaced by a poll showing “Remain” leading by three percentage points before the referendum on Thursday.

As a result, as we showed last night, global equities and US futures rallied and the pound strengthened the most since 2008, soaring by 300 pips since the Friday close as polls signaled the campaign for the U.K to stay in the European Union was gaining momentum. Haven assets including the yen, U.S. Treasuries and gold slumped.

In short: global “risk on.”

The Stoxx Europe 600 Index surged by the most since February as the MSCI Asia Pacific Index advanced with S&P 500 futures. The yen fell for the first time in seven days. The naira slid 22 percent after Nigeria let the currency float freely, and India’s rupee sank to this month’s low after the central bank chief said he will be stepping down. Oil rallied with industrial metals as gold retreated from a five-month high.

With Leave ascendent going into Thursday, and with campaigning suspended into Saturday, this is what has happened since for those who missed it. There were four notable polls over the weekend. YouGov have compiled two which straddle Thursday’s campaign suspension. The first (Good Morning Britain – GMB) was compiled entirely before (15th-16th), and the second (Sunday Times – ST) saw a third of responses before (fieldwork spanned 16th and 17th). The GMB poll saw ‘leave’ 2 points in the lead, the ST poll had ‘remain’ 1 point in the lead. Both were online polls which compares to the 7% lead for ‘leave’ in their last online YouGov poll at the start of last week. So it could be said some momentum shift had occurred before Thursday’s campaign suspension but after it there seems to be further evidence.

The other two polls saw Opinium (for the Observer) see a 50/50 online survey split (fieldwork last Tues-Friday) and a Survation phone (fieldwork Friday-Saturday) poll giving the ‘remain’ side a 3% lead. This confirms the above trends.

In other words, what has shift the mood dramatically is just one poll taken since the killing and published over the weekend which showed 45% of voters backed the ‘Remain’ camp, while 42% were in favor of  Brexit — a turnaround from early last week when a slew of surveys put the latter group ahead.

The result of all of the above is shown in the chart below:

But does one poll determine the outcome of the referendum? Some are sceptical:  “We are seeing a risk-on move after the latest Brexit poll,” said Niv Dagan, executive director at Peak Asset Management LLC in Melbourne. “It may be short-lived and volatility is likely to remain high until Thursday’s vote. This really could still go either way.”

While polls suggest the final vote could still go either way, the bookies are far less ambiguous: odds at betting shops suggest there’s a 31% chance of Britons voting to pull out of the EU, down from a record 44% before Cox’s death, Oddschecker data show. The referendum is being watched by governments, central banks and investors around the world amid worries that a U.K. withdrawal from the 28-nation bloc could unleash a wave of turmoil across global markets.

For now, however, whether it is another massive short squeeze or a genuine elimination of Brexit as a concerns, global stocks have soared: the Stoxx Europe 600 Index climbed 2.9 percent as of 9:30 a.m. in London, after rallying 1.4 percent on Friday. Germany’s Dax was higher by 3.4% to just under 10,000.  The MSCI Asia Pacific Index rose 1.7 percent, led by gains in raw-materials producers and energy stocks. BHP Billiton Ltd., the world’s largest mining company, gained 4.4 percent in Sydney. Its Brazilian joint venture with Vale SA is exploring ways to restructure about $1.6 billion in loans. Japan’s Topix jumped 2.3 percent, with exporters Toyota Motor Corp. and Sony Corp. outperforming the benchmark amid the yen’s retreat. Japanese exports dropped in May for the eighth month in a row, data showed Monday, before a speech by central bank Governor Haruhiko Kuroda. Futures on the S&P 500 climbed 1.3%.

WTI crude climbed 1.8% to $48.86 a barrel, buoyed by a fourth daily decline in the Bloomberg Dollar Spot Index, and ignoring the third consecutive week of oil rig increases as US shale producers are once again back in business.

Markets Snapshot

  • S&P 500 futures up 1.3% to 2087
  • Stoxx 600 up 3.4% to 337
  • FTSE 100 up 2.7% to 6182
  • DAX up 3.5% to 9967
  • S&P GSCI Index up 0.8% to 380
  • MSCI Asia Pacific up 1.8% to 129
  • Nikkei 225 up 2.3% to 15965
  • Hang Seng up 1.7% to 20510
  • Shanghai Composite up 0.1% to 2889
  • S&P/ASX 200 up 1.8% to 5257
  • US 10-yr yield up 6bps to 1.66%
  • German 10Yr yield up 3bps to 0.05%
  • Italian 10Yr yield down 8bps to 1.43%
  • Spanish 10Yr yield down 8bps to 1.48%
  • Dollar Index down 0.62% to 93.63
  • WTI Crude futures up 1.5% to $48.72
  • Brent Futures up 1.7% to $50.02
  • Gold spot down 1.3% to $1,282
  • Silver spot down 0.3% to $17.44

Top Global News

  • Brexit Campaign Reopens as Cameron Accuses Rivals of Deception: Angry appearance marks end of truce after lawmaker murder
  • IMF Revives Recession Warning for U.K. Economy Over Brexit Vote: Says effects of leaving would be negative and substantial
  • BHP-Vale Mine, Crippled by Spill, Said in Restructure Talks: Brazil venture explores restructuring $1.6 billion of loans
  • Putin Said to Weigh $11b Rosneft Sale to China and India: Russia selling 19.5% stake as ‘we need the money,’ Putin says
  • Boeing Said Near $4b Deal With Russian Firm to Save 747: Volga-Dnepr in talks for at least 10 Boeing 747-8 freighters
  • Iran Said to Sign Contract With Boeing to Buy 100 Planes: Deal to be U.S. company’s first since sanctions lifted
  • Disney Sets Opening Record With ‘Nemo’ Sequel ‘Finding Dory’: Animated movie also has biggest debut weekend ever for Pixar
  • Bezos Rocket Passes Safety Test as Project Secrecy Starts Easing: Capsule returns safely after testing chute-out scenario
  • Hackers Targeting Clinton Aides Struck Across U.S. Politics: Intrusions burrowed into law and lobbying firms, foundations
  • IEX Outduels Citadel, NYSE as ‘Flash Boys’ Exchange Approved: SEC approves Katsuyama’s fix for market some say is rigged
  • Antitrust Officials Said to Voice Concerns on Anthem-Cigna: WSJ: Govt officials outlined worries at meeting about the merger
  • JD.Com Said to Be in Talks to Buy Wal-Mart’s Yihaodian: Yicai: co. reached final stages of negotiations, Yicai reports
  • MTN Names Rob Shuter CEO After Settling Record Nigerian Fine: co. turns to South African with European experience
  • Nigeria’s Naira Slumps as 15-Month Currency Peg Ends in Lagos: Currency falls 22% to dollar as interbank market opens

Looking at regional market, we start in Asia where stocks shrugged off last Friday’s US weakness, with most equity markets trading in positive territory following strength in crude and optimism for the Remain camp ahead of the EU referendum. Nikkei 225 (+2.3%) coat-tailed on a rebound in USD/JPY, while poor trade data increased pressure for further BoJ stimulus. Energy dictated sentiment in the ASX 200 (+1.8%) as WTI crude futures continued to gain momentum after crude rose by the most in 2 months. Shanghai Comp (+0.1%) traded in negative territory for much of the session before coming off worst levels ahead of the close as the “National Team” showed up again. The early downside came despite a significant CNY 170bIn liquidity injection by the PBoC, with demand for stocks dampened after firm China Home Prices data increased the appeal for property investment and also provides less room for China to ease policy.10yr JGBs traded higher despite the increased appetite for Japanese stocks with support seen after the BoJ’s buying operations to the tune of JPY 520b1n in government debt.

Top Asian News

  • Japan Exports Decline for Eighth Consecutive Month in May: Exports fell 11.3% y/y vs est. -10%
  • Rupee Pares Loss From One-Month Low on Suspected Intervention: RBI Governor Rajan to leave post when term expires in Sept.
  • Orient Securities Hong Kong Offer Seeks Up to $1.2 Billion: Co. and investors are offering combined 957m shares at HK$7.85 to HK$9.35/each
  • Vanke’s $6.9 Billion Share-Sale Plan Opposed by Shareholder: Plan aims to make Shenzhen Metro biggest shareholder in Vanke
  • China Home Prices Rose in Fewer Cities in May Amid Slower Sales: New-home prices gained in 60 cities in May versus 65 in April
  • Phone Tracking, Nude Selfie IOUs See Chinese Bare All for Credit: Consumers willingly give data at levels unacceptable elsewhere

In Europe, we have seen a strong bout of risk on sentiment across Europe, following the latest batch of referendum polls shifting towards the ‘remain’ camp. As such, European equities have stormed ahead during the European morning (Euro Stoxx: +3.2%), with outperformance seen in financial names. Germany’s DAX has exploded some 3.5% higher.  As well as this energy names have also performed well today given strength seen in the energy complex. In terms of fixed income, Bunds are trading lower this morning with yields seeing a reprieve amid the rally in equities as Brexit fears abate, as such the 10-yr benchmark has slipped below 165.00 while the yield curve has notably bear steepened.

Top European News

  • Pound Climbs Most Since 2008 as ‘Remain’ Regains Lead in Polls: Previous polls showing ‘Leave’ ahead sparked mkt turmoil
  • Schaeuble Says EU Set to Avoid Chaos If Britons Vote for Exit: German finance chief renews warning on excessive liquidity
  • VW Said Ready With $10 Billion Diesel Plan, to Devise Fix Later: co. still needs regulatory approval for retrofitting cars
  • Credit Suisse, UBS Said to Work With Abu Dhabi Banks on Deal: Credit Suisse advising NBAD on combination, UBS said with FGB
  • Renzi Suffers Local Vote Setback, Rome Has First Woman Mayor: Lawyer Virginia Raggi wins landslide in Italian capital
  • Barclays EMEA Head of Credit Restructuring Said to Join KKR Unit: Conway said to join Pillarstone banking advisory unit
  • Banks Face Harsher Penalties in Denmark After Nordea Failures: Government and regulator are looking into tougher laws

In FX, the pound strengthened against all 31 major peers, rising 2 percent versus the dollar, its biggest surge since 2008. The euro appreciated 0.5 percent, while the currencies of New Zealand, Norway and Sweden climbed 0.9 percent. South Korea’s won led gains in emerging markets with a 1.1 percent advance. “The markets have always been more comfortable with the U.K. remaining in the European Union, hence the boost to risk sentiment now that the ‘Remain’ camp’s campaign appears to be back on track,” Kathleen Brooks, London-based research director at Gain Capital Holdings Inc., wrote in a note. The yen dropped 0.4 percent to 104.58 versus the greenback, having surged 2.7 percent last week as the Bank of Japan refrained from expanding monetary stimulus at a time when Brexit risk was spurring demand for haven assets. Former Finance Ministry official Eisuke Sakakibara, known as Mr. Yen for his ability to influence the exchange rate in the late 1990s, predicts the exchange rate will gradually strengthen more than 4 percent toward 100 by the end of the year. India’s rupee fell 0.4 percent following central bank Governor Raghuram Rajan’s announcement that he will be leaving the authority when his term ends Sept. 4. Elsewhere, on the day Nigeria’s devaluation went official, the naira dropped to 253.50 versus the dollar. It was pegged at 197-199 through the end of last week, when three-month non-deliverable forwards were trading at 320.

In commodities, gold slipped 1.1 percent after Brexit risk spurred a 1.9 percent surge in the precious metal last week. As of June 14, money managers held the second-biggest bet ever that bullion would rally further, according to U.S. Commodity Futures Trading Commission data.West Texas Intermediate crude climbed 1.3 percent to $48.58 a barrel, buoyed by a fourth daily decline in the Bloomberg Dollar Spot Index. Nickel led gains among industrial metals, rallying 1.2 percent in London. Copper added 0.7 percent and zinc rose 0.8 percent. Corn dropped 1.8 percent after capping a sixth weekly climb on Friday, while soybeans lost 1.1 percent following a 2.6 percent surge in the last session. The U.S. Department of Agriculture is set to release its U.S. crop conditions report on Monday. About 75 percent of the the nation’s corn crop was in good-to-excellent condition as of June 12, the USDA said last week.

