Thursday, November 02, 2017 6:49:56 AM
Morning Data
Nov 1/Silver is the star of the day:up 2.8% or 48 cents/A London based company is the first major trading company to be dinged with “ghost collateral” coming from China/gold up $6.60/at the comex we have continual queue jumping in both gold and silver/Powell to be the next Fed Chair/
November 1, 2017 · by harveyorgan · in Uncategorized · 3 Comments
GOLD: $1276.60 UP $6.60
Silver: $17.18 UP 48 cents
Closing access prices:
Gold $1275.00
silver: $17.13
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1283.60 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1269.60
PREMIUM FIRST FIX: $14.00(premiums getting larger)
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SECOND SHANGHAI GOLD FIX: $1297.34
NY GOLD PRICE AT THE EXACT SAME TIME: $1274.50
Premium of Shanghai 2nd fix/NY:$22.84 PREMIUMS GETTING LARGER)
CHINA REJECTS NEW YORK PRICING OF GOLD!!!!
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LONDON FIRST GOLD FIX: 5:30 am est $1279.25
NY PRICING AT THE EXACT SAME TIME: $1279.00
LONDON SECOND GOLD FIX 10 AM: $1277.05
NY PRICING AT THE EXACT SAME TIME. 1273.30 ??
For comex gold:
NOVEMBER/
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 186 NOTICE(S) FOR 18,600 OZ.
TOTAL NOTICES SO FAR: 709 FOR 70,900 OZ (2.205TONNES)
For silver:
NOVEMBER
140 NOTICE(S) FILED TODAY FOR
700,000 OZ/
Total number of notices filed so far this month: 567 for 2,835,000 oz
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Bitcoin: $6517 bid /$6527 offer up $86.00 (MORNING)
BITCOIN CLOSING;$6581 BID:6601. OFFER UP $146.00
end
Today gold had a pretty good day rising by $6.60 but it was silver that was star of the show rising by 48 cents or 2.8%. This time around silver rose for no apparent reason. It is obvious that its huge 196,000 short comex contracts are having its effect on our bankers. As I have outlined to you for the past few months, the banks are desperate trying to cover but to no avail. They have en masse decided to run to higher ground where they will regroup and try again. If the silver price runs away from them like the Bitcoin price, our banker friends will implode.
Let us have a look at the data for today
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In silver, the total open interest ROSE BY A LARGE SIZED 2419 contracts from 196 ,434 UP TO 198,853 DESPITE YESTERDAY’S TRADING IN WHICH SILVER FELL BY 13 CENTS. THE CROOKS ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS SO THEY CONTINUE TO TORMENT.
RESULT: A GOOD SIZED RISE IN OI COMEX WITH THE 13 CENT PRICE LOSS. OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFALL.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.993 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 140 NOTICE(S) FOR 700,000 OZ OF SILVER
In gold, the open interest SURPRISINGLY ROSE BY A CONSIDERABLE 2419 CONTRACTS DESPITE THE GOOD SIZED FALL IN PRICE OF GOLD ($6.15) . The new OI for the gold complex rests at 531,918.
NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT MONTH.
Result: A GOOD SIZED INCREASE IN OI DESPITE THE FALL IN PRICE IN GOLD ($6.15). THERE CERTAINLY WAS NO SHORT COVERING BY THE BANKERS WITH THE RAID YESTERDAY
we had: 186 notice(s) filed upon for 18,600 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD:
Strange! with gold up $6.60 today, we had a withdrawal of 1.18 tonnes of gold from inventory at the GLD/
Inventory rests tonight: 849.59 tonnes.
SLV
STRANGE: WITH SILVER DOING WELL THESE PAST THREE TRADING DAYS AND ESPECIALLY TODAY WITH A HUGE GAIN OF 48 CENTS, WE HAD NO DEPOSIT GAIN IN SILVER INVENTORY AT THE SLV:
INVENTORY RESTS AT 319.155 MILLION OZ
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver ROSE BY A HUGE 2419 contracts from 196,434 UP TO 198,853 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE FALL IN SILVER PRICE (LOSS OF 13 CENTS). OUR BANKERS WERE AGAIN UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF THEIR SILVER SHORTS.
RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 13 CENT LOSS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS . .NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.57 points or .08% /Hang Sang CLOSED UP 348.52 pts or 1.23% / The Nikkei closed UP 408.47 POINTS OR 1.86/Australia’s all ordinaires CLOSED UP 0.49%/Chinese yuan (ONSHORE) closed UP at 6.611/Oil UP to 55.01 dollars per barrel for WTI and 61.48 for Brent. Stocks in Europe OPENED IN THE GREEN . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.611. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6112 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea//
b) REPORT ON JAPAN
c) REPORT ON CHINA
i)The ghost collateral that we wrote about in 2014 is finally beginning to haunt traders. The first one to take a huge hit on lack of collateral financing trade is London based E D and F Man Company who is now caught with a phony warehouse receipt from China.
(courtesy zerohedge)
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
Iceland
Iceland’s biggest volcano is set to erupt after the area had many earthquakes disturbing the caldera. The huge amount of eruption could could damage to flights over the area
(Mac Slavo/SHFTPlan.com)
7. OIL ISSUES
Yesterday’s report on the API showed a huge drawdown. Today’s DOE showed little draw down and that disappointed our bulls in oil and gasoline.
( zerohedge)
8. EMERGING MARKET
Venezuela’s annual rate of inflation is a cool 2875%
( Steve Hanke)
9. PHYSICAL MARKETS
i)Once the crooks are able to use bitcoin futures, you can bet that they will cause crypto prices to crumble
( CNBC/GATA)
ii)Question; how did the Royal Bank of Canada purchase a gold bar without testing it?
( CBC/GATA)
iii)Retail sales of gold has been dismal in the west as bitcoin seems to have replaced gold as a safe haven. However Eastern nations are taking up the slack and buying gold hand over fist
( zerohedge)
iv)Turkey’s gold imports surged by 13.8 billion dollars (350 tonnes) this year.
(Sharp’s Pixley)
v)Now German Investors are now flocking into gold
(Simon Osborne /EXPRESS CO UK)
vi)Now Iran is preparing its infrastructure to accept Bitcoin adoption
(courtesy zerohedge)
10. USA Stories
i)FOMC statement, policy unchanged as growth moves to solid from moderate( zerohedge)ii)Private ADP showed a huge jump in payrolls of 235,000 in the post hurricane rebound( ADP)iii)Wow!! The Atlanta Fed now sees the 4th quarter GDP running at a blistering pace of 4.5% due to the huge increase in consumer spending.( zerohedge)
iv)The Fed’s balance sheet instead of falling by 10 billion it rose by 5 billion with one day left to report:
( zerohedge)
v)Trump should like this: USA PMI rises but Mexico’s PMI collapses
( zerohedge)
vi)Obama proposes repealing the Obamacare individual mandate to pay for the tax cuts. That will anger the democrats and some Republicans as well
( zerohedge)
vii)The following is a must read as Stockman explains to us the ridiculousness of the charges and conviction on Baby George Papadopulous for lying to the FBI on a date which was totally frivolous. Now you will understand the deep state and how it operates!!
a must read..
(David Stockman)
viii)Faced with another sex crime investigation, it seems that the former Weinstein Company Studio is hurtling towards bankruptcy
( zerohedge)
ix)Kentucky is in such a bad state of affairs with respect to its public pensions. Now the Kentucky teachers blast authorities who are planning to reform the plan. If they do not reform then the pension plan will go bust
( zerohedge)
x)I am not buying the strength of the market. Today sales are really lacklustre with General Motors inventory starting to tick upwards
( zerohedge)
Let us head over to the comex:
The total gold comex open interest SURPRISINGLY ROSE BY A CONSIDERABLE 3,459 CONTRACTS UP to an OI level of 531,918 DESPITE THE FALL IN THE PRICE OF GOLD ($6.15 FALL IN YESTERDAY’S TRADING). IT SEEMS THAT WE GOT SOME NEWBIE LONGS ENTERING THE ARENA AND WITHOUT A DOUBT WE HAD ZERO SHORT COVERING BY THE BANKERS.
NO EFP’S WERE ISSUED FOR NOVEMBER YESTERDAY.
HERE IS A SUMMARY OF EFP’S ISSUED TO LONGS IN EACH OF THE PAST 3 MONTHS:
The amount of EFP’s issued for each of the past 3 months at month’s end;
Sept: 6500
Oct 7200
Nov: 8500
Result: a GOOD SIZED open interest INCREASE WITH THE RISE IN THE PRICE OF GOLD ($5.30.)
.
We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF ONLY 338 CONTRACTS DOWN TO 272. We had 523 notices filed upon yesterday so surprisingly we again gained 185 contracts or 18,500 additional oz will stand for delivery in this non active month of November. TO SEE BOTH GOLD AND SILVER RISE IN AMOUNT STANDING (QUEUE JUMPING) IS A GOOD INDICATOR OF PHYSICAL SHORTNESS FOR BOTH OF OUR PRECIOUS METALS.
The very big active December contract month saw it’s OI LOSE 5790 contracts DOWN to 376,939. January saw its first open interest of 14. FEBRUARY saw a gain of 9039 contacts up to 93,780.
.
We had 186 notice(s) filed upon today for 18,600 oz
VOLUME FOR TODAY (PRELIMINARY) 292,195
CONFIRMED VOLUME YESTERDAY: 271, 486
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And now for the wild silver comex results. Total silver OI ROSE BY a huge 2341 CONTRACTS FROM 196,434 UP TO 198,775 DESPITE YESTERDAY’S 13 CENT LOSS IN PRICE. WE HAD ZERO BANKER SHORT COVERING AS THE CROOKS TRIED AND FAILED IN THEIR ATTEMPT TO LOOSEN ANY SILVER LONGS FROM THE SILVER TREE. NO SILVER EFP’S WERE ISSUED FOR NOVEMBER.
The new front month of November saw its OI fall by 214 contracts and thus it stands at 379. We had 427 notices served upon yesterday so we gained 213 contracts or an additional 1,065,000 oz will stand in this non active month of November. After November we have the big active delivery month of December and here the OI rose by 968 contracts down to 141,978. January saw NO gain contracts REMAINING AT 685.
We had 140 notice(s) filed for 700,000 oz for the OCT. 2017 contract
INITIAL standings for NOVEMBER
Nov 1/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
17,143.123
oz
International Delaware
JPMorgan
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
nil oz
No of oz served (contracts) today
186 notice(s)
18,600 OZ
No of oz to be served (notices)
86 contracts
(8600 oz)
Total monthly oz gold served (contracts) so far this month
709 notices
70,900 oz
2.205 tonnes
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
Today we HAD 0 kilobar transaction(s)/
WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer deposit(s):
total customer deposits nil oz
We had 2 customer withdrawal(s)
i) Out of International Delaware: 9066.30 oz
ii) Out of JPMorgan: 7666.293 oz
total customer withdrawals; 17,143.123 oz
we had 0 adjustment(s)
For NOVEMBER:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 140 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 14 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
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To calculate the INITIAL total number of gold ounces standing for the NOVEMBER. contract month, we take the total number of notices filed so far for the month (709) x 100 oz or 70900 oz, to which we add the difference between the open interest for the front month of NOV. (258 contracts) minus the number of notices served upon today (140 x 100 oz per contract equals 79,500 oz, the number of ounces standing in this NON active month of NOV
Thus the INITIAL standings for gold for the NOVEMBER contract month:
No of notices served (709) x 100 oz or ounces + {(272)OI for the front month minus the number of notices served upon today (140) x 100 oz which equals 79,500 oz standing in this active delivery month of NOVEMBER (2.472tonnes)
SOMEBODY IS IN GREAT NEED OF PHYSICAL GOLD.
WE GAINED 18,500 OZ OF GOLD STANDING!!
.
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Total dealer inventory 553,576.101 or 17.218 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,690,034.600 or 270.23 tonnes
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
IN THE LAST 14 MONTHS 83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE NOVEMBER DELIVERY MONTH
NOVEMBER FINAL standings
Nov 1/ 2017
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory
nil oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
nil
oz
No of oz served today (contracts)
140 CONTRACT(S)
(700,000,OZ)
No of oz to be served (notices)
239 contract
(1,195,000 oz)
Total monthly oz silver served (contracts) 567contracts
(2,835,000 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 xx oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWAL nil oz
We had 0 Customer deposit(s):
***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: nil oz
we had 0 adjustment(s)
The total number of notices filed today for the NOVEMBER. contract month is represented by 140 contracts FOR 700,000 oz. To calculate the number of silver ounces that will stand for delivery in NOVEMBER., we take the total number of notices filed for the month so far at 567 x 5,000 oz = 2,835,0000 oz to which we add the difference between the open interest for the front month of NOV. (379) and the number of notices served upon today (140 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the NOVEMBER contract month: 567 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(379) -number of notices served upon today (140)x 5000 oz equals 4,030,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.
We gained a whopping 213 contracts or an additional 1,065,000 oz will stand for metal in the non active delivery month of November
ESTIMATED VOLUME FOR TODAY: 77,073
CONFIRMED VOLUME FOR YESTERDAY: 65176 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 65,176 CONTRACTS EQUATES TO 326 MILLION OZ OR 46.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER
Total dealer silver: 44.005 million (close to record low inventory
Total number of dealer and customer silver: 225.904 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott and Central Fund of Canada
will update later tonight
1. Central Fund of Canada: traded at Negative 2.1 percent to NAV usa funds and Negative 2.0% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.4%
cash .+.3%( Nov 1/2017)
will update Sprott funds later tonight.
2. Sprott silver fund (PSLV): STOCK RISES TO -0.77% (Nov 1 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.68% to NAV (Nov 1/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.77%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.68%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
(courtesy Sprott/GATA)
Sprott Inc. to take control of rival gold holder Central Fund of Canada
by THE CANADIAN PRESS
Posted Oct 2, 2017 8:43 am PDT
Last Updated Oct 2, 2017 at 9:20 am PDT
TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.
Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.
The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.
Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.
In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.
Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.
END
And now the Gold inventory at the GLD
Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes
OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes
Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES
Oct 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES
Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES
OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES
oCT 19/NO CHANGE/853.13 TONNES
Oct 18 /no change in gold inventory at the GLD/ inventory rests at 853.13 tonnes
Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
Oct 16/A HUGE WITHDRAWAL OF 5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES
0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES
Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES
Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES
oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT 854.30 TONNES
Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES
SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes
Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES
Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/
Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes
Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes
Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.
Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes
Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes
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Nov 1/2017/ Inventory rests tonight at 849.59 tonnes
*IN LAST 263 TRADING DAYS: 91.36 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 198 TRADING DAYS: A NET 65.92 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 34,81 TONNES HAVE BEEN ADDED.
end
Now the SLV Inventory
Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz
Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/
Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/
oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/
OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ
oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ
Oct 18 no change in silver inventory at the SLV/inventory rest at 322.271 million oz
Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ
Oct 16/ NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ
oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/
Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ
Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ
Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ
OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z
Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615 MILLION OZ
Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ
SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/
Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/
Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ
Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz
Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/
Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/
Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz
Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz
Nov 1/2017:
Inventory 319.155 million oz
end
6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration
+ 1.39%
12 Month MM GOFO
+ 1.60%
30 day trend
end
Major gold/silver trading/commentaries for WEDNESDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
Invest In Gold To Defend Against Bail-ins
By janskoylesNovember 1, 20170 Comments
– Italy’s Veneto banking meltdown destroyed 200,000 savers and 40,000 businesses
– EU bail-in rules have wiped out billions for savers and and businesses, with more at risk
– Bail-ins are not unique to Italy, all Western savers are at risk of seeing savings disappear
– Counterparty-free, physical gold bullion is best defence against bail-ins
One of Italy’s twenty regions is calling for more autonomy from the state following a nonbonding referendum. Why? Because a government supported ‘rescue package’ caused the lifesavings of 200,000 savers to be wiped out during the implosions of Popolare di Vicenza and Veneto Banca.
Since then the banks have been rescued in one way or another yet the impact of the collapse on individuals and small businesses is only just becoming clear.
As in Spain’s Catalonia the region of Veneto is wealthier than the average Italian region, with its own industries and language yet it has been left with a pile of ash when it comes to its banking sector.
The region is proud to be the home of successful brands such as Benetton, De’Longhi, Geox and Luxottica. But it is the 40,000 small businesses that are in a state of limbo unable to pay workers, find credit or operate on a day-to-day basis.
Sadly the case of Veneto is one of a growing list of regions of banking customers that have been destroyed due to the incompetence of national authorities and the overbearing powers of the EU.
Profitable businesses take the hit
What is seen is as surprising to many reading about the story of Veneto is that profitable, stable businesses are also suffering as a result of a banking collapse.
When someone’s savings are wiped out, that isn’t the end of the nightmare. Many businesses were exposed to those banks both through credit and shares.
Many businesses operate on credit. This happens in companies of all scales and levels of success. The businesses that borrowed from the two Veneto banks are now in a state of limbo. They have no line of credit due to their exposure to the collapsed banks.
This is despite a government-led body stepping into help manage the fallout and finances of the ruined institutions. Bloomberg explains:
Even a perfect credit score is useless in Veneto now if your only collateral is stock in either bank, which were coveted investments for generations of locals.
Bail-in of the first resort
Italians are in very deep financially when it comes to their banking system. The 2015 IMF report states:
Retail holdings in Italy are relatively large compared to other countries, comprising about one- third of about €600 billion worth of bank bonds and half of about €60 billion worth of subordinated bonds.
That is all money that will just disappear overnight in the case of bank failure. In some cases, it already has.
In Italy a common problem has been that savers and businesses were persuaded to invest in subordinated (junior) bonds by their bank managers.
By 2015 over €31 billion of retail sub bonds had been sold to retail investors. Retail investors are ordinary savers and small businesses.
‘Households hold about one-third of senior bank debt and almost half of total subordinated bank debt.’ – IMF
These bondholders are seen as creditors. The same type of creditor that EU rules state must take responsibility for a bank’s financial failure, rather than the taxpayer. This is a bail-in scenario.
In a bail-in scenario the type of junior bonds held by the retail investors in the street is the first to take the hit. When the world’s oldest bank Monte dei Paschi di Siena collapsed ordinary people (who also happen to be taxpayers) owned €5 billion ($5.5 billion) of subordinated debt. It vanished.
A 2015 IMF study found that the majority of Italy’s 15 largest banks a bank rescue would ‘imply bail-in of retail investors of subordinated debt’. Only two-thirds of potential bail-ins would affect senior bond-holders.
Nothing will respect you like gold does
Why put so much faith in the bank? Because, despite many financial crises in the last 100 years, savers and businesses still believe their money will be safe.
The graph above shows just how much we still trust our banks. The least trusting country is Italy yet their exposure has been so great, imagine what damage will be done when the likes of the UK, US or Germany face a bail-in situation.
In Italy where banks have been around for literally hundreds of years, many family business owners are still dealing with bank accounts, investments and loans their ancestors organised a century ago.
This kind of relationship can lead to an almost Stockholm Syndrome situation. Despite receiving consistency bad treatment from your bank you want to support it and help it out. You still trust it. So when the bank suggests you hold shares then you take their advice.
“We jealously guarded those shares like you would gold bars,” A 60 year old baker told Bloomberg, “Buying your bank’s stock was the traditional thing to do. We got it badly wrong.”
Of course what everyone forgets is that banks are not there to look after you. They are there to make money. They do this almost instantly the second you deposit funds, it’s their money. The second you take out a loan, they own you. The second you buy shares, they have a license to be reckless.
Naively treating anything other than gold like gold is the first step in financial mismanagement. Nothing is like physical, allocated and segregated gold. For a start it is all yours.
Is your government or the EU there for you? Don’t bet on it
A bail-in forces creditors of a bank to shoulder losses when the firm fails. The term covers cover every case of creditor loss-sharing when a bank goes belly-up.
This is different to events we saw during the 2008 financial crisis when taxpayers tended to bail-out banks. Since 2016 European Union rules have stated there must be a bail-in before a government bailout is allowed.
Governments would clearly like to prevent savings of hardworking individuals and businesses from being wiped out. However they are fearful of the EU, trying to skirt their bail-in rules would no doubt sour relations with a body that is keen to stick to rules it only recently passed.
There is a conflict of interest it seems between pleasing the EU and doing the right thing by voters.
Given Brexit and now Catalonia the EU is unlikely to be in the mood to bend its rules for another troublesome country. This is despite it costing the EU’s own citizens billions of euros in lost savings and investments.
This is a risk for the EU, especially in Italy where there is already strong anti-EU sentiment. The case of Veneto, where 75% require more power and 15% would like to see total autonomous rule is another Catalonia again. A further sign of increased populism thanks to an overbearing and indifferent EU.
Invest in gold, or prepare to fail
Depositors and investors should be aware of their country’s requirements when it comes to keeping their money safe in the banks. Whilst bail-ins will at present only hurt those who hold deposits above EUR 100,000, there is little stopping the protected amount being decreased, or ignored altogether.
For those living in the EU, the European Commission has forced all 28 countries to implement bail-in legislation. This means depositors must be more vigilant than ever about the health of a particular bank, and the risk exposure of their portfolio. This means diversifying your invesments and decreasing the level of counterparty exposure.
One area of portfolio diversification that is growing due to concerns over the safety of bank accounts, is gold investment which saw a 15% climb in Q2 of 2016. Europe, in 2015, showed the largest regional demand for gold bars and coins (an increase of 12% year on year).
Unallocated gold is as much at risk as any other asset exposed to counterparties. Savers and businesses can protect their wealth by investing in allocated gold, in segregated accounts. This gives your outright legal ownership. There are no counterparties who can pop along after going bust and take what is legally theirs. It cannot be made to disappear overnight.