There are no major economic data expected in the US today; Bloomberg data with just the Fed’s Kashkari giving remarks on TBTF at 12:15pm ET

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

  • The latest Brexit polls have favoured ‘Remain’ and as such, significant upside has been seen in GBP/USD, which trades above 1.4650
  • Equities have benefitted from the positive sentiment to trade in a sea of green, while Bunds have slipped back below 165
  • Today is set to be a quiet session in terms of scheduled data, with focus to fall on the upcoming Brexit referendum, as well as participants looking to Yellen comments during the week
  • Treasuries decline in overnight trading, global equity markets and oil rally, gold falls as Brexit odds swing back toward “Remain.” Treasury to sell $26b 2Y notes, WI 0.75%; last sold at 0.92% vs 0.943% WI yield at bidding deadline, biggest stop through by a 2Y auction since June 2009.
  • The U.K. Prime Minister David Cameron tried to capitalize on a swing in momentum back to the “Remain” campaign and former London Mayor Boris Johnson accused the prime minister of having nothing to offer voters
  • With the outcome of the British vote too close to judge, central bankers are reaching for measures honed during the last financial crisis to assuage investor nerves
  • The Modi administration critiqued outgoing Reserve Bank of India Governor Raghuram Rajan’s record and moved to reassure foreign investors two days after he unexpectedly withdrew from being considered for a second term
  • Nigeria’s naira weakened 22% to 253.50 per dollar after the central bank allowed the currency of Africa’s biggest economy to float freely on Monday
  • Banks have been ramping up hiring of high touch sales traders in the last six to eight months, says recruitment firm Armstrong International

DB’s Jim Reid Concludes the overnight wrap

Those with a nervous disposition might want to hide this week as we have what could be a highly stressful event. Yes it episode 9 of the current series of Game of Thrones tonight. If previous series are anything to go by, the penultimate installment is the one to leave you shocked and emotionally drained. I’ve seen the title for tonight’s episode (which can’t be repeated in a family daily) and everything suggests an epic! No spoilers though please as I’ll be watching a day late due to England playing tonight. I’m a bit stressed writing this as I can’t remember if I told my wife the football was delaying GoT for a day.

Onto the actual main event of the week, if one believes the UK EU Referendum polls are a good reflection of sentiment, then this weekend it seems like the ‘Remain’ campaign have managed to undo the momentum that the ‘Leave’ campaign seemed to have built before last Thursday’s suspension of debate and activity.

There have been four notable polls over the weekend. Interestingly YouGov have compiled two which straddle Thursday’s campaign suspension. The first (Good Morning Britain – GMB) was compiled entirely before (15th-16th), and the second (Sunday Times – ST) saw a third of responses before (fieldwork spanned 16th and 17th). The GMB poll saw ‘leave’ 2 points in the lead, the ST poll had ‘remain’ 1 point in the lead. Both were online polls which compares to the 7% lead for ‘leave’ in their last online YouGov poll at the start of last week. So it could be said some momentum shift had occurred before Thursday’s campaign suspension but after it there seems to be further evidence. Interestingly if we dig into the Sunday Times poll 33% thought that they would be worse off if Britain left the EU, up from 23% a fortnight ago and comfortably the highest answer seen to this question.

The other two polls saw Opinium (for the Observer) see a 50/50 online survey split (fieldwork last Tues-Friday) and a Survation phone (fieldwork Friday-Saturday) poll giving the ‘remain’ side a 3% lead. This confirms the above trends. A reminder that on  Friday we showed a graph comparing the polls in the lead up to the Quebec, Scottish and current UK/EU referendum. In the previous two, the ‘Leave’ momentum built as the poll approached but in both the status quo of ‘remain’ saw the actual vote 5% higher than the last few polls so one can see why the ‘leave’ lead might need to appear to be more than 5% for there to be high confidence that this will be the final result.

Following a two and a half day suspension, the referendum campaigning is back underway again with PM David Cameron yesterday taking part in BBC’s Question Time in which he suggested that a potential ‘leave’ outcome would be a tragedy that would damage the UK economy and wreck job prospects. Expect plenty more comments from figureheads in both camps in the lead up this week but it’s clearly the opinion polls which will be front and centre. For now we’ve seen a reasonable turnaround in the implied probabilities based on political bookmaker odds. At Thursday’s close the odds of a ‘remain’ outcome were sitting at 66.2% (after dipping as low as 61% earlier in the session). Since then there’s been a steady move higher however and we closed Friday, Saturday and Sunday at 66.9%, 70.4% and 73.6% respectively. As we type the current odds are 74.4%. Meanwhile the main reaction to the weekend polls in markets has come in FX where Sterling is currently +1.46% and +0.80% versus the Dollar and Euro respectively.

While we’re talking currencies, DB’s Alan Ruskin noted in a piece published on Friday that the market has long worked on the presumption that Sterling’s downside on a ‘Brexit’ was much larger than its upside on a ‘Bremain’. He noted that this was partly based on the idea that ‘Brexit’ represented political and economic change and continued uncertainty, while ‘Bremain’ was more consistent with the status quo. However Alan thinks that there are a number of other factors which make the response more symmetrical including the sizable over hedging for GBP downside extreme moves, related spec positioning and downside protection from the BoE, amongst others. Indeed this more balanced view is also shared by DB strategists in other asset classes. Our European equity strategists see 10% upside in a remain scenario and 10% downside in a leave scenario while our interest rates strategists suggest that the market has adjusted to the point of pricing close to 50/50 risk although the asymmetry in the rates market is tilted slightly towards a higher probability of a leave vote. Overall though it feels like the general conclusion is one of much more balance in terms of pricing either way although clearly that could change quickly depending on the progression of remaining polls into Thursday.

Finally for today on the referendum, last week we published a note (Brexit risk in GBP and EUR credit) assessing the market’s pricing of ‘Brexit’ risk. Calculating this has been complicated by the ECB’s CSPP. Normally credit and equity performance is linked, at least in terms of direction. However this is turning into a rare year. This morning we’ve published a quick Credit Bites one pager showing that since the Euro credit market became established in 1999, 2016 YTD is only the second year (after 2001) where the Stoxx 600 has gone down while credit spreads are tighter and discuss that due to the ECB, Euro credit is bucking the ‘Brexit’ risk trend seen in other asset classes, especially equities. See the report an hour before this one for more.

The other big news from the weekend has come out of India where the Governor of the RBI, Raghuram Rajan, has announced that he is to stand down at the end of his current term in September. While his future had become a more talked about subject in recent weeks, it still throws open a period of uncertainty for India at a time where the UK EU referendum vote and Fed watching have markets already on edge. Indian equity markets are back to flat after initially opening in the red.

Elsewhere however and China aside, markets are relatively positive this morning. The Nikkei is currently +2.21% with the Yen weakening, despite exports in Japan reported as declining more than expected in May (-11.3% yoy vs. -10.0% expected). Meanwhile the Hang Seng (+0.68%), Kospi (+1.18%) and ASX (+1.16%) are also firmer. Elsewhere and as we type news is filtering through that Italy’s anti-establishment Five Star Movement is set to win mayoral elections in Rome and Turin according to Bloomberg. It’s worth keeping an eye on that as more information gets released.

Recapping Friday, markets finished the week on fairly divergent paths on each side of the Atlantic. Sentiment was greatly improved in Europe with the suspension of the UK EU referendum campaign seemingly helping. The Stoxx 600 closed +1.40% to help limit its five-day loss to -2.14% while the DAX was up +0.85% on the day and down -2.07% over the week. The FTSE 100 rose +1.19% and interestingly outperformed (-1.55%) on a relative basis versus other core European markets last week. It was the peripherals which stood out the most on Friday however with Italy’s FTSE MIB in particular closing +3.49%.
Over in the US however that positive sentiment never really carried over and markets were in the red from the off. Both the S&P 500 and Dow finished down -0.33% meaning they were -1.19% and -1.06% respectively on the week. A rough session for tech and health care names was to blame with bellwethers such as Apple and Alphabet down close to 3%. This more than offset the big gains from commodity sensitive names. Indeed Gold rose +1.58% and continues to test $1300/oz, while Oil markets finally snapped a run of six consecutive daily declines with WTI rallying just shy of 4%. Those moves coincided with another weak day for the US Dollar.

In truth there wasn’t a huge amount to report back from Friday’s session allowing investors to finally draw a breath from what was a frantic week. There was some interest however over at the Fed where the mystery FOMC dot was revealed. St Louis Fed President Bullard confirmed that he favours only one more rate hike through 2018 (to come this year) and declined to give a long-run projection. Clearly this is a huge change in stance from someone who was previously considered one of the most hawkish members of the committee. It’s possible that this could be more of a protest of the use of the dot plot projections however which have been seen as costing the Fed some credibility.

Friday’s dataflow didn’t add a whole lot to the debate. The only releases of note came in the afternoon in the US when it was revealed that housing starts declined less than expected in May (-0.3% mom vs. -1.9% expected). Building permits rose slightly less than expected however (+0.7% mom vs. +1.3% expected) although we did see a reasonable upward revision to the prior month’s data. The Atlanta Fed kept its Q2 GDP forecast unchanged at 2.8%, although that contrasts to the NY Fed who cut their forecast to 2.1% from 2.4%.

Following on from a frantic last week, it’s a quiet start to proceedings today with the latest German PPI print the only data of note on either side of the Atlantic.

The big event next week however is away from the data and of course reserved for Thursday with the UK EU referendum vote. In the lead up there are various TV debates scheduled each evening. As well as that, we will also hear from Fed Chair Yellen this week when she is set to address the Senate on Tuesday (3.00pm BST) and House Financial Services Policy on Wednesday (3.00pm BST) as part of her semi-annual monetary policy report. We’re also due to get comments from Kashkari this evening, Powell on Wednesday and Kaplan on Friday. Over at the ECB we’ll hear from Mersch today while a business conference sponsored by the German CDU party tomorrow will see Merkel, Schaeuble and Dijsselbloem all make comments. If all that wasn’t enough, next weekend on Sunday is of course also the Spanish General Election.

end ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed UP 3.70 POINTS OR 0.13% / /Hang Sang closed UP 340.22 OR 1.68%. The Nikkei closed UP 365.64 POINTS OR 2.34% Australia’s all ordinaires  CLOSED UP 1.66% Chinese yuan (ONSHORE) closed UP at 6.5825 /Oil ROSE to 48.74 dollars per barrel for WTI and 50.08 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.5903 yuan to the dollar vs 6.5825 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS A BIT 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA a) JAPAN ISSUES b) REPORT ON CHINA EUROPEAN AFFAIRS

Voters show displeasure with establishment as anit-establishment 5 star movement has won a key mayoral race in Rome, with Virginia Raggi the new mayor of the city:

(courtesy zero hedge)

Italy’s Anti-Establishment 5-Star Movement Delivers Dramatic Victories In Key Mayoral Races  

Until now, Italy’s 5-Star Movement has been viewed a protest and opposition party, however a second round of mayoral elections on Sunday changed that.

As we reported earlier this month, the anti-establishment 5-Star Movement candidates in the key cities of Rome and Turin had advanced to the second round of voting in each mayoral race. In Rome, the largest stage for voters to show displeasure with politics as usual under Prime Minister Matteo Renzi, residents were seeking new leadership to put an end to the recent turmoil which included corruption allegations, poor management, and political upheaval. On Sunday, voters in Italy’s capital decided quite definitively that it was time to move in a new direction.

5-Star Movement candidate Virginia Raggi, a 37-year old lawyer, was elected Rome’s first female mayor by winning a stunning 67% of the vote in the second round. Raggi trounced Roberto Giachetti (Prime Minister Renzi’s Democratic Party candidate) who took down just 33% of the vote the WSJ reports. The election of an anti-establishment 5-Star Movement candidate is a statement in itself, however by taking 67% of the vote over Renzi’s candidate, a resounding message has been sent that the voters want change.

“We will restore legality and transparency to the city’s institutions after 20 years of poor governance.With us a new era is beginning.” Raggi said.

Another political blow came for Renzi in Turin, where yet another 5-Star Movement candidate was elected mayor. Chiara Appendino won 55% of the vote as the 5-Star Movement candidate, defeating Piero Fassino, the Democratic Party incumbent who took 45% of the vote.

As we discussed after the first round results, Prime Minister Renzi is facing significant challenges within the country, least of which are weak economic growth and a banking sector on the verge of yet another major crisis. The key political losses in Rome and Turin will only bolster the 5-Star Movement, as it now has the opportunity to govern and prove what it can do for the people, while Renzi faces quite a challenge to put forward any type of reform agenda.

The runoff results in Rome and Turin were a neat and unmitigated defeat,” the Democratic Partysaid on Sunday night, calling a national party meeting for Friday to analyze the “national indications” of the elections.

There remains a constitutional referendum that will take place in October, and the result of that referendum is something that Renzi has staked his political future on. The referendum itself is to sharply reduce the powers of the Senate, and cut the number of senators by two-thirds, but more importantly, Renzi considers the constitutional overhaul as his flagship program, and as the WSJ notes,if voters reject the referendum Renzi said that he would resign.

* * *

These key election results signal that like in many other nations, the Italian people have had enough with the “establishment”, with politics as usual, and are prepared to move in a different direction. If the 5-Star Movement continues to gain further support, Renzi may want to start packing his bags in October – then again, what politicians say and do are always two different things, so the chances of Renzi actually resigning if the referendum fails are quite slim.

 

end

 

Citibank is stunned by today’s move in the GBP/USA up to close to 1.48. Tje move is already at the extreme print level thought by Citibank  that if the BREMAIN wins, then the highest they thought the pound would rise to is 1.48.  The author is stunned by the continual rise in the Yen.  He is surprised by the rise in gold today and the rise in the Cdn dollar.  The Brexit decision is far from over: yet the entire fear of the market has been removed!