Gold is the financial insurance against bail-ins, political mismanagement and overreaching government bodies.
Read our guide on how to protect yourself from bail-ins here
News and Commentary
Gold logs a 1.1% monthly loss in October (MarketWatch.com)
Gold falls as dollar recovers, Fed chair in focus (Reuters.com)
Small Caps Lead U.S. Stocks Higher as Dollar Gains (Bloomberg.com`)
Consumer confidence climbs to a nearly 17-year high in October (MarketWatch.com)
CME to launch bitcoin futures in fourth quarter subject to approvals (Reuters.com)
Credit: Wall Street Journal
Gold vs. Bitcoin: Goldman Sachs Weighs In (DailyReckoning.com)
Why Is Bitcoin a Big Deal? (CharlesHughSmith)
One Misstep Now Would Cost the Bank of England Its Credibility (Bloomberg.com)
Britain accelerates Brexit plans, divorce talks also to speed up (Reuters.com)
China has grand ambitions to dethrone the dollar. It may make a powerful move this year (CNBC.com)
Gold Prices (LBMA AM)
01 Nov: USD 1,279.25, GBP 961.48 & EUR 1,099.52 per ounce
31 Oct: USD 1,274.40, GBP 964.21 & EUR 1,095.60 per ounce
30 Oct: USD 1,272.75, GBP 966.91 & EUR 1,093.80 per ounce
27 Oct: USD 1,267.80, GBP 968.35 & EUR 1,090.18 per ounce
26 Oct: USD 1,278.00, GBP 968.34 & EUR 1,082.34 per ounce
25 Oct: USD 1,273.00, GBP 964.81 & EUR 1,081.67 per ounce
Silver Prices (LBMA)
01 Nov: USD 16.94, GBP 12.74 & EUR 14.55 per ounce
31 Oct: USD 16.82, GBP 12.72 & EUR 14.45 per ounce
30 Oct: USD 16.74, GBP 12.69 & EUR 14.39 per ounce
27 Oct: USD 16.72, GBP 12.76 & EUR 14.38 per ounce
26 Oct: USD 16.97, GBP 12.84 & EUR 14.37 per ounce
25 Oct: USD 16.89, GBP 12.75 & EUR 14.34 per ounce
Recent Market Updates
– Stumbling UK Economy Shows Importance of Gold
– Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Russia Buys 34 Tonnes Of Gold In September
– Gold Will Be Safe Haven Again In Looming EU Crisis
– Gold Is Valuable Due to “Extreme Rarity” – Must See CNN Video
– Gold Is Better Store of Value Than Bitcoin – Goldman Sachs
– Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash
– Key Charts: Gold is Cheap and US Recession May Be Closer Than Think
– Gold Up 74% Since Last Market Peak 10 Years Ago
– How Gold Bullion Protects From Conflict And War
– Silver Bullion Prices Set to Soar
– Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures
– Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver
END
Once the crooks are able to use bitcoin futures, you can bet that they will cause crypto prices to crumble
(courtesy CNBC/GATA)
So long, cryptos: CME Group plans bitcoin futures
Submitted by cpowell on Tue, 2017-10-31 13:53. Section: Daily Dispatches
Presumably governments and central banks will get volume trading discounts from CME Group on the new futures contracts as they do with the current ones:
http://www.gata.org/node/14385
http://www.gata.org/node/14411
* * *
CME Plans to Launch Bitcoin Futures by Year-End
By Evelyn Cheng
CNBC, New York
Tuesday, October 31, 2017
CME announced today that it plans to launch bitcoin futures in the fourth quarter of the year, pending regulatory review.
“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” Terry Duffy, CME Group chairman and chief executive officer, said in a statement:
http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_a…
In Augus, the Chicago Board Options Exchange, the largest U.S. options exchange, said its CBOE Futures Exchange plans to offer cash-settled bitcoin futures in the fourth quarter of this year or in early 2018, pending review from the U.S. Commodity Futures Trading Commission. …
… For the remainder of the report:
https://www.cnbc.com/2017/10/31/cme-plans-to-launch-bitcoin-futures-by-y…
end
Question; how did the Royal Bank of Canada purchase a gold bar without testing it?
(courtesy CBC/GATA)
Fake gold wasn’t ours, Royal Canadian Mint says
Submitted by cpowell on Wed, 2017-11-01 01:37. Section: Daily Dispatches
From Canadian Broadcasting Co. News, Ottawa
Tuesday, October 31, 2017
http://www.cbc.ca/news/canada/ottawa/fake-gold-not-ours-mint-says-1.4380…
A gold bar purchased in Ottawa that turned out to contain no gold did not come from the Royal Canadian Mint, the Crown corporation said today.
The mint’s statement came the day after CBC News reported that tests showed the 1-ounce gold bar, purchased last month by an Ottawa jeweler from a Royal Bank branch in the Glebe, indicated it contained none of the precious metal.
The bar was stamped with the Royal Canadian Mint’s insignia and the packaging it came in bore the mint’s name.
But the mint said it didn’t originate there.
“The Mint did not manufacture, ship, or sell the above-mentioned product,” the mint said. The mint complained the discovery and subsequent news report “has raised unfounded speculation as to the origins of the counterfeit and the purity of Royal Canadian Mint bullion products.
“Counterfeiting of Royal Canadian Mint products is extremely rare and this is an isolated case,” the statement continued. “We take suspicion of counterfeit seriously and work with law enforcement to support their investigations.”
According to the statement, the mint tests all its gold products to ensure they’re 99.99 per cent pure.
But despite the mint’s claim that counterfeits are rare, a quick internet search shows such products abound.
For example, the online retailer Wish.com offers what it describes as a “Canadian Gold Bar 1 OZ .9999 Premium Gold” for a price of $13 plus shipping.
The bar shown also bears the stamp of the Royal Canadian Mint.
“It boils down to product knowledge,” said veteran coin collector Sean Isaacs. “And the first line of defense is knowing what you’re dealing with.”
Calling it a “critical, frontline tool” for the bullion and coin dealer, Sean Isaacs said he paid about $1,100 for his Sigma Analytics precious metal verifier.
The verifier works by analyzing the conductivity of precious metals such as silver and gold.
Isaacs said a reliable verifier is something every bank dealing in precious metals should have on hand.
“The average teller at a bank I don’t think has the training to recognize those [counterfeit] products, which is why, in my opinion, you either need a tool to allow you to do that, or the product knowledge to know what you’re handling.”
RBC spokesperson Anika Reza confirmed today the incident is being investigated internally but wouldn’t say if the bank is making changes to how it handles and verifies bullion.
Isaacs said the fake gold bar purchased in Ottawa last month probably wasn’t even made in Canada.
“It’s very likely produced overseas, as with the packaging,” he said. “It doesn’t help anyone when something like that turns up in the market, and particularly when it’s sold by a financial institution.”
Brian Bosse, an analyst with Murenbeeld & Co., a Toronto-based forecaster of gold prices for the mining and investment sectors, has the same concern.
Bosse said if it’s learned that more of the counterfeit bars are in circulation, the result would be a chill on the gold market.
“This is not a one-off. Nobody does this once. The real question is: How did this get into RBC’s inventory?”
Bosse said most buyers never question the authenticity of gold bars purchased from banks.
“They know they bought it from a bank, so they’re sure that it’s good. But that concept is now under attack if there’s more than one of these out there.”
end
Retail sales of gold has been dismal in the west as bitcoin seems to have replaced gold as a safe haven. However Eastern nations are taking up the slack and buying gold hand over fist
(courtesy zerohedge)
“It’s Been Dismal” – Gold Coin Sales Slump As ‘Bugs’ Bounce To Bitcoin
Gold prices are rallying, but retail gold dealers and shops are struggling to survive.
As The Wall Street Journal reports, businesses that sell gold coins and other products made from the precious metal usually thrive during years like 2017.
Gold futures have gained more than 10%, boosted by a weaker dollar and by big investors looking for a haven during recent geopolitical tensions surrounding North Korea and Iran.
But despite higher bullion prices and solid demand from not-American-central banks, American Eagle Coin sales by the US Mint in October 2017 are down 87% YoY for gold and down 73% YoY for silver…
h/t @Gloeschi
The weak demand is taking a toll on gold dealers, some of whose sales have dropped as much as 70% compared with last year, according to Jeffrey Christian, managing partner at market-research firm CPM Group.
“It’s been absolutely dismal,” said Peter Thomas, senior vice president of metals at Zaner Precious Metals, a Chicago precious-metals dealer.
“A lot of guys have been really hurting.”
And as WSJ notes, one reason for the declining business: A number of retail buyers are turning to cryptocurrencies like bitcoin to store money during periods of stress, some analysts say.
Bitcoin has “taken some of the dedicated interest in gold away from gold,” said Mohamed El-Erian, chief economic adviser at Allianz SE, who warned at a CME Group event in September that cryptocurrencies could pose a long-term threat to the precious metal.
While gold buyers historically have looked to the precious metal as a place to hide during a market selloff, some suggest that virtual currencies are a new “hedge against chaos.”
Mr. Thomas of Zaner Precious Metals said authorized gold purchasers who buy directly from the U.S. Mint have been getting hurt, too, because of waning dealer demand.
“They end up having to stockpile coins,” he said.
“You would expect gold to be rocking at the present time, but it’s not,” said Ross Norman, head of London-based gold dealer Sharps Pixley.
Furthermore, small investors appear to be getting gold exposure though ETFs with more than $8.5 billion flowing into State Street’s gold ETF, the largest gold ETF, since the end of 2015, reversing three years of net outflows and marking the biggest period for inflows since 2009, according to FactSet.
Jim Rickards (and Goldman) recently opined on the Bitcoin vs Gold debate…
From my perspective, you might as well discuss gold versus watermelons or bicycles versus bitcoin. In other words, it’s a phony debate. I agree that gold and bitcoin are both forms of money, but they go their own ways.
There’s no natural relationship between the two (what traders call a “basis”).
The gold/bitcoin basis trade does not exist. But people love to discuss it, and I guess Goldman Sachs is no different.
Goldman Sachs has released a new research report that comes down squarely on the side of gold as a reliable store of wealth rather than bitcoin, which is untested in market turndowns.
Precious metals like gold are “neither a historic accident or a relic,” said the report.
It affirmed that gold is more durable than cryptocurrencies because cryptocurrencies are vulnerable to hacking, government regulation and infrastructure failure during a crisis.
Goldman also reminds us that gold holds its purchasing better than cryptocurrencies and has much less volatility. In dollar terms, bitcoin has had seven times the volatility of gold this year.
Since Goldman’s research department has not been notable as a friend to gold, the fact that they favor gold over bitcoin is highly revealing in more ways than one.
I don’t deny that bitcoin has made some people multimillionaires, but I also believe it’s a massive bubble right now.
I don’t own any bitcoin and I don’t recommend it. My reasons have to do with bubble dynamics, potential for fraud and the prospect of government intrusion.
So bitcoin evangelists seem to think I’m a technophobe. But I’ve read many bitcoin and blockchain technical papers. I “get it” when it comes to the technology.
I even worked with a team of experts and military commanders at U.S. Special Operations Command (USSOCOM) to find ways to interdict and disrupt ISIS’ use of cryptocurrencies to fund their terrorist activities.
I will say, however, that I believe in the power of the technology platforms on which the cryptocurrencies are based. These are usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.
So although I am a bitcoin skeptic, I believe there is a great future for the blockchain technology behind them.
I’m not telling anyone not to own cryptocurrencies, but you need to do your homework before you do.
* * *
Finally, this gentlement seems to sum up the general perspective…
“You can’t be parked in gold,” said Casey Frazier, a government administrator in Woodstock, Conn., who used to hold nearly a third of his savings in gold.
He has moved some of his money into the booming stock market, and now his precious-metals allocation is down to 10%.
end
Turkey’s gold imports surged by 13.8 billion dollars (350 tonnes) this year.
(Sharp’s Pixley)
Turkey gold imports surge as central bank boosts reserves November 01 2017
Turkey purchased a record $13.8bn of gold from abroad this year, $9.8bn more than in the same period last year, Bloomberg reported. The central bank has also increased its gold holdings to a three-year high, boosting its vault of precious metals by $7.5bn since December, according to official figures. The central bank’s action comes after President Recep Tayyip Erdogan called for Turks to use gold instead of dollars last November, in an effort to stem the depreciation in the Turkish lira, which has dropped another 7% against the dollar this year.
-END-
LAWRIE WILLIAMS:
Chinese demand from its citizenry up 15%
Chinese gold demand up over 15% YTD
Perhaps the biggest unknown in assessing global gold consumption in this, or any, year is the true level of Chinese gold consumption. The major analytical consultancies like Metals Focus, GFMS and CPM Group all tend to come up with Chinese gold consumption figures based on relatively narrow definitions of demand. Yet these figures tend to be substantially lower than known gold imports from those countries which break these down in their own export statistics. We have preferred to measure Chinese demand by Shanghai Gold Exchange withdrawal numbers, which tend to be far closer to the known Chinese gold import figures, plus China’s own gold production with an allowance for an element of scrap supply. The consultancies will all come up with a variety of often different reasons why SGE withdrawals are not representative of true Chinese demand – but we’ll stick to them as our measure given their correlation to known gold flows into mainland China.
On our latest assessment – see: Chinese SGE gold demand UP in September – demand as represented by SGE withdrawals is indeed running rather higher than a year ago, a fact that mow appears to be borne out by the latest figures from the China Gold Association. These suggest that in the nine months to end-September, Chinese demand for gold bars and jewellery was sharply higher than for the same period a year earlier. According to the Association consumption of gold bars went up 44.45% to 222.07 tonnes, while that for gold jewellery rose 7.44% to 503.87 tonnes with total consumption up 15.49% to 815.89 tonnes suggesting an annual total of well above 1,000 tonnes given demand tends to pick up ahead of The Chinese New Year.
Although the China Gold Association figures show a very positive increase in the nation’s gold consumption year- on-year, we still feel it falls well short of total gold flows into Chinese hands as represented by reported imports plus China’s own gold production – although the latter is seen as falling by some 3.76% over the first nine months of the year. The Association attributes the production fall on new rules to raise environmental requirements on solid waste from gold prospecting, leading to a wave of gold mine closures and output declines in the major producing provinces, including Shandong, Jiangxi and Hunan.