(courtesy zero hedge)

As Sterling Soars Above 1.47, Citi Admits That It Is “Stunned” – Here’s Why  

One look at cable this morning, which moments ago hit 1.47, continuing its unprecedented move higher, which already was the biggest intraday move sine 2008, and traders would be allowed to conclude that the Brexit vote had come and gone, with Remain winning by a wide margin.

 

After all, with less than a 100 pips remaining to Citi’s “extreme print” forecast in case of a Remain victory, the move today has practically priced in the entire outcome of the “remain” vote.

 

So what is Citi’s take? Well, in a word, CitiFX’s Brent Donnelly is speechless. Here’s why:

“It is stunning how quickly we have spun to the assumption that Remain is a done deal. I understand why, of course. But still. Stunning. So markets have moved considerably since Friday and there is interesting variation among the reactions. I created a chart of vol-adjusted performance of assets and you can see it in Chart 1. For ease of comparison, I flipped anything where risk on = down. For example, USDCAD or bunds, I show the reaction as a positive number not a negative number so that it is all apples to apples.”

Chart 1: Vol-adjusted performance of assets since Friday’s close

Citi’s takeaways:

  • USDJPY = U-G-L-Y. It ain’t got no alibi, it’s ugly. A lot of people would have thought EURJPY or USDJPY would be the best trade on Remain (besides GBP, obviously). But USDJPY continues to trade heavier than a heavy thing. It is tempting to go short USDJPY here and stop above 105.55.
  • Gold trades very well. I would have expected a much larger selloff.
  • European rates have moved more than US rates, as one might expect.
  • EURSEK has moved more than I would have thought. Could this be a sign of a major turn there?
  • Crude and copper barely get a lift.

And the conclusion: “There is still potential for one more Brexit scare but time is running out and this referendum fear is looking set to fizzle a la Y2K.”

Unless, of course, the next poll to come out shows a lead for Leave in which case take all of the above and flip it.

end

 

trading from Europe today:  all green!

(courtesy zero hedge)

European Stocks Surge Most In 10 Months (To One-Week Highs)

Europe’s Stoxx 600 index surge 3.7% today – the biggest rip since the bounce after August 2015’s crash – as hope runs wild that The UK will stay in the zombified European Union. Spain and Italy are leading the surge, as are banks (especially UK banks)…

 

 

led by Spain and Italy…

 

Just a little context here – the last 2 days have seen UK Banks soar 7.8%, but remain down 15% YTD…

end The real truth behind the BREXIT debate: (courtesy  Meijer/Automatic Earth Blog) The Brexit Debate Is So Out Of Hand Because Nobody Understands What It’s Really About

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

The reason the Brexit debate has gotten so out of hand is nobody understands what it’s about.

The Brexit campaigns have started anew in the UK, and from what I’ve seen here from left field barely a thing has changed since the murder of MP Jo Cox. Neither side has any qualms about using her death to make their respective points. The main, and perhaps only real, point is that nobody understands what the vote is about. Jo Cox, bless her soul, didn’t either.

This lack of understanding is also, at the same time, the reason why the debate has gotten so out of hand.Nobody seems to understand it’s not about Cameron or Nigel Farage, or Michael Gove vs Boris Johnson, it’s about voting for or against the EU, for or against Juncker and Tusk and five other unelected presidents having a say in one’s life.

And that’s not all either. It’s about voting to leave, or remain in, a Union that is already dead and preserved only in a zombie state. Brexit is just one vote and many more will inevitably follow. Brexit is not the first, Grexit had that ‘honor’ last year. Later this month, elections in Italy and Spain have the potential to turn into preliminary Italix and Spexit votes. And then there will be more.

The reason why these things are taking place, and will be, going forward, is that the economies of all these countries are fast deteriorating. The sole reason why people have accepted the rule of Brussels coming from far away over their daily lives, is the promise that it would make those lives better and more comfortable.

That promise has been shattered. The EU has made things worse for most Europeans, not improved them. And when seen in that light, why should people agree to continue to be told what to do by those who’ve made them poorer? There’s no democratic model in which that remotely makes sense. There are only undemocratic models left.

Britain’s Brexit referendum has run head first into global developments, and there is no sign that any voice in the discussion recognizes this. They all think it’s about something else. And of course Cameron’s policies have devastated the country, and of course the even more right wing Leave campaigners would make that worse. But that’s not what this is about.

What Cameron missed when he called the referendum is not that some of his friends could turn on him and go Leave, what he missed is that so many Brits from both the left and the right would turn on him. He never expected that to happen. He always figured his manipulated rosy pink economic numbers would outweigh people’s actual daily lives.

This is a global phenomenon, it has little to do with Cameron himself, other than his neoliberal budget cuts are often even more extreme than those of many of his pan-European and indeed American and global peers. It has a lot more to do with the neoliberalism embedded in Brussels, which has installed technocratic governments in many countries, especially in southern Europe, all with disastrous consequences for the populations.

It’s an exact mirror image of what is happening in the US. The jobs numbers the government and media feed Americans look good once filtered through a hundred layers of manipulation, but people look at what job they themselves have, and what it pays them, and they look at their families, friends and neighbors, and then decide this just ain’t working out or adding up.

The Brexit vote is, in a nutshell, Britain’s last chance to hit the lifeboats and jump the Titanic before it hits the iceberg. This is not even because of the dictatorial character Brussels has taken on, which is starting to display cartoonish properties, it’s because the global economy has hit the debt iceberg well before the EU has.

Voting Remain in this week’s referendum comes down to “Let’s stay onboard so we can help rearrange the deckchairs. And while we’re at it, pick some nice tunes for the orchestra to play on the way down as we sink.”

If there’s one outstanding advantage to the Brexit debate, it must be that it has opened up British society to reveal all its festering boils, pimples, pustules, ulcers and neoplasms that had before remained veiled by either stiff upper lips or outright dumb-ass ignorance. Not that the ‘discussion’ has done anything to lift the dumb-assery, mind you; the intelligence level of the Brits has been exposed as yet another hidden sore.

Nothing typically British there either. Neither the people nor the politicians nor the media in the country show any sign of comprehending what is happening to them. Nobody is capable of taking a step back and seeing a bigger picture. Jo Cox’s death has done nothing to fix that issue. Indeed, if there’s one thing Britain has been, and still is, showing the world it’s that it’s incapable of solving its problems.

But that incompetence is not going to be alleviated by handing the reins to Cameron or Johnson, or Corbyn, or indeed Juncker and Tusk. The only remedy is a cold hard look at what’s really going on in Britain itself, a look at its place in a rapidly imploding global economic system, and a look at what being a part of the EU actually means.

To gauge that last bit, all one has to do is to look at Greece, at how the EU has forced the demise of the Greek economy, of its once magnificent health-care system, and of countless other segments of a society still mired today in inexorable decline. A look at the treatment of refugees holds a lesson or two as well.

The summarized lesson from all this is that Brussels will happily throw you under a bus if it feels that would further its ambitions. Of which the EU has many.

The treatment of Greece and the refugees has redefined the term ‘Union’, and everyone should take note.

In America, the Democratic and Republican parties have all but internally combusted and destroyed themselves. In Britain, Labo(u)r did that years ago through Tony Blair, and the Tories are doing it today by infighting over Brexit. None of these things are incidents or stand-alone events.

They are part of a much larger pattern, as evidenced by the popularity numbers of people like French president Hollande (8%?!). All but a few incumbent parties in the west are evaporating. And all for the same reason: the demise of the existing economic models and systems that they have based their policies and popularity on.

An economy in decline means the end of centralization and the end of existing political power structures. This is inevitable. Because both can exist only by the grace of ever growing economies. It’s what our economies are based on. It’s what our entire world view is based on. Sometime in the future historians will have a hard time understanding this, but for now it’s all we have, because it’s all we’re willing to consider: growth to infinity and beyond.

Which was, or seemed to be, kind of alright as long as there indeed was growth. But there no longer is any growth. And it will not return for a long time, arguably not in our lifetimes. Which makes it a problem that we haven’t prepared for the end of growth. Which is not terrible smart given that making a point for growth having stopped decades ago looks quite solid.

People in Britain try desperately to link Jo Cox’s murder to some sort of larger movement or entity, even if for all they know, for all they can know, the killer is just another warped individual who didn’t take his meds for a long enough period to make him go fully off kilter.

Yeah, he ordered some right wing magazines and books. But that doesn’t mean there’s a conspiracy behind the murder. Nor does it make this fascist and/or right-wing terrorism. Those claims are made solely in an effort to connect the tragedy to the Brexit vote. And that effort all by itself is a huge blemish on Jo Cox’s life, her death and her legacy.

To truly honor her would be to make sure you understand, and help others understand, what she herself did not.

end Then at 1:30 pm Cable  (short form for GBP/USA) snapped!. It fell to 14637, over 100 basis points lower from its zenith! However it rebounded to close to 1.4686. (courtesy zero hedge) end Then late this evening: Cable dumps on latest poll showing the leaves out in front by 2 percentage points (courtesy zero hedge) Cable Pumps’n’Dumps On Latest Polls As Telegraph Backs “Leave”  

With bookies’ odds shifted by a mere GBP25k bet overnight, and decoupled from the only post-Cox death polls’ “leave” bias, traders were focused on the release of new polls tonight… YouGov “Leave” +2pts; ORB “Remain” +7; and NatCen “Remain” +6.

 

The FT reported National Centre for Social Research poll has 6-point “Remain” lead (53-47).

View image on Twitter

is-deciderHtmlWhitespace" cite="https://twitter.com/AdamBienkov/status/744991957131341825">

Adam Bienkov

@AdamBienkov

Financial Times reporting tonight’s Natcen poll has a six point Remain lead.

Remain: 53%
Leave: 47%

4:34 PM – 20 Jun 2016

Then The Telegraph/ORB poll was released pointing to a similar lead 7-point “Remain” lead (53-46)

is-deciderHtmlWhitespace" cite="https://twitter.com/lizzie363/status/744994520723492864">

Lizzy @lizzie363

ORB/DAILY TELEGRAPH POLL SHOWS 53 PCT OF BRITONS WOULD VOTE TO REMAIN IN EU, 46 PCT TO LEAVE

4:45 PM – 20 Jun 2016

 

Which is ironic as:

  • BRITAIN’S TELEGRAPH NEWSPAPER SAYS BACKS “LEAVE” VOTE IN EU REFERENDUM

As The Telegraph explains…

The referendum, this Thursday, is a chance to vote for ambition and hope. Britain faces challenges and opportunities ahead, in or out of the European Union.

 

But, we can only reach our full potential, if we take back democratic control over the direction and destiny of our country.

 

There are risks on either side. But, the risks of remaining in the EU are greater – including double-digit Eurozone unemployment, dangerous levels of Italian debt which beckon the next financial crisis, and a broken EU immigration system. We’d be better placed to weather these looming storms from outside the EU.

And then YouGov spoiled the party…

  • YOUGOV/TIMES POLL SHOWS 42 PCT OF BRITONS WOULD VOTE TO REMAIN IN EU, 44 PCT WOULD VOTE TO LEAVE

Swinging Cable around…

END GLOBAL ISSUES

 

Finally, we have a strong NATO alliance member (Germany) official Steinmeier  slams NATO’s warmongering against Russian:

(courtesy zero hedge)

Huge Scandal Erupts Inside NATO: Alliance Member Germany Slams NATO “Warmongering” Against Russia

As we reported in just the past week, not only has NATO accelerated its encirclement of Russia, with British soldiers deployed in Estonia, US soldiers operating in Latvia and Canadians in Poland, while combat units are being increased in the Mediterranean… 

… but even more troubling, was NATO’s assessment that it may now have grounds to attack Russia when it announced that if a NATO member country becomes the victim of a cyber attack by persons in a non-NATO country such as Russia or China, then NATO’s Article V “collective defense” provision requires each NATO member country to join that NATO member country if it decides to strike back against the attacking country.

Specifically, NATO is alleging that because Russian hackers had copied the emails on Hillary Clinton’s home computer, this action of someone in Russia taking advantage of her having privatized her U.S. State Department communications to her unsecured home computer and of such a Russian’s then snooping into the U.S. State Department business that was stored on it, might constitute a Russian attack against the United States of America, and would, if the U.S. President declares it to be a Russian invasion of the U.S., trigger NATO’s mutual-defense clause and so require all NATO nations to join with the U.S. government in going to war against Russia, if the U.S. government so decides.

Also recall that the attack on the DNC servers which leaked the Democrats confidential files on Trump and Hillary donors lists were also blamed on “Russian government hackers”, before it emerged that the act was the result of one solitary non-Russian hacker, but not before the US once again tried to escalate a development which may have culminated with war with Russia!