It will be interesting to see if the apparent increase in consumption is also reflected in the October SGE withdrawal figure – probably due out next week. October tends to be a short month for the SGE statistics as the exchange was closed for the Golden Week holiday – although this will have applied to previous years as well.
https://www.sharpspixley.com/articles/lawrie-williams- chinese-gold-demand-up-over-15-ytd_273439.html
end
Now German Investors are now flocking into gold
(Simon Osborne /EXPRESS CO UK)
Germany fears EUROZONE MELTDOWN: German investors rush to buy gold
GERMANY has become the world’s biggest buyer of gold amid fears of economic meltdown across the eurozone.
By SIMON OSBORNE
PUBLISHED: 08:25, Wed, Nov 1, 2017 | UPDATED: 09:40, Wed, Nov 1, 2017
German investors have developed a fondness for gold
Figures from the World Gold Council (WGC) reveal the country invested a record ú6billion in gold bullion and coins as well as in exchange-traded products.
Analysts say improved availability, low prices and growing demand due to loose monetary policy, economic uncertainty and volatile geopolitical factors are the three key reasons behind the German investors’s gold rush.
Their fondness for gold is a relatively recent development and before 2008 investment in physical gold barely registered with average annual demand at 17 metrics tons.
The country invested a record ú6bn in gold last year
But then the financial crisis struck and sparked a series of events that ultimately pushed many Germans into seeking a more reliable store of value.
A WGC report said: “While the world fretted about Lehman Brothers, German investors worried about the state of their own banking system.
“Landesbanks, the previously stable banking partners of corporate Germany, looked wobbly. People feared for their savings.”
Economic development in Germany has been strong over the past decade but investors have been very cautious about the risks to European financial and political systems.
Germany is now the world’s biggest buyer of gold
And the latest surge in demand for gold in Germany is being fuelled by fears of the economic impact of Brexit and Catalonian independence efforts, high public debt worldwide, successive bail-outs of Greece, fall-out from the migrant crisis and the resurgence of nationalist politics.
Low growth rates and productivity in some European Union regions and the lack of confidence in central banks have also contributed to the lure of gold.
The WGC report said while gold’s recent rise to popularity in Germany was sparked by financial and economic crises, it no longer needed those drivers to move forward.
It said: “Despite the dramatic growth in the past 10 years, we believe there is room for further growth.
“Though demand growth from institutional investors is uncertain, there is latent demand for gold among retail investors.
“Having made it easy for investors to buy bars and coins, retailers are also marketing them effectively.”
Video Link:
http://www.express.co.uk/news/world/873950/germany-fears- eurozone-meltdown-german-investors-buy-gold
-END-
Now Iran is preparing its infrastructure to accept Bitcoin adoption
(courtesy zerohedge)
Iran Is Preparing Infrastructure For Bitcoin Adoption
Amid rising speculation whether Catalonia will adopt some cryptocurrency should it follow through with plans for independence, and in the context of articles such as this from Vice that “Russia is going all in on bitcoin“, one country appears to be preparing to accept bitcoin as digital legal tender: Iran.
In an interview published last week with the Farsi newspaper Shargh, the Iranian Deputy Minister of Information and Communication Technology, Amir Hossein Davaee said that”The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country.”
He went on saying the crypto currency has two aspects: Economic and infrastructural. “We as the main center in Iran dealing with the country’s technology developments have taken very seriously the issue of preparing the infrastructure for the new currency.”
Quoted by the Iran Front Page, the Iranian official went on to say that such digital infrastructure is part of the soft power of each country and said entrance of the currency into Iran will end up in the general interests of the country. “Arrangements are being made with the related organizations to put together the infrastructure as early as possible.”
One reason for Iran’s eagerness to escape a dollar-denominated world is that as part of the original sanctions against the country four years ago, SWIFT removed Iran from its network, cutting off the country’s banking system from global networks and making dollar-denominated transactions impossible, in the process crippling Iran’s oil exports which only came online following Obama’s nuclear deal. Being locked out of US dollar commerce, Iran’s economy suffered for many years from financial sanctions which crippled the ability of local exporters and importers from working with international counterparts.
With US President Donald Trump taking a hostile approach to the Islamic republic, and with the Nuclear deal on the verge of collapse due to disagreements over the country’s nuclear and ballistic missile programs, it should come as no surprise that Iran is testing how to bypass possible new financial sanctions using Bitcoin, beyond merely local use.
* * *
Meanwhile, speaking at a Russia and China heads of government meeting on Wednesday, Russian Prime Minister Dmitry Medvedev said that the international financial system needs to balance which is why there is no place for a dominant currency, referencing the US dollar.
“The balanced system of financial relations should be based on the use of various reserve currencies, various forms of settlement. There should be no domination of any one currency,” Medvedev said, adding that no matter how strong the American economy, it also faces problems from time to time. “As a result, the entire financial world is shaken. A more balanced international financial system is better for everyone.”
According to Medvedev, Russia was pleased with the growing role of the Chinese yuan in global settlements, as it represents one of the world’s largest economies. In May, Russia and China established an investment fund worth 68 billion yuan ($10 billion).The countries also plan to extend the bilateral currency swap agreement for another three years. In 2014, Russia and China agreed on a 3-year ruble-yuan currency swap deal of up to $25 billion.
China has been pushing for a greater use of the yuan in oil settlements. As the country has become the largest oil importer overtaking the United States, it can now dictate rules, experts note. The chief economist and managing director at High Frequency Economics Carl Weinberg has predicted that “Chinese [oil] demand will dwarf US demand,” and Beijing is likely to “compel” Saudi Arabia to sell crude oil in yuan, a move to be followed by others. We discussed this last week, when we noted that China is expected to roll out a yuan-denominated oil contract, i.e. a “Petroyuan”, within the next two months.
end
Your early WEDNESDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED UP AT 6.611/shanghai bourse CLOSED UP AT 2.57 POINTS .08% / HANG SANG CLOSED UP 348.52 POINTS OR 1.23%
2. Nikkei closed UP 408.47 POINTS OR 1.86% /USA: YEN RISES TO 113.99
3. Europe stocks OPENED ALL GREEN /USA dollar index RISES TO 94.63/Euro DOWN TO 1.1639
3b Japan 10 year bond yield: FALLS TO +.061/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.72/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 55.01 and Brent: 61.48
3f Gold UP/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./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.372%/Italian 10 yr bond yield DOWN to 1.789% /SPAIN 10 YR BOND YIELD DOWN TO 1.459%
3j Greek 10 year bond yield FALLS TO : 5.411???
3k Gold at $1277.50 silver at:16.96: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 18/100 in roubles/dollar) 58.16
3m oil into the 55 dollar handle for WTI and 61 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (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 GOOD SIZED REVALUATION NORTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.99 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0006 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1641 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.372%
The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.
4. USA 10 year treasury bond at 2.390% early this morning. Thirty year rate at 2.889% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
World Stocks Soar To New Record Highs As Oil, Metals Surge Ahead Of The Fed
US equity futures have hit a new records, helped by surging Asian and European stocks which have all started November on a euphoric note. Surging commodity prices, optimism about tax reform and hope for a new dovish Fed chair all combined to drive global stock markets to record highs on Wednesday, with the MSCI’s world stock index climbing 0.3% to a fresh all time high. Mining stocks lead gains as nickel and other industrial metals soar. Oil rose above $55 a barrel for the first time since the start of the year in the longest winning streak in three months, on hopes that major producers would maintain their output cuts. The dollar firmed ahead of a Fed rate decision while bitcoin surged to a record high just under $6,600.