Throughout all of these escalations, the popular narrative spun by the “democratic” media was a simple one: it was Russia that was provoking NATO, not NATO’s aggressive military actions on the border with Russia that were the cause of soaring geopolitical tension. Ignored in the fictional plot line was also Russia’s clear reaction to NATO provocations that it would “respond totally asymmetrically” an outcome that could in its worst oucome lead to millions of European deaths. Still, no matter the risk of escalation, one which just two weeks ago led to assessment that the  “Risk Of Nuclear Dirty Bomb Surges On Poor US-Russia Relations“, NATO had to maintain its provocative attitude .

All NATO had to do was assure that all alliance members would follow the lead, and nobody would stray from the party line.

And then everything imploded when none other than the Foreign Minister of NATO member Germany, Frank-Walter Steinmeier, criticized NATO for having a bellicose policy towards Russia, describing it as “warmongering”, the German daily Bild reported. And just like that, the entire ficitional narrative of “innocent” NATO merely reacting to evil Russian provcations has gone up in flames.

As AFP adds, Steinmeier merely highlighted all those things which rational persons have known about for a long time, namely the deployment of NATO troops near borders with Russia in the military alliance’s Baltic and east European member states. However, since it comes from a NATO member, suddenly one can’t accuse Russian propaganda. In fact, NATO has absolutely no planned response to just this contingency.

“What we should avoid today is inflaming the situation by warmongering and stomping boots,”Steinmeier told Bild in an interview to be published Sunday.


German Foreign Minister Frank-Walter Steinmeier

“Anyone who thinks you can increase security in the alliance with symbolic parades of tanks near the eastern borders, is mistaken,” Germany’s top diplomat added.

Needless to say, Russia bitterly opposes NATO’s expansion into its Soviet-era satellites and last month said it would create three new divisions in its southwest region to meet what it described as a dangerous military build-up along its borders. This is precisely what NATO wants as it would be able to then blame Russian effect to NATO cause as an irrational move by the Kremlin, one to which the kind folks at NATO HQ would have no choice but to respond in their caring defense of all those innocent people, when in reality it is NATO that is desperate to provoke and launch the conflict with Russia.

And now even its own members admit it!

In its latest ridiculous escalation, blamed on Russia no less, NATO announced on Monday that it would deploy four battalions to Estonia, Latvia, Lithuania and Poland to counter a more assertive Russia,ahead of a landmark summit in Warsaw next month. Well, as Steinmeier made it very clear, NATO’s deployment to provoke Russia was precisely that. As a result a Russian “assymmetric” response is assured, and this time it may even spill over into the combat arena, something which would bring infinite delight to Washington’s military-industrial complex neocon puppets.

In an interview with Bild on Thursday, NATO chief Jens Stoltenberg said Russia is seeking to create “a zone of influence through military means”. “We are observing massive militarisation at NATO borders — in the Arctic, in the Baltic, from the Black Sea to the Mediterranean Sea,” he told the newspaper.

How do we know Steinmeier hit it nail on the head? The neocon Council of Foreign Relations trotted out its “fellow” who promptly took to character assassinations and demanding Steinmeier’s resignation, instead of asking if perhaps a NATO-member country accusing NATO of being a warmongering provocateur, is not the real reason why Europe is back deep in the cold war, with an escalating nuclear arms race to go alongside it, courtesy of the US military industrial complex whose profits are entirely dependent on war, conflict and the death of civilians around the globe.

Stephen Sestanovich @SSestanovich

If Steinmeier calls it “warmongering” to push back agst Putin, he should step down — that’s not German policy.https://twitter.com/esmolar/status/744202099177684992 …

12:29 PM – 18 Jun 2016

As for the unprecedented reality in which NATO’s biggest and most important European member is suddenly and quite vocally against NATO and as a result may be pivoting toward Russian, we for one can’t wait to see just how this shocking geopolitical debacle for western neocons and war hawks concludes.

 

END

 

Nigeria’s currency plunges 30% overnight despite oil rising. The country is trying to use capital controls to stem the loss of USA dollars but it is of no use.  These guys are heading for hyperinflation!

(courtesy zero hedge)

 

 

Nigeria Takes First Bold Step Toward Hyperinflation As Currency Plunges 30%

As we warned last week was likely, Nigeria’s decision to throw in the towel on maintaining its currency peg has resulted in a collapse in the Naira. Ending a 16-month-long effort to ‘fix’ its currency, Nigeria’s shift to a free float has resulted in a 30% crash in the currency as the central bank began auctioning dollars to try and clear backlogs of orders for hard currency. However, as the forward market suggests, the pain is far from over as the hyperinflationary endgame remains more than likely.

The Central Bank of Nigeria used capital controls to stem an outflow of dollars after the naira crashed to a then-record in February 2015 as oil prices slumped. While stabilizing the currency, the controls deterred foreign investors and starved manufacturers of foreign currency needed to pay for raw materials and equipment. Nigeria’s gross domestic product contracted in the three months through March for the first time since 2004 and inflation accelerated to an almost six-year high of 15.6 percent in May.

The shift to a free float, however has resulted in a collapse from 200 to around 260 Naira to the US Dollar…

And, as Bloomberg reports, there may be “higher volatility until the market becomes more functional,” Samir Gadio, head of Africa strategy at Standard Chartered in London, said in an e-mailed response to questions.

“Foreign investors will need to be convinced that the new foreign-exchange platform is sustainable before they resume the purchase of local assets.”

Few trades went through in the hour or so after the market opened, making it hard to tell what the naira’s fair value is, according to Craig Thompson of Nyon, Switzerland-based brokerage Continental Capital Partners SA. The central bank seems to want to stabilize the currency at around 250-260 per dollar and most local banks will be nervous about pushing through trades much weaker than that, he said.

While allowing the naira’s exchange rate to be “market-driven,” the central bank would intervene when necessary, Governor Godwin Emefiele said when he announced the new system on June 15.

“I think it will move to 300 at some stage,” Thompson said by phone. “There’s all that pent-up demand. But you don’t want to be seen by the central bank to be pushing it lower. It won’t sit well. There’s a bit of moral suasion to keep it here. But as the client orders come through, the banks will have to pay up to supply their clients.”

Forwards markets suggest the depreciation has much further to go. Three-month naira non-deliverable forward contracts rose 0.3 percent to 321 against the dollar, while one-year contracts climbed 0.6 percent to 356, heading for a record close.

For Nigeria’s 175 million-strong population, this means that Nigeria is about become the next Venezuela, with imminent hyperinflation on deck, as prices soar to keep up with the collapse in the spot rate. 

Of course, what is bad news for the population is great news for capital markets as the “devaluation as a bullish case for stocks” arguments spew forth. Stocks always surge as a country is about to tumble into the hyperinflationary abyss. The question is whether the nominal price increase will keep up with the all too real collapse in the Naira’s purchasing power which is about to slam Nigeria. If Venezuela is any indication, the answer is no.

Finally, for those wondering how to trade here, the answer may once again revolve around the Niger Delta Advisors: if Nigeria is unable to export more oil due to supply disruptions and thus inject much needed dollars into its Treasury, the country’s financial situation wil get even more dire, leading to an acceleration in the naira’s devaluation.  On the other hand should Nigeria’s government be successful in taming its offshore funded militants, the naira may be a buy, however that trade would be offset by a short in oil as the world’s most acute crude supply disruption comes to an end.

In any case, watch out for unsolicited Nigerian emails from financially erudite locals asking you to buy stocks, bonds, or any other asset class. Those will result in guaranteed losses.

end EMERGING MARKETS:

Of all the central banks in the world to break into, this doorknob broke into Venezuela’s Central bank and no doubt he will find that everything has been looted.

At least in prison he will get 3 meals and a bed:

(courtesy zero hedge)

Armed Man Breaks Into Venezuela’s Central Bank – Crime In Progress by Tyler Durden – Jun 20, 201

 

In addition to violent, and often deadly, looting taking place at virtually every Venezuela venue that still has food, moments ago Reuters reported that – in what appears to be a crime in progress – an armed man has broken into Venezuela’s central bank, and employees were hunkered down in their offices, two sources inside the institution said on Monday.

“An armed person got in,” one of the sources said by text message from the office in downtown Caracas. “We’re shut in our office. We don’t know what’s happening.”

There was no official word from the bank or other Venezuelan authorities.

There was also no official word on what if anything the armed robber was hoping to find inside the bank which has been as looted of any valuables by the Maduro regime, as virtually every other place in the devastated socialist nation.

Then again, once the robber lands in prison for what will surely be a lengthy prison sentence, he will at least have a bed, a roof, 3 square meals and all the toilet paper he could need, much more than his impoverished peers, and all provided for by that socialist archetypal ideal: “other people.”

In retrospect, not a bad plan.

Developing story

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

Euro/USA   1.1320 UP .0049 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 104.59  UP 0.537 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4628 DOWN.0285 (MUCH LESS THREAT OF BREXIT)

USA/CAN 1.2818 DOWN .0071

Early THIS MONDAY morning in Europe, the Euro ROSE by 49 basis points, trading now WELL above the important 1.08 level FALLING to 1.1320; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite  CLOSED UP 3.70 POINTS OR 0.13%   / Hang Sang CLOSED UP 340.22 POINTS  OR 1.68%   AUSTRALIA IS HIGHER BY 1.66%/ EUROPEAN BOURSES ARE ALL IN THE GREEN  as they start their morning/

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this MONDAY morning: closed UP 365.64 POINTS OR 2.34% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 340.22 POINTS OR 1.68% . ,Shanghai CLOSED UP 3.70 POINTS OR 0.13% / Australia BOURSE IN THE GREEN: (RESOURCES UP)/Nikkei (Japan) CLOSED IN THE GREEN/India’s Sensex IN THE GREEN

Gold very early morning trading: $1178.90

silver:$17.30

Early MONDAY morning USA 10 year bond yield: 1.668% !!! UP 7 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.489 UP 6 in basis points from FRIDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early MONDAY morning: 93.68 DOWN 53 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

END

And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.16% DOWN 16 in basis points from FRIDAY

JAPANESE BOND YIELD: -0.145% DOWN 1/2  in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD:1.48%  DOWN 6 IN basis points from FRIDAY

ITALIAN 10 YR BOND YIELD: 1.43  DOWN 8 IN basis points from FRIDAY

the Italian 10 yr bond yield is trading 5 points lower than Spain.

GERMAN 10 YR BOND YIELD: +.05% up 3 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

Euro/USA 1.1308 UP .0035 (Euro =UP35 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 103/97 DOWN .087 (Yen UP 9 basis points )

Great Britain/USA 1.4687 UP.03446 ( Pound UP 346 basis points/(LESS BREXIT CONCERN)

USA/Canada 1.2803- DOWN 0.0084 (Canadian dollar UP 84 basis points  AS OIL ROSE  (WTI AT $49.24).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 35 basis points to trade at 1.1308

The Yen ROSE to 103.97 for a GAIN of 9 basis points as NIRP is STILL a big failure for the Japanese central bank/

The POUND was UP 345 basis points, trading at 1.4687 

The Canadian dollar ROSE by 84 basis points to 1.2803, WITH WTI OIL AT:  $49.24

The USA/Yuan closed at 6.5768/

the 10 yr Japanese bond yield closed at -.145% DOWN 1/2  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 4 IN basis points from FRIDAY at 1.6664% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.468 UP 4 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 93.66 DOWN 26 CENTS  ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY

London:  CLOSED UP 182.91 OR 3.04%
German Dax :CLOSED UP 330.66 OR  3.43%
Paris Cac  CLOSED UP 146.93  OR 3.50%
Spain IBEX CLOSED UP 285.10 OR 3.91%
Italian MIB: CLOSED UP 430.16 OR 2.54%

The Dow was up 129.71  points or 0.73%

NASDAQ up 49.5 points or 1.13%
WTI Oil price; 49.22 at 4:30 pm;

Brent Oil: 50.44

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  64.26 (ROUBLE UP 49/100 ROUBLES PER DOLLAR FROM YESTERDAY) AS THE PRICE OF BRENT ROSE AND WTI ROSE

TODAY THE GERMAN YIELD FALLS TO +.05%  FOR THE 10 YR BOND

.

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5 PM:49.20

BRENT: 50.35

USA 10 YR BOND YIELD: 1.6886% 

USA DOLLAR INDEX: 93.65 down 28 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.4683 up .0340  or 340 basis pts.

German 10 yr bond yield at 5 pm: +.050%

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

 

Sterling Soars Most Since Lehman Before Stocks Brexit-Relief-Rally Fades Ahead Of Key Polls

“It hasn’t learned…”

 

Why everything rallied… because bookies odds surged (despite a lack of movement in the polls)…

 

US equity markets ripped higher overnight and extended gains at the cash open, ending near the lows of the cash session (which Bob Pisani called “just off the highs”)…

 

The S&P 500 surge was as technical as it gets – tagging 2,100 perfectly before fading…having punched VIX down to 16.5 (S&P Cash high of the day 2100.66!)