As Bloomberg summarizes in its Macro Squawk Wrap, equities globally extended gains as investors await Fed developments, with a rate decision due today and announcement of the next chair expected on Thursday. Euro Stoxx 50 futures advance for a third-straight day, while S&P 500 futures set fresh day highs in the European session. Treasury futures trade in tight ranges after earlier weakening; block trades emerge, consistent with selling of U.S. bonds and buying of German debt. U.K. Oct. manufacturing PMI beats estimates, buoying sterling and sending GBP/USD above 1.3300 for the first time in weeks. WTI futures climb above $55/bbl to hit highest level since January; base metals gain broadly as nickel futures trade limit up in Shanghai.
Among the proposed explanations for today’s melt up is that we are witnessing a compressed and accelerated version of the Halloween rally, as summarized in the following Robeco chart:
Whatever the reason, the buying today is unstoppable, with the European STOXX 600 index climbing to its highest level since August 2015 as stock markets in London, Paris and Frankfurt gained 0.5 to 1.2 percent in early trade. As a result, the Stoxx 600’s relative strength index has now climbed above 70, a level that indicates overbought conditions, for the first time in more than 2 weeks, and is heading for its highest level since Aug. 2015, led by cyclical sectors including miners, automakers and technology.
Europe’s jump followed a rally in Asia, where stock markets hit 10-year highs, with most of the 19 industry sectors rising. As of Tuesday’s close, 45 percent of MSCI Europe companies had reported results for the third quarter, of which 66 percent either beat or met expectations, according to Thomson Reuters I/B/E/S data. The U.K.’s FTSE 100 Index rose 0.3 percent to the highest in a week. Germany’s DAX Index increased 1.3 percent to the highest on record. DAX outperforms as German participants return to market from Reformation Day
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9%, led by a 1.3% jump in South Korea. South Korea’s economic growth accelerated to its fastest pace in seven years last quarter. Growth in Taiwan during the same period was the strongest in 2 1/2 years. Of note in Asia was Japan, where the stock meltup was most pronounced with the Nikkei rising nearly 2%, and the Topix index rising to the highest in more than a decade, buoyed by a weaker yen, as a surge in U.S. consumer confidence in October served as the latest confirmation of a global economic recovery ahead of a Federal Reserve policy decision on Wednesday. Electronics makers gave the biggest boost to the Topix as Sony jumped 11% to the highest level since June 2008 after lifting its annual operating profit outlook to a record, after the company announced record annual profit in 2017 owing to strong sales of semiconductors and favorable exchange rates. Tokyo Electron surged after posting results that beat expectations. The Nikkei 225 gained 5.5% in October, its strongest showing in 11 months. “Investors are gaining confidence as the global economy is solid,” said Masaaki Yamaguchi, an equity market strategist at Nomura Holdings Inc. in Tokyo. “Not only exporters but also domestic-demand-oriented companies are improving earnings.” “Business confidence and corporate earnings are good in the U.S., and business sentiment is improving globally,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “Stocks are inclined to rebound, with a series of good earnings results. There’s more room for high-tech related shares to rise.”
India’s benchmark equity indexes climbed to fresh records after a World Bank report showed it’s easier to do business in the nation. The S&P BSE Sensex rose 1.2% to 33,600.27 while the NSE Nifty 50 Index jumped 1% in Mumbai. Twelve of the 19 sectoral sub-indexes compiled by BSE Ltd. climbed, led by a gauge of telecom companies. Bharti Airtel Ltd. gained the most on the Sensex after the country’s largest wireless carrier said “reputed global investors” had expressed interest in buying a stake in its Bharti Infratel unit.
The dollar and Treasuries held steady ahead of a Federal Reserve decision expected to signal a rate rise is still in the cards for December. The New Zealand dollar surged after the country’s unemployment rate fell, while the yen led losses on reports Japan may plan for an increased budget and reappoint Bank of Japan Governor Haruhiko Kuroda. European stocks jumped to a two-year high. The dollar’s index against a basket of six major currencies stood at 94.60, down from last week’s three-month peak of 95.15. The euro was little changed at $1.1644, some distance from the three-month low of $1.1574 it touched on Friday after the European Central Bank’s stance was perceived to be more dovish than expected. The biggest currency mover was the New Zealand dollar. It jumped over 1 percent to $0.6931 after the country’s jobless rate sank more than expected to a nine-year low of 4.6 percent. Bitcoin hit another record high above 6,600, boosted by bets the crypto-currency might enter the financial mainstream after the world’s largest derivatives exchange operator said on Tuesday it would launch bitcoin futures. The yield on 10-year TSY rose 1bp to 2.39%. Germany’s 10-year yield also climbed 1 bp to 0.37% while Britain’s 10-year yield rose less than one basis point to 1.335%.
The Bloomberg Commodity Index climbed to the highest since March as WTI crude rose above $55 a barrel and industrial metals advanced, buoyed by optimism that demand from China won’t falter after a gauge of Chinese manufacturing suggested growth momentum remains robust. Nickel has been on a tear since Tuesday after Trafigura joined Glencore in revealing bullish forecasts because of the popularity of electric cars. Nickel sulphate is a key ingredient in lithium-ion batteries.
Meanwhile, in the US, Wall Street’s three main indexes, the Dow, S&P and Naz, ended October with their biggest monthly gains since February. The focus remains firmly on central banks. In the U.S., the Federal Reserve is expected to keep rates on hold Wednesday while signaling an all-clear for a December hike. An announcement on who will helm the U.S. central bank is due by the end of the week, with current board member Jerome Powell said to have the edge over the likely more hawkish John Taylor. The Bank of England will probably lift borrowing costs on Thursday for the first time in a decade.
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller. Former Trump adviser George Papadopoulos claimed campaign officials approved a pre-election meeting with Russian representatives. US House Tax Committee Chairman Brady said that after consultation with President Trump and leadership team, they have decided to postpone the tax plan release to Thursday. There were initial reports that GOP tax plan would delay repeal of estate tax and will have corporate taxes cut to 20% during the 1st year, according to sources. (WSJ) However, there were later conflicting reports that stated some House GOP Representatives were said to consider phasing out 20% corp. tax over a number of years
Elsewhere, bitcoin soared to a record after CME Group, the world’s biggest exchange operator, said it plans to launch futures trading on the cryptocurrency by year-end.
Economic events include Fed’s rate decision, manufacturing data from ISM and Markit. Companies reporting earnings include Facebook, Kraft Heinz, Qualcomm.