 

Dow’s 500 point “dead cox bounce” gave back 150 this afternoon…

 

Nasdaq and S&P underformed on the day…

 

S&P, Dow, and Small Caps were ramped up to unchanged from the close beforer last week…

 

Bonds & Bullion remain the leaders post-payrolls…

 

Netflix ripped and dipped after changing its logo…

 

Of course – all anyone cared about was Cable, which soared the most since Lehman

 

Ending above 1.4700 despite a perlious flash-crash on “Remain” campaign headlines…

 

USDJPY closed at new lows since Aug 2014…

 

Notably, as soon as Europe closed, US equities began to fade, decoupling from Cable as USDJPY started to tumble…

 

Treasury yields rose 3 to 6bps on the day (long-end underperforming short-end), extending the selling post Jo Cox death…

 

Note 2s30s flattened during the US day session…

 

Copper and crude rallied (risk on) as Gold opened down and flatlined; silver levitated from the US Open…

 

*  *  *

So in conclusion, Global markets surged today, because bookmakers odds suggesting UK would “remain” increased with betting tilted last night by a singular bet of 25,000 pounds

is-deciderHtmlWhitespace" cite="https://twitter.com/lizzie363/status/744970091511549955">

Lizzy @lizzie363

Do you know how fucking insame that is!! One bet of 25,000 ponds skewed bookie odds on remain and poof markets around the world rally.

3:08 PM – 20 Jun 2016

Charts: Bloomberg

end

 

Bellwether Caterpillar retail’s sales continue to decline.  This time for the 42nd consecutive month.  Global demand for good is simply awful:

(courtesy Caterpillar/zero hedge)

 

Caterpillar Retail Sales Decline For Unprecedented 42nd Consecutive Month

There was some glimmers of hope that after a modest rebound in North American and Chinese retail sales of industrial bellwether Caterpillar in the early part of the year, that the manufacturing landscape may be finally changing as demand for CAT heavy manufacturing and construction equipment re-emerges. Alas, those hopes were doused following the latest, May, retail sales reported by Caterpillar earlier today. These showed that after sliding “only” 8% in March, US retail sales have once again started to deteriorate, sliding -11% in April and -12% in May. Perhaps more notably, after declining just 10% in April, retail sales in the Asia/Pacific region – read China – are once again accelerating their drop, and were down 13% in May.

The OEM data confirms a troubling trend Evercore ISI recently highlighted regarding rising inventory of CAT equipment: according to Evercore, when updating the CAT dealer website used inventory data, it was “struck by how sustained the growth has been in CAT dealers’ used equipment inventory in North America” as per the graph below (at least based on how good the dealer website data is and how heavily this listing is used by the dealers as not all use it as heavily as others though clearly North American CAT dealers use it more than international CAT dealers).

Evercore’s take: “continued negative CAT dealer trends like these used dealer inventory datapoints, all on top of my long held view CAT’s backlog is running low relative to 2016 sales guidance and/or investor hopes 2017 is an up year all suggest expect the next sales guidance revision by CAT to be a negative one.”

More troubling, here is the chart that confirms that any light at the end of the industrial and heavy manufacturing tunnel is most likely just one of the few trains still running: there are now 42 consecutive month of CAT retail sales declines. This has never happened in the company’s history.

 

Finally, here is Bloomberg’s analysis of the data:

end

Michael Snyder writes that the Republicans are now trying to change the rules at the convention to unbind the delegates so that they can vote for someone other than Trump:

(courtesy Michael Snyder)

 

Republican Operatives Launch All-Out Effort To Unbind Delegates, Deny Trump Nomination

Submitted by Michael Snyder via The Economic Collapse blog,

If you think that Donald Trump already has the Republican nomination locked up, then you don’t understand what is going on behind the scenes.
It has long been my contention that the elite will move heaven and earth in order to keep Trump from ever setting foot in the Oval Office.  One way that they could try to do this is by attempting to deny him the nomination at the Republican convention next month.  Over the past couple of days, the Washington Post, CNN and a whole host of other mainstream news outlets have been reporting on a new “last-ditch effort” that has been launched by Republican operatives to get the Republican convention Rules Committee to unbind all of the delegates and allow them to vote however they want.  As you will see below, they can do this, and if they get enough votes they will do it.

This current effort is different from what we have seen so far during this campaign season, because it is actually being organized by the delegates themselves.  The following comes from the Washington Post

Dozens of Republican convention delegates are hatching a new plan to block Donald Trump at this summer’s party meetings, in what has become the most organized effort so far to stop the businessman from becoming the GOP presidential nominee.

The moves come amid declining poll numbers for Trump and growing concern among Republicans that he is squandering his chance to defeat Democrat Hillary Clinton. Several controversies — including his racial attacks on a federal judge, his renewed call to temporarily ban Muslims from entering the United States and his support for changing the nation’s gun laws — have raised fears among Republicans that Trump is not really a conservative and is too reckless to run a successful race.

This movement is being spearheaded by a delegate from Colorado named Kendal Unruh.  She is actually a key member of the Republican convention Rules Committee, and this is very important for reasons that I will explain below.

For her, it is not about getting some other specific candidate nominated.  Rather, the entire goal is simply to stop Donald Trump

This literally is an ‘Anybody but Trump’ movement,” said Kendal Unruh, a Republican delegate from Colorado who is leading the campaign. “Nobody has any idea who is going to step in and be the nominee, but we’re not worried about that. We’re just doing that job to make sure that he’s not the face of our party.

So what will it take for Unruh and her allies to be successful?

As Fox News explained, there are basically two courses of action…

To prevail, Unruh needs a majority of the 112 members of the convention rules committee, which has two delegates from each state and territory. Then, a majority of the full convention’s 2,472 delegates would have to approve.

There’s a Plan B. If Unruh can win over one-fourth support from the rules committee — just 29 delegates — the full convention must vote on her proposal. So far she’s got around 10 supporters though some prefer delaying the rule’s impact until the 2020 convention, she said.

On Thursday night, Unruh was on a conference call that included at least 30 delegates from 15 different states, and the Washington Post says that regional coordinators for this effort have been recruited “in Arizona, Iowa, Louisiana, Washington and other states.”

One individual that took part in this conference call on Thursday night told CNN that calls are pouring in from people all over the country that want to be part of this movement…

I will tell you, about every two hours people contact me about how to join this effort,” Lonegan said. “This has never been done before, so there’s no textbook on how to do it. So we’re building an organic effort, state by state, to convince members of the Rules Committee to sign onto a rule that unbinds the delegates to vote their moral conscience.”

So could the Republican convention Rules Committee actually do this?

Could they actually unbind all of the delegates and allow them to vote however they wished?

Well, yes they actually could do this.  As Time Magazine has explained, the Republican convention Rules Committee essentially has the power to make up any rules that they want…

It has the power to review and amend all of the rules of the Republican Party, pending ratification by the full convention. If it wanted to, it could insert a rule that says only candidates with blue hair could be the party’s nominee. It’s that powerful. In a contested scenario, the Rules Committee would be ground zero for fights over who and how candidates are nominated on the floor, as well as how the convention itself is conducted.

And thanks to political wrangling by the Cruz campaign, we do know that the rules committee is dominated by delegates that are loyal to Cruz

The convention rules committee is made up of one man and one woman from each of the 50 states, U.S. territories, and the District of Columbia. Dominated by party insiders and loyalists to Texas Sen. Ted Cruz—who aggressively worked state conventions to secure slots on the committee—it remains to be seen what the committee’s appetite would be for such a dramatic break from the existing rules.

If I was Donald Trump, I would be taking this very, very seriously.

But at this point he seems to be brushing it off

“I have tremendous support and get the biggest crowds by far and any such move would not only be totally illegal but also a rebuke of the millions of people who feel so strongly about what I am saying,” Trump said in a statement. “People that I defeated soundly in the primaries will do anything to get a second shot — but there is no mechanism for it to happen.”

Right at this moment we still have about a month left before the convention.

So that gives those involved in the anti-Trump movement quite a bit of time to rally their forces.

The rule change that would unbind all of the delegates and free them up to “vote their consciences” has already been drafted.  Here is the text of the proposed rule change…

Preserving Delegates’ Ability to Vote Their Individual Conscience

The secretary of the national convention shall receive and faithfully announce and record each delegate’s vote in accordance with these rules. If any such delegate notifies the secretary of his or her intent to cast a vote of conscience, whether personal or religious, each such delegate shall be unbound and unconstrained by these rules on any given vote, including the first ballot for the selection of the Republican nominee for President of the United States, without the risk of challenge, sanction, or retribution by the Republican National Committee. Allowable personal reasons shall include the public disclosure of one or more grievous acts of personal conduct by a nominee candidate, including but not limited to, criminally actionable acts, acts of moral turpitude or extreme prejudice, and/or notorious public statements of support for positions that clearly oppose or contradict the policies embodied in the Republican Party’s platform as established at the national convention.

I have warned about the great political shaking that is coming to this nation, and if this rule change is even attempted at the Republican convention it would create seismic shifts in the U.S. political landscape.

Of course there is still one huge question that I have not even addressed in this article yet.

If Trump has the nomination taken away from him, who would the Republican nominee be?

Some are convinced that it would be Paul Ryan, but I believe that it would be somebody else.

Mitt Romney has certainly not hidden his disdain for Donald Trump, and right now he is quietly waiting in the wings.  If the anti-Trump forces get their way, I believe that he would be the man that ultimately walks away with the prize.

end Lake Mead levels are now at record lows at 1072 feet.  You will recall me stating to you that 1075 is the level once breached would cause the authorities to issue cutbacks in Arizona and Nevada, but not yet California.   Lake Mead which receives its water from the Colorado River has been drying up for years. (courtesy zero hedge) Las Vegas Going Dry? Largest Reservoir In America Reaches Record Low

Las Vegas and its 2 million residents and 40 million tourists a year may have a problem. As we noted a month ago, America’s largest reservoir Lake Mead reached a record low, nearing levels that would force the Interior Department to declare a “shortage,” which will lead to significant cutbacks for Arizona and Nevada. Well it has got worse…

At 1072 Feet, Lake Mead has never been more empty…

Source: LakesOnline

Under the federal guidelines that govern reservoir operations, the Interior Department would declare a shortage if Lake Mead’s level is projected to be below 1,075 feet as of the start of the following year. In its most recent projections, the Bureau of Reclamation calculated the odds of a shortage at 10 percent in 2017, while a higher likelihood – 59 percent – at the start of 2018.

But those estimates will likely change when the bureau releases a new study in August. Rose Davis, a public affairs officer for the Bureau of Reclamation, said if that study indicates the lake’s level is going to be below the threshold as of Dec. 31, a shortage would be declared for 2017.

That would lead to significant cutbacks for Arizona and Nevada. California, which holds the most privileged rights to water from the Colorado River, would not face reductions until the reservoir hits a lower trigger point.

 

And now, to put this rapid decline in context,  NASA Earth Observatory published the two space images…

As NASA explains,they’re from a pair of Landsat satellites and show the lake near its highest and lowest points over the past 32 years. The Landsat 5 satellite acquired the top image on May 15, 1984. The lake last approached full capacity in the summer of 1983. Landsat 8 acquired the second image – below – on May 23, 2016.

As one water research scientist warned, “this problem is not going away and it is likely to get worse, perhaps far worse, as climate change unfolds.”

As population growth and heavy demand for water collide with hotter temperatures and reduced snowpack in the future, there will be an even greater mismatch between supply and demand, said Kelly Sanders, an assistant professor at the University of Southern California who specializes in water and energy issues.

“The question becomes how to resolve this mismatch across states that all depend on the river to support their economic growth,” Sanders said. She expects incentives and markets to help ease some of the strains on water supplies, “but it is going to be tricky to make the math work in the long term.”

end  Well that is all for today. I will see you tomorrow but I will be publishing later than usual. Harvey.

June 17/Latest poll tonight shows BREXIT firmly in the lead/Massive paper gold deposit into GLD of 7.13 tonnes/Huge withdrawal of 5.418 million oz of silver from the SLV/ Unbelievable COT report showing a massive 54,726 contracts supplied short by...

Fri, 06/17/2016 - 19:07

Good evening Ladies and Gentlemen:

Gold:  $1,292.50 DOWN $3.60    (comex closing time)

Silver 17.40  DOWN 19 cents

 

In the access market 5:15 pm

Gold: 1299.00

Silver: 1749.

 

And for comparison:  just look what the access price of gold and silver were yesterday at 5:15 pm

Gold $1278.60

silver:  17.19

 

The June gold contract is an active contract. Last  night we had a poor sized 4 notices filed last night, for 400 oz to be served upon today.  The total number of notices filed in the first 12 days is enormous at 15,141 for 1,514,100 oz.  (47.094 tonnes)

ii) in silver we had 207 notices filed for 1,035,000 oz..  Total number of notices served  in the 10 days:  409 for 2,045,000 oz

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 274.09 tonnes for a loss of 29 tonnes over that period

 

In silver, the total open interest ROSE by 172 contracts UP to 202,138 DESPITE THE FACT THAT THE PRICE OF SILVER WAS up by 10 cents with respect to YESTERDAY’S trading. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.010 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia &ex China)

In silver we had 207 notices served upon for 2,045,000 oz.

In gold, the total comex gold OI ROSE by a GIGANTIC 19,757 contracts UP to 574,733 as the price of gold was UP $10.30 with YESTERDAY’S trading (at comex closing).

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

 GLD

Huge activity last night and today:

We had two deposits:

last night:  a deposit of 1.782 tonnes

this afternoon: 5.3480 tonnes

they must have been busy loading the “paper” gold into inventory!

We had no changes in inventory, the GLD/Inventory rests at  907.88 tonnes.

 SLV

THIS MAKES NO SENSE!!

We had A HUGE WITHDRAWAL FROM  inventory  to the tune of 5.418 million oz, silver inventory tonight  rests  at 337,347 million oz.  If they did have some physical silver that inventory was used to ship to China which has been massively importing silver..

 

Both the GLD and SLV are massive frauds as they have no metal behind them!

.

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

1. Today, we had the open interest in silver ROSE by 172 contracts up to 202,310 as the price of silver was UP  10 cents with YESTERDAY’S trading. The gold open interest ROSE by a whopping 19575 contracts UP to 574,733 as the price of gold was up $10.30  YESTERDAY.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

3. ASIAN AFFAIRS

i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed UP 12.28 POINTS OR 0.43% / /Hang Sang closed UP 131.56 OR 0.66%. The Nikkei closed UP 165.52 POINTS OR 1.07% Australia’s all ordinaires  CLOSED UP 0.32% Chinese yuan (ONSHORE) closed DOWN at 6.5913 /Oil ROSE to 46.93 dollars per barrel for WTI and 48.28 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.6009 yuan to the dollar vs 6.5913 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS 

REPORT ON JAPAN  SOUTH KOREA AND CHINA a) REPORT ON JAPAN

none today

b) REPORT ON CHINA

This could be a deadly fight as Beijing orders Apple to stop sales of iphone 6 models as they state that they are infringing on Chinese intellectual property.

If a fight occurs, you can be sure that China will take delivery of its gold and silver at the comex.

( zero hedge)

4. EUROPEAN AFFAIRS

i)The following indicates the health of Greek citizens have been hit hard with austerity:

( KeepTalking Greece.com)

ii)My goodness it begins:  Members of the European Parliament beg Draghi to initiate helicopter money

( zero hedge)

iii)Lewis Johnson of Capital Wealth Advisors, discusses the real issue in the BREXIT debate. He claims, like Alasdair Macleod, that the real issue is the health of European Banks, something that I have also been harping on( Lewis Johnson/Capital Wealth Advisors)

 

iv)The BREXIT and BREMAIN suspends campaigning until Saturday.  However it looks like that death of Jo Cox will cause a sympathy vote towards the REMAIN crowd.

( zero hedge)

v)Interesting!  British credit default risk soars to 3 yr highs as worries about a BREXIT intensify!(courtesy zero hedge)

 

vi)Leave it to JPMorgan to find who is in the correct lead:  They report a 3 to 5% lead for the leave  (BREXIT) crowd.

( JPMorgan/zero hedge)

vii)Then bang!! late this afternoon a huge gain for the BREXIT crowd:

(courtesy zero hedge) 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS none today 6.GLOBAL ISSUES

i)Another terrific commentary from Michael Snyder as he outlines how the top 10 economies in the world are faring:  in a nutshell, badly!

( Michael Snyder/Economic Collapse Blog)

ii)1,Japan announced last night that they have purchased 34% of all Japanese bonds outstanding.  Quite a feat!

2. Citibank, has also lashed out against the misguided negative interest rates and the damage it will do to the banking system: ( Citibank./Gregory Marks) 7.OIL ISSUES

Oil rigs in the USA are rising at the fastest pace in 10 months

( zero hedge)

8.EMERGING MARKETS Brazil is in total disaster mode and here is why! (courtesy zero hedge) 9. PHYSICAL STORIES

i)Canada experiments with the “Bitcoin” blockchain:

( London’s Financial Times/Stafford/GATA)

ii)A huge paper tonight from Alasdair Macleod and a must read.  He delves into the BREXIT situation and he concludes that the worst outcome for the conservatives would be a close race and the BREMAIN has a slight 51% win.  Eventually, the EU experiment will fail and these guys will have trouble in power.  A BREXIT win outright will save them.

However his main emphasis in his paper is the plight of the European banks and their zombie non performing loans.  Due to the huge Target 2 imbalances, the banks and debtors of Italy, Portugal, Spain, and Belgium cannot possibly repay German banks.  This is ready to burst and the bank with all its derivatives, Deutsche bank will blow up with them.

( Alasdair Macleod)

 

iii)Central banks are ready for massive intervention if Britain chooses independence:

( Bloomberg/Black and Campbell/GATA)

iv)A good commentary today from Chris Powell  who comments on Thomas Jordan’s interview where he states that central banks will intervene if BREXIT is a reality.

( Chris Powell/GATA)

 

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)The minimum wage increase at WalMart is causing more trouble for the economy has hundred more are to be fired:

( WalMart/zero hedge)

ii)This is a biggy!  Bullard goes full dove from uber hawk and refuses to give long term prognosis:

( zero hedge)

 

iii)Then Jeff Gundlach warns us all:

( Gundlach/zero hedge)

iv)

Let us wrap up the week with this offering from Greg Hunter of USAWatchdog

(courtesy Greg Hunter/USWatchdog

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 574,733 for a  gain of 19,757 contracts AS THE PRICE OF GOLD WAS UP $10.30 with respect to YESTERDAY’S TRADING. .WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEAR THAT IS JUNE, A VERY ACTIVE MONTH. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH..  IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . HOWEVER WE HAVE MORE THAN MADE UP FOR THE LOSS AS MORE INVESTORS ENTER THE ARENA TO TAKE ON THE CRIMINAL BANKERS. WE HAD A TINY LOSS IN JUNE OI TODAY FOR GOLD OZ STANDING IN THIS ACTIVE JUNE CONTRACT.

The FRONT gold contract month of June saw it’s OI fall to 736 for a loss of 173 contracts. We had 140 notices filed yesterday, so we lost 33 contracts or 3300 additional oz  WILL NOT STAND FOR METAL. The next active contract month is July and here we saw it’s OI rose by a huge 674 contracts up to 4583.This no doubt will be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI ROSE by 12,530 contracts UP to 422,406. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was GOOD at 213,167. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was EXCELLENT at 391,394 contracts. The comex is not in backwardation.

Today we had 4 notices filed for 400 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by 172 contracts from 202,138 UP to 202310 as  the price of silver was UP BY  10 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 12contracts up TO  340. We had 0 notices filed yesterday, so we GAINED 2 CONTRACTS OR 10,000 ADDITIONAL SILVER OUNCES WILL  STAND FOR DELIVERY. The next big delivery month is July and here the OI FELL BY ONLY 456 contracts DOWN to 90,372. We have two weeks to go before first day notice. The volume on the comex today (just comex) came in at 74,949 which IS HUGE. The confirmed volume YESTERDAY (comex + globex) was HUMONGOUS at 102,235. Silver is not in backwardation . London is in backwardation for several months.   We had 207 notices filed for 1,035,000 oz.  

JUNE contract month:

INITIAL standings for JUNE

June 17. Gold Ounces Withdrawals from Dealers Inventory in oz   nil OZ Withdrawals from Customer Inventory in oz  nil  nil Deposits to the Dealer Inventory in oz NIL Deposits to the Customer Inventory, in oz   NIL No of oz served (contracts) today 4 contracts
(400 oz) No of oz to be served (notices) 732 contracts

73,200 oz Total monthly oz gold served (contracts) so far this month 15,141 contracts (1,514,100 oz)

(47.094 TONNES SO FAR) Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ Total accumulative withdrawal of gold from the Customer inventory this month  149,885.6 OZ

Today we had 0 dealer DEPOSITS

total dealer deposit:  NIL  0z

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

Today we had 0 customer deposit:

Total customer deposits; NIL   OZ

Today we had 0 customer withdrawals:

total customer withdrawals:  NIL oz

Today we had 0 adjustments:

 

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 4 contracts of which 1 notices was stopped (received) by JPMorgan dealer and 3 notices was stopped (received)  by JPMorgan customer account.  To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (15,141) x 100 oz  or 1,514,100 oz , to which we  add the difference between the open interest for the front month of JUNE (736 CONTRACTS) minus the number of notices served upon today (4) x 100 oz   x 100 oz per contract equals 1,587,300 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.    Thus the INITIAL standings for gold for the JUNE. contract month: No of notices served so far (15,141) x 100 oz  or ounces + {OI for the front month (736) minus the number of  notices served upon today (4) x 100 oz which equals 1,587,300 oz standing in this   active delivery month of JUNE (49.371 tonnes). INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK   ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS from the start of the month (49.371 TONNES) . WE LOST 33 contracts or an additional 3300 oz will not stand for GOLD in this Juner delivery month. Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you.    We thus have 49.474 tonnes of gold standing for JUNE and 53.05 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing. We now have partial evidence of gold settling for last months deliveries We now have 6.889 TONNES FOR MAY + 49.3716 TONNES FOR JUNE + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044 ; june 10 -.0008  = 66.0976 tonnes still standing against 53.05 tonnes available.  Total dealer inventor 1,705,727.692 tonnes or 53.05 tonnes Total gold inventory (dealer and customer) =8,812,135.971 or 274.09 tonnes    Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 274.09 tonnes for a loss of 29 tonnes over that period.    JPMorgan has only 25.70 tonnes of gold total (both dealer and customer) JPMorgan now has only .900 tonnes left in its dealer account. THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD!!    end GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX And now for silver  

June initial standings

 June 17.2016

Silver Ounces Withdrawals from Dealers Inventory nil oz Withdrawals from Customer Inventory  608,873.470  oz

BRINKS

  Deposits to the Dealer Inventory NIL Deposits to the Customer Inventory   597,929.900  oz

JPM, No of oz served today (contracts) 207 CONTRACTS 

1,035,000 OZ No of oz to be served (notices) 133 contracts

665,000 oz Total monthly oz silver served (contracts) 409 contracts (2,045,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month nil oz Total accumulative withdrawal  of silver from the Customer inventory this month  20,020,890.7 oz

today we had 0 deposit into the dealer account

total dealer deposit:NIL oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 1 customer deposit:

i) Into JPMorgan:  608,873.47 oz

 

Total customer deposits: 608,873.47  oz.

We had 1 customer withdrawals

i) Out of Brinks:  608,873.47 oz

:

total customer withdrawals:  608,873.47 oz

   

 

 we had 0 adjustments

 

The total number of notices filed today for the JUNE contract month is represented by 207 contracts for 1,035,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (409) x 5,000 oz  = 2,045,000 oz to which we add the difference between the open interest for the front month of JUNE (340) and the number of notices served upon today (207) x 5000 oz equals the number of ounces standing    Thus the initial standings for silver for the JUNE contract month:  409 (notices served so far)x 5000 oz +{340 OI for front month of JUNE ) -number of notices served upon today (207)x 5000 oz  equals  2,710,000 of silver standing for the JUNE contract month. We gained 2 contracts or 10,000 additional silver ounces will stand today for the June contract month..   Total dealer silver:  23.520 million  (RECORD LOW INVENTORY) Total number of dealer and customer silver:   150.042 million oz The total open interest on silver is NOW moving closer to its all time high with the record of 207,394 being set May 18.2016. The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver. THE RUN ON THE SILVER COMEX INCREASES IN INTENSITY AS THE CUSTOMER ACCOUNT DROPS BY  11,000 + OZ. end At 3:30 pm we receive the COT report on position levels of our major players. First let us see how our criminal bankers behaved this week: Gold COT: WOW!! what crooks!!!

 

Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 347,557 67,695 38,925 113,281 411,358 499,763 517,978 Change from Prior Reporting Period 51,869 626 -2,207 341 54,726 50,003 53,145 Traders 187 92 86 50 61 277 205   Small Speculators   Long Short Open Interest   45,594 27,379 545,357   -976 -4,118 49,027   non reportable positions Change from the previous reporting period COT Gold Report – Positions as of Tuesday, June 14, 2016 Our large specs: Those large specs that have been long in gold added a monstrous 51,869 contracts to their long side. Those large specs that have been short in gold added a tiny 626 contracts to their short side.

Our CRIMINAL “BERNIE MADOFF” COMMERCIALS

 

Those commercials who are long gold added a tiny 341 contracts to their long side. Those commercials who are short gold added the highest short position on recorded time at 54,726 contracts while are gleeful regulators cheered them on in this total farce. Our small specs: Those small specs that have been long in gold pitched a tiny 976 contracts from their long side. Those small specs that have been short in gold covered 4118 contracts from their short side Conclusion: I am speechless! And now for our silver COT: Silver COT Report: Futures Large Speculators Commercial Long Short Spreading Long Short 97,370 27,731 18,488 56,766 138,510 10,694 -1,904 -2,777 290 10,200 Traders 102 59 45 38 45 Small Speculators Open Interest Total Long Short 199,111 Long Short 26,487 14,382 172,624 184,729 -1,472 1,216 6,735 8,207 5,519 non reportable positions Positions as of: 166 131 Tuesday, June 14, 2016   © SilverSeek.com

Our large specs:

Those large specs that have been long in silver added a large 10,694 contracts.

Those large specs that have been short in silver covered 1904 contracts from their short side

 

Our Commercials  (same criminals as above)

 

Those commercials that have been long in silver added 290 contracts to their long side

Those commercials that have been short in silver added a whopping 10,200 contracts to their short side  (and the price stays relatively constant)

 

Small specs:
Those small specs that have been long in silver pitched 1472 contracts from their long side

Those small specs that have been short in silver added 1216 to their short side

 

Conclusions;

Put these criminals in jail.

end

And now the Gold inventory at the GLD June 17./we had two huge deposits: last night: 1.782 tonnes and this afternoon: 5.3480 tonnes/Inventory rests at 907.88 tonnes JUNE 16/no changes in GLD/Inventory rests at 900.75 tonnes. June 15/the farce continues:  another paper deposit of 2.08 tonnes into the GLD/Inventory rests at 900.75 tonnes. Wait until you see tomorrow’s level!! June 14./ANOTHER HUGE “PAPER” DEPOSIT OF 2.38 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 898.67 TONNES JUNE 13/ANOTHER GOOD SIZED PAPER GOLD DEPOSIT OF 2.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS 896.29 TONNES June 10/a huge “paper” deposit of 6.54 tonnes of gold into the GLD/Inventory rests at 893.92 tonnes JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes) June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

June 17.:  inventory rests tonight at 907.88 tonnes

end

 

Now the SLV Inventory June 17/a monstrous 5.418 million oz of silver withdrawn from the SLV.  This may be some real silver and thus it is heading for China which is massively importing silver/inventory rests at 337.347 million oz JUNE 16./no changes in silver inventory/rests tonight at 342.765 million oz June 15and the dfarce continues for the SLV/we had a massive 2.376 million oz of a paper deposit into the SLV/Inventory rests at 342.765 million oz June 14./NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 340.389 MILLION OZ JUNE 13/A HUGE PAPER SILVER ADDITION OF 1.664 MILLION OZ/INVENTORY RESTS AT 340.389 MILLION OZ June 10/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz. June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/ June 6/no change at the SLV/Inventory rests at 337.299 million oz/ June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ . June 17.2016: Inventory 337.347million oz end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 1.3 percent to NAV usa funds and Negative 1.7% to NAV for Cdn funds!!!!  (the discount is starting to disappear) Percentage of fund in gold 61.4% Percentage of fund in silver:37.3% cash .+1.3%( June 17/2016). / 2. Sprott silver fund (PSLV): Premium FALLS  to -0.36%!!!! NAV (June 17/2016)  3. Sprott gold fund (PHYS): premium to NAV  RISES TO +1.29% to NAV  ( June 17/2016) Note: Sprott silver trust back  into NEGATIVE territory at -36% /Sprott physical gold trust is back into positive territory at +1.29%/Central fund of Canada’s is still in jail.      

END

And now your overnight trading in gold,FRIDAY MORNING and also physical stories that may interest you: Trading in gold and silver overnight in Asia and Europe Mark O’Byrne (Goldcore) Gold Prices Surge to Highest in Nearly Two Years On FED and Brexit Haven Demand By Mark O’ByrneJune 17, 20160 Comments

 

Gold prices surged to their highest level in nearly two years yesterday on BREXIT concerns and deepening concerns that the Federal Reserve central banks are slowly losing control of the financial and monetary system.

Gold subsequently fell quite sharply below the key $1,300 level but remains roughly 1% higher for the week in all currencies and is on track for its third week of gains.


Asset Performance YTD 2016 (Finviz)

Ultra loose monetary policies are set to get even looser as the Federal Reserve confirmed zero percent interest rate policies are set to continue and negative interest rates deepened as Germany became the latest bond market to experience negative rates.

The backdrop of the most uncertain geo-political and economic conditions in many years is also leading to safe haven demand which pushed gold to the highest level since August 2014 touching $1,315/oz.

Sharp falls in European and Asian stock market indices this week and this year (see Table above) is also contributing to the precious metal gains. U.S. stock market indices remain buoyant for now but the fundamentals of the U.S. stock market continue to deteriorate and we look set to see a very significant correction or indeed worse in the coming months.

Gold and silver remain the top performing assets in 2016 with 21.1% and 25.4% returns in dollar terms respectively. They have seen even larger gains in sterling terms of 24.4% and 28.7% due to sterling’s depreciation on Brexit concerns.

The twin risk of terrorism and war were seen again this week after the massacre in the Orlando nightclub and deteriorating relations between Russia and the North Atlantic Treaty Organization (NATO) powers.

Nato has urged Russia to withdraw its troops and armour from Ukraine and accused Russia of “massive militarisation” around the fringes of Europe, as the alliance traded barbs with Moscow ahead of a major summit next month. The western military alliance’s plans to deploy four battalions close to Russian borders has further heightened tensions in an increasingly destabilised Europe.

The ‘clash of civilisations’ appears to be intensifying on a number of fronts alas.

On the monetary policy side of things, central banks appear increasingly desperate with the Federal Reserve now “legitimately” considering using “helicopter money” and the ECB creating euros to buy European junk debt and being urged to “lavish” consumers with “quantitative easing for the people (see News below).

The Federal Reserve confirmed Wednesday that zero interest rate policies (ZIRP) are set to continue and rates remain at a record lows. The Fed left interest rates unchanged as expected at 0.25 percent to 0.5 percent. They lowered projections for how much they expect to tighten monetary policy in the next few years due to the uncertain outlook and also cited the risks that BREXIT posed to markets in the short term.

The very patchy economic “recovery” in the U.S. and internationally have made the Fed even more dovish, with a greater number of officials now seeing scope for just a single rate increase this year, rather than two. This makes non yielding and non negative yielding gold more attractive to investors internationally.

Continuing ultra loose monetary policies by all major central banks is benefiting gold as is the increasing spectre of negative interest rates. Global sovereign debt with negative yields surpassed a whopping $10 trillion for the first time last month, according to Fitch Ratings.

Japan is by far the largest source of negative-yielding bonds. Other countries with negative bonds include Sweden, Hungary and Switzerland. The amount stood at $10.4 trillion on May 31, up 5% from $9.9 trillion on April 25, when the rating agency last measured the amount. $7.3 trillion of the total is long-term debt and $3.1 trillion is short-term debt.

ECB is creating euros to buy junk debt

14 countries now have negative yields including Germany, whose bonds went negative this week. German 10 year bund yields went below zero on ‘Brexit’ fears and due to ultra loose monetary policies. The ECB’s ongoing QE became even more radical last week and now involves creating euros to buy European junk debt.

This is a radical monetary experiment that will in time almost certainly lead to acollapse in the “safe haven” government bond market and see all major currencies devalued internationally and a reset of gold and silver to much higher levels.


Gold and Silver News
Gold inches up, set for third straight weekly gain of 1% (Reuters)
Gold surges near 2-yr high on dovish Fed, ‘Brexit’ worries (Bullion Desk)
Global Central Banks Sound Brexit Alarm as ‘Leave’ Jitters Grow (Bloomberg)
Flight to safety spells danger for riskier assets (Australian)
EU politicians urge ECB to lavish ‘helicopter money’ on consumers (FT)

Perfect Storm Of Bad Political And Economic News Will Drive Gold Higher (Forbes)
Gundlach: “Central Banks Are Losing Control” – Full Presentation (Zero Hedge)
The Fed and other central banks have lost their magic powers (Marketwatch)
Never sell your gold—and buy more: trader (Yahoo Finance)
BREXIT Would See “Massive Run” In Gold (CNBC)
Read More Here

Gold Prices (LBMA AM)
17 June: USD 1,284.50, EUR 1,142.05 and GBP 899.41 per ounce
16 June: USD 1,307.00, EUR 1,161.14 and GBP 922.01 per ounce
15 June: USD 1,282.00, EUR 1,141.49 and GBP 903.04 per ounce
14 June: USD 1,279.40, EUR 1,140.84 and GBP 904.79 per ounce
13 June: USD 1,284.10, EUR 1,139.25 and GBP 909.27 per ounce
10 June: USD 1,266.60, EUR 1,121.07 and GBP 876.87 per ounce

Silver Prices (LBMA)
17 June: USD 17.37, EUR 15.43 and GBP 12.19 per ounce
16 June: USD 17.71, EUR 15.79 and GBP 12.54 per ounce
15 June: USD 17.41, EUR 15.51 and GBP 12.26 per ounce
14 June: USD 17.25, EUR 15.37 and GBP 12.17 per ounce
13 June: USD 17.32, EUR 15.37 and GBP 12.23 per ounce
10 June: USD 17.32, EUR 15.33 and GBP 12.01 per ounce

Recent Market Updates
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED
– Gold In Euros Surges 6.5% In June and 17% YTD On BREXIT Concerns
– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis

– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

 

Mark O’Byrne Executive Director Published in Daily Market Update

END

 

Canada experiments with the “Bitcoin” blockchain:

(courtesy London’s Financial Times/Stafford/GATA)

Canada experiments with digital dollar on blockchain

Submitted by cpowell on Thu, 2016-06-16 12:36. Section:

By Phillip Stafford
Financial Times, London
Thursday, June 16, 2016

Canada is experimenting with putting a digital version of its currency on the blockchain, the distributed-ledger technology that underpins the cryptocurrency bitcoin.

The move to put a government-backed currency on blockchain and integrate it into the daily operations of a major central bank would mark a significant advance for the emerging technology.

The Bank of Canada revealed it was developing the CAD-Coin, a digital version of the Canadian dollar, in a private presentation in Calgary on Wednesday.

According to slides seen by the Financial Times, the initiative will involve issuing, transferring, and settling central bank assets on a distributed ledger. It is codenamed Project Jasper and is being carried out in conjunction with several of Canada’s biggest banks, including Royal Bank of Canada, CIBC and TD Bank, as well as Payments Canada. The central bank is expected to reveal more details on Friday. …

… For the remainder of the report:

http://www.ft.com/intl/cms/s/0/1117c780-3397-11e6-bda0-04585c31b153.html

 

END

 

A huge paper tonight from Alasdair Macleod and a must read.  He delves into the BREXIT situation and he concludes that the worst outcome for the conservatives would be a close race and the BREMAIN has a slight 51% win.  Eventually, the EU experiment will fail and these guys will have trouble in power.  A BREXIT win outright will save them.

However his main emphasis in his paper is the plight of the European banks and their zombie non performing loans.  Due to the huge Target 2 imbalances, the banks and debtors of Italy, Portugal, Spain, and Belgium cannot possibly repay German banks.  This is ready to burst and the bank with all its derivatives, Deutsche bank will blow up with them.

(courtesy Alasdair Macleod)

 

Alasdair Macleod: Brexit is getting the blame

Submitted by cpowell on Thu, 2016-06-16 23:14. Section:

7:12p ET Thursday, June 16, 2016

Dear Friend of GATA and Gold:

Britain’s departure from the European Union is not the biggest problem facing the financial markets, GoldMoney’s Alasdair Macleod writes today. Rather, he maintains, the biggest problem is the insolvency of Europe’s banks. Macleod’s commentary is headlined “Brexit Is Getting the Blame” and it’s posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/brexit-is-getting-…

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

 

END

Central banks are ready for massive intervention if Britain chooses independence:

(courtesy Bloomberg/Black and Campbell/GATA)

Central banks ready to defeat markets if Britain chooses independence

Submitted by cpowell on Fri, 2016-06-17 03:42. Section:

Global Central Banks Sound Brexit Alarm as ‘Leave’ Jitters Grow

By Jeff Black and Matthew Campbell
Bloomberg News
Thursday, June 16, 2016

Global central banks sounded the alarm over the risks posed by a British departure from the European Union, as polls continued to show the “Leave” campaign ahead with a week to go before the June 23 referendum.

In a 15-hour relay of comments, the chiefs of the U.S. Federal Reserve the Bank of Japan, the Bank of Canada, and the Swiss National Bank all cited the referendum on EU membership as being potentially disruptive to the global economy. The BOJ said central banks are in contact over a so-called Brexit, and the Bank of England repeated its warning on the risks in its final monetary-policy decision before the vote.

We are “closely exchanging opinions with the Bank of England and other central banks,” BOJ Governor Haruhiko Kuroda told reporters in Tokyo on Thursday, adding that his institution can respond to any potential surge in dollar-funding costs. “We want to coordinate closely with domestic and overseas authorities and carefully watch how the vote will affect the international financial market and the global economy, including Japan.”

With almost all recent polls showing “Leave” in the lead, investors are focused on how financial guardians at the Fed, European Central Bank, and BOJ can stem market panic if the U.K. takes such a step. Officials stress that liquidity facilities left over from the crisis era are available, and central bankers in countries like Switzerland and Denmark say they’re ready to act to stabilize their currencies.

It is “possible that we’ll have turbulences” in reaction to a Brexit, SNB President Thomas Jordan said in a Bloomberg Television interview in Bern. “We have a very good exchange among all major central banks so that the information is here, so that we understand the developments in the market.”

In the first instance, officials could act in global markets to prevent any “exaggerations,” Jordan said. ECB Governing Council member Ewald Nowotny said in Vienna on Thursday that swap agreements between central banks will ensure lenders have access to liquidity during any “disturbances on the market.”

“We’d expect major central banks to intervene to push back against this volatility,” Steven Barrow, a strategist at Standard Bank Group Ltd. in London, said in a note to clients. “Policy makers will feel they already have the tools in place to try to limit wider disruption.” …

… For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-06-16/global-central-banks-s…

 

 

END

 

A good commentary today from Chris Powell  who comments on Thomas Jordan’s interview where he states that central banks will intervene if BREXIT is a reality.

(courtesy Chris Powell/GATA)

 

Analyze this (technically)

Submitted by cpowell on Fri, 2016-06-17 05:16. Section:

1:29a ET Friday, June 17, 2016

Dear Friend of GATA and Gold:

Well, there it was Thursday, out in the open, reported by a mainstream financial news organization, Bloomberg, if without any recognition of its meaning. All the major central banks are plotting coordinated intervention in the financial markets if the United Kingdom votes next week to reclaim its independence by withdrawing from the European Union:

http://www.bloomberg.com/news/articles/2016-06-16/global-central-banks-s…

Citing a television interview he gave in Bern, Bloomberg reported that Thomas Jordan, president of the Swiss National Bank, said “officials could act in global markets to prevent any ‘exaggerations.'”

A member of the governing council of the European Central Bank, Ewald Nowotny, was quoted by Bloomberg as saying that central bank currency swap arrangements will ensure that lenders “have access to liquidity during any ‘disturbances on the market.'”

How much “exaggeration” and “disturbance” will be allowed? That is, what range of prices will be permitted in which financial instruments? At what points will central banks intervene? Of course only they and their agents will be permitted to know that; ordinary traders and investors will have to guess. Market manipulation works much better if it is concealed.

And when the crisis — if there is one — passes, no doubt the “technical analysts” among the financial letter writers will haul out their silly jargon and enormous egos in an attempt to demonstrate that there has been no intervention at all and not even the threat of it and that everything that has happened can be explained by the tried-and-true formulas they long have been using to explain market movements.

Doug Casey of Casey Research would say that nothing central banks do matters, though they are authorized to create infinite money and deploy it in secret without any accountability.

Steve Saville of the Speculative Investor would produce four charts “proving” that there had been no government intervention in markets anywhere since the Reichswirtschaftsminister took control of pricing stocks on the Berlin Stock Exchange in February 1943.

Market analyst Dan Norcini would insist that the Thomas Jordan interviewed by Bloomberg Television was a different Thomas Jordan, not the Swiss central banker.

And newsletter writer Avi Gilburt would expand on Casey’s posture, declaring that market rigging and the deception and cheating of investors by government mean nothing to humanity and the only important thing in life is how much money his subscribers have made with his recommendations since last Tuesday.

In the face of these central bank proclamations of their plans for intervention, all these market analysts are invited to analyze a great scene from one of the “Naked Gun” movies to see if they can identify the character they most resemble:

https://www.youtube.com/watch?v=rSjK2Oqrgic

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

 

END

 

 

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

:

1 Chinese yuan vs USA dollar/yuan  DOWN to 6.5913 ( DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.60009) / Shanghai bourse  UP 12.28 OR 0.43%   / HANG SANG CLOSED UP 131.56 OR 0.66%

2 Nikkei closed DOWN 165.52 OR 1.07% /USA: YEN FALLS  TO 104.25

3. Europe stocks opened ALL IN THE GREEN  /USA dollar index DOWN to 94.40/Euro DOWN to 1.1261

3b Japan 10 year bond yield: RISES  TO -.150%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.25

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  46.98  and Brent: 48.28

3f Gold DOWN  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

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

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to +003%   German bunds BASICALLY negative yields from  10 years out

 Greece  sees its 2 year rate FALL to 9.87%/: 

3j Greek 10 year bond yield FALL to  : 8.20%   (YIELD CURVE NOW COMPLETELY INVERTED)

3k Gold at $1289.00/silver $17.41(7:45 am est)   SILVER RESISTANCE AT 16.52 BROKEN 

3l USA vs Russian rouble; (Russian rouble UP 64 in  roubles/dollar) 65.06-

3m oil into the 46 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 104.25 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9621 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0835 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU NEW POLLS INDICATES A SWING TO THE BREXIT.

3r the 10 Year German bund now NEGATIVE territory with the 10 year RISES to  + .003%

/German 10 year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.604% early this morning. Thirty year rate  at 2.419% /POLICY ERROR)

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Rebound As Brexit Odds Decline Following Tragic Death Of UK Lawmaker

Traders are still stunned by the dramatic move in risk assets during yesterday’s US session. As a reminder, at the lows for the day in the mid-morning Eastern Time, we saw the DAX at -1.81%, FTSE -1.13%, S&P500 -1.03%, US 10y yield 1.516% (lowest since August 2012) and GBPUSD 1.401. By the various closes these rallied to -0.59%, -0.27%, +0.31%, 1.580% and 1.420 respectively!

What changed?

Unfortunately it had everything to do with the death of Jo Cox, which as even Deutsche Bank admits, “while it seems insensitive to talk about markets in relation to this event, unfortunately this story heavily influenced them yesterday. Before this news came out the two phone polls that the market had been waiting for both came out in favour of ‘leave’ (Ipsos-Mori 53%/47% and Survation 45%/42%).” The reason: BBC eyewitness reports (later questioned) suggesting the killer shouted ‘put Britain first’. As a result, campaigning has been suspended for now and it’s unclear when it will get going again. As we first noted, the immediate outcome of the shooting was a rumor that the Brexit vote next Thursday will be postponed, which in turn boosted “Remains” odds.

And, as Bloomberg also puts it, “Sterling rebounded from a two-month low as an opinion poll on voter intentions in next week’s referendum was delayed.

Odds on the U.K. leaving the EU slid to 38 percent after hitting a record 44 percent on Thursday, according to Oddschecker calculations based on bookmakers’ quotes. “If you do see uncertainty, that typically will drive voters to the status quo,” said Karl Schamotta, director of foreign-exchange research and strategy in Toronto at Cambridge Global Payments, which hedges currencies for companies. “We’re seeing a trade that’s entirely too crowded — at the end of the day, the market expectation remains that we will see a stay vote.”

In short, as Bloomberg, DB and Reuters all admit, the tragic death of Jo Cox had a morbidly levitating effect on all risk assets.  “The halt in campaigning may just take Brexit off the headlines momentarily, and that may have given an opportunity to just to see a little bit of a retracement in a comparatively quieter environment,” said Orlando Green, a rates strategist at Credit Agricole SA’s corporate and investment-banking unit in London. “We’ll see a choppy environment as we head toward the referendum.”

Ten-year bonds in Japan and the U.K. declined for the first time in more than a week. Global stocks rebounded from a four-week low and commodities advanced with the pound as campaigning in Britain’s referendum on European Union membership was suspended for a second day. Oil rose, paring its biggest weekly decline in more than two months. 

German bonds fell for the first time in four days, ending a three-day rally that pushed the yield into negative territory for the first time. The yield was near-zero, from minus 0.02 percent on Thursday. Similar-maturity U.K. debt snapped an eight-day run of gains. Spanish and Italian debt rallied as investors snapped up higher-yielding assets.

Japan’s 10-year bonds fell for the first time in seven days, lifting their yield by five basis points to minus 0.15 percent. It sank to a record minus 0.21 percent in the last session as the BOJ said inflation in the nation may be zero or negative. The rate on similar-maturity bonds in Australia climbed eight basis points to 2.09 percent, after slipping below 2 percent for the first time on Thursday. U.S. Treasuries due in a decade fell, lifting their yield by two basis points to 1.60 percent. It touched 1.52 percent in the last session, the lowest intraday level since August 2012, after the Fed on Wednesday lowered its projections for the path of policy tightening.

As a reminder, it is not just sterling: “With Brexit risks an important driver of currencies in the near term, dollar-yen can track lower next week,” said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia. “That raises the risk the Ministry of Finance may intervene to stem the recent rapid gains in the yen.” As Shunichi Otsuka, general manager of research and strategy at Ichiyoshi Securities, added “The dollar-yen market has calmed somewhat,” said “We’ll probably see a rebound from the steep fall yesterday. The fact that U.S. shares have risen is also a tailwind for Japanese equities.”

Meanwhile, while it may very well not last and all of yesterday’s gains could evaporate instantly if David Cameron announces that the Brexit vote will take place as scheduled, while polling remains unchanged from before Jo Cox’s tragic death, all 10 industry groups in the MSCI All-Country World Index advanced, with the index of global equities rising 0.7% trimming the week’s drop 1.6%. The Stoxx Europe 600 Index rose 1.4%. European lenders rallied the most, buoyed by Italian banks. Futures on the S&P 500 were little changed, after equities Thursday snapped their longest losing streak since February.

Meanwhile, the biggest event earlier in the week, the FOMC rate hike decision, is now all but ancient history: the odds of a move on borrowing costs have fallen to 4 percent for July and less than 40 percent for as late as February 2017, after the Federal Reserve this week scaled back its projections for increases.

Global Market Snapshot

  • S&P 500 futures down less than 0.1% to 2070
  • Stoxx 600 up 1.7% to 327
  • FTSE 100 up 1.5% to 6039
  • DAX up 1.3% to 9679
  • S&P GSCI Index up 0.9% to 371.2
  • MSCI Asia Pacific up 0.6% to 126
  • Nikkei 225 up 1.1% to 15600
  • Hang Seng up 0.7% to 20170
  • Shanghai Composite up 0.4% to 2885
  • S&P/ASX 200 up 0.3% to 5163
  • US 10-yr yield up 3bps to 1.61%
  • German 10Yr yield up 3bps to 0.01%
  • Italian 10Yr yield down 3bps to 1.51%
  • Spanish 10Yr yield down 3bps to 1.57%
  • Dollar Index down 0.16% to 94.42
  • WTI Crude futures up 1.1% to $46.71
  • Brent Futures up 1.6% to $47.93
  • Gold spot up 0.5% to $1,285
  • Silver spot up 1.1% to $17.39

Top Headline News

  • Brexit Campaign on Hold for Second Day After Lawmaker Murder: Labour’s Jo Cox was shot dead in northern England on Thursday
  • Oracle’s Revenue Exceeds Estimates on Strength of Cloud Products: rev. in cloud forecast to increase 75%-80% in quarter
  • Revlon Seeks to Revive Cosmetics Clout With Elizabeth Arden Deal: the $14-a-share deal values Elizabeth Arden at ~$870m when debt is included
  • Redstone Family Reclaims Control of Viacom in Slow Motion: Redstone’s holding co. replaced 5 Viacom board members; Delaware court to decide on move’s legality in coming months
  • Found to Have Violated Chinese Rival’s Patent: Apple may have to halt sales of its latest iPhones in Beijing, the city’s intellectual property authority ruled.
  • Salesforce Said to Have Been Rival Suitor for LinkedIn: Microsoft agreed to buy networking website for $26.2b
  • Lumber Liquidators Settles With Regulator; No Product Recall: CPSC says testing showed no unsafe levels of formaldehyde
  • Allianz Sees Pimco Hiring in Pivot From Bill Gross’s Former Fund: board member Theis cites potential in alternative investments; insurer’s U.S. unit cut jobs Thursday after decline in assets
  • UFC Said to Get Bids of ~$4.1b From WME/IMG, CMC Groups: ESPN

Looking at regional markets, Asia equity markets traded higher following the positive lead from the S&P500 in which US equities snapped its 5-consecutive day of declines. Nikkei 225 (+1.1) outperformed on bargain-buying following yesterday’s BoJ-triggered 3% drop, with a rebound in USD/JPY from its lowest level since August 2014 underpinning exporter sentiment. ASX 200 (+0.3%) was led by Financials after reports ANZ is considering the sale of its wealth and life units, although gains were capped by commodity weakness. Elsewhere, Chinese markets conformed to the positive picture in the region w