Bulletin Headline Summary from RanSquawk
Buoyant commodity prices and corporate earnings have help lift European bourses this morning
GBP failed to sustain gains in the wake of upbeat UK manufacturing PMI ahead of tomorrow’s BoE announcement
Looking ahead, highlights include ADP employment change, ISM manufacturing, DoEs and FOMC rate decision
Market Snapshot
S&P 500 futures up 0.4% to 2,583.00
STOXX Europe 600 up 0.6% to 397.40
MSCI Asia up 1% to 169.66
MSCI Asia ex Japan up 1% to 556.40
Nikkei up 1.9% to 22,420.08
Topix up 1.2% to 1,786.71
Hang Seng Index up 1.2% to 28,594.06
Shanghai Composite up 0.08% to 3,395.91
Sensex up 1.2% to 33,607.95
Australia S&P/ASX 200 up 0.5% to 5,937.77
Kospi up 1.3% to 2,556.47
German 10Y yield rose 0.3 bps to 0.366%
Euro down 0.03% to $1.1642
Brent Futures up 0.9% to $61.49/bbl
Italian 10Y yield fell 2.1 bps to 1.561%
Spanish 10Y yield fell 0.7 bps to 1.454%
Gold spot up 0.3% to $1,275.46
U.S. Dollar Index up 0.04% to 94.59
Top Headline News from Bloomberg
A suspected terrorist plowed a truck down a bicycle path in lower
Manhattan blocks from the site of the World Trade Center, killing eight
and seriously wounding several more before an officer shot and arrested
him
The biggest changes to the FOMC statement will probably come from an upgrade in its description of the U.S. economy. That would further cement the case for a move in December, though it’s unlikely that the committee will change the statement’s language to explicitly signal a rate hike; see FOMC decision day guide here
House tax writers pushed back the reveal of their highly guarded, long awaited tax bill by a day, a sign that disputes among Republican lawmakers are threatening their effort to pass comprehensive legislation by Thanksgiving
While an interest-rate hike by the BOE on Thursday is almost fully priced in, its nature is still in question, sending overnight volatility in cable to levels not seen since the Fed’s meeting in September
Caixin China October manufacturing purchasing managers’ index at 51, matching estimates and unchanged from September
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller
As investors eagerly await President Donald Trump’s Federal Reserve chair nomination, the central bank’s policy-setting committee will meet quietly in the background this week with many expecting them to keep interest rates unchanged
Treasury 10-year yield is set to climb toward 3 percent as the Fed could tighten three times in 2018 after a likely move in December, said James Ashley head of international market strategy Goldman Sachs Asset Management at the money manager
Best Buy Co. said it stopped some sales of Apple Inc.’s iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already expensive smartphones
Mylan NV’s second-ranked executive took an active role in a vast and “sinister” price-fixing conspiracy among global makers of generic pills that kept prices of the medications artificially high, dozens of states alleged in a new complaint; Mylan Bond Spreads Widen Amid Price-Fixing Probe
Former Trump adviser George Papadopoulos made a significant claim in an email: Top Trump campaign officials agreed to a pre-election meeting with representatives of Russian President Vladimir Putin
Bank of England’s governor Mark Carney faces a defining credibility test on Brexit-era rates
U.K. Hints at Compromises on Brexit Bill as Date Set for Talks
Macau Oct. Casino Rev. Rises 22.1% Y/y; Est. 14.5% Rise
Asian equity markets began November solidly on the front-foot led by the Nikkei 225 (+1.95%) as exporters benefited from a weaker JPY and with Sony at its highest in over 9 years after its H1 profit more than tripled. Elsewhere, KOSPI (+1.3%) extended on record levels and ASX 200 (+0.5%) was also higher amid strength in commodity-related stocks. Hang Seng (+0.6%) and Shanghai Comp. (+0.1%) both initially conformed to the broad positive sentiment amid continued liquidity efforts by the PBoC, although mainland indices then trimmed gains in late trade. Finally, 10yr JGBs were flat with demand subdued amid the heightened risk appetite and with a firmer 10yr auction also largely ignored. Chinese Caixin Manufacturing PMI (Oct) 51.0 vs. Exp. 51.0 (Prev. 51.0). PBoC injected CNY 140bln via 7-day reverse repos, CNY 40bln via 14-day reverse repos and CNY 60bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6300 (Prev. 6.6487)
Top Asian News
Hong Kong Stocks Advance as Tencent Climbs Most in a Month
China’s Onshore Junk Bonds Show Resilience on Supply-Side Reform
Iron Ore Flips as Traders Bet on Revival When China’s Curbs Ease
Japan Shares Jump on Yen Weakness; Sony Leads Tech Stock Surge
Noble Bonds Show Bet on Deal Delay as Hedge Funds See Trap
Tencent’s Red-Hot E-Book IPO Sets Stage for Music Arm Debut
European bourses have been likewise lifted by surging commodity prices and corporate earnings. However, Next’s (-5.4%) Q3 financial results have sent shares tumbling as much as 7%, which is also weighing on the retail sector with Marks & Spencer and AB Foods feeling the pressure. Standard Chartered have suffered losses this morning after their results printed lower than expected. DAX outperforms as German participants return to market from Reformation Day. Not even an upbeat UK manufacturing PMI and upward revision to the previous headline read enough to jolt Gilts, which high-ticked just ahead of the release before drifting back a mere 4 ticks or so. The range remains extremely narrow between 124.19-35, with the 10 year bond basically marking time ahead of BoE super Thursday to see what else the MPC has up its sleeve on top of the all but priced in ¼ pt rate hike. Bunds also trapped within tight parameters and poised for bigger market-moving events, like the FOMC and monthly US jobs data alongside the aforementioned BoE policy announcements (and QIR). US Treasuries a tad off recent highs/yields slightly firmer, also awaiting Trump tax reforms (now expected Thursday) and his long awaited choice as next Fed chair.
Top European News
Next Suffers as Warm Autumn Keeps Shoppers From Stores
Greece Is Said to Plan Debt-Swap Exercise Worth EU30 Billion
Turkey Raises Year-End Inflation Estimate to 9.8% vs 8.7%
U.K. Clothing Retailers May Decline After Next Sales Slump
In FX, GBP has moved above 1.33 this morning for the first time since mid-October, which comes ahead of the Bank of England’s ‘Super Thursday’ meeting, where it is expected they will raise the bank rate to 0.5%. The question is, whether this will be the beginning of a sustained hiking cycle or a readjustment from last year’s QE measures. Within the option market, O/N GBP/USD breakeven is at 100 pips for the ATM straddle. UK Mfg. PMI rose above analyst estimates, providing a modest lift to GBP, although the move had been somewhat contained given the focus on tomorrows BoE decision. The beginning of a new month sees a change in the direction for NZD. Having found support at the 2017 low (0.6817), while also looking stretched on the downside. NZD has seen a move back above 0.6900, which came after a strong NZ jobs report, in which unemployment unexpectedly fell to a 9-yr low, while jobs growth rose 2.2%. Given that the new PM is looking at reforming
the central bank act to have a dual mandate (inflation + employment) this somewhat raises the prospect of a rate hike. However, a
rate hike is not seen in OIS markets until Q4 2018 at the earliest.
JPY continues to weaken against the greenback amid the uptick in UST yields, which is looking to make a retest at 2.4%. Although,
114.00 has kept a lid on the gains in USD/JPY for now, touching a high of 113.97 overnight. Levels past 114.00 that could act as
near term resistance is the highs seen in May and July at 114.45 and 114.49 respectively.
In commodities, precious metals have been gaining throughout the morning to trade at intra-day highs with gold up USD 7.5/oz. Newsflow has been on the lighter side, however, according to Chinese state media, China’s 9-month gold consumption rose 15.5% Y/Y. WTI has extended on recent gains following a larger than expected drawdown in headline API crude inventories and as all other components of the release also showed declining stockpiles US API weekly crude stocks (23 Oct, w/e) -5.09M (Prev. 0.52M). Flows to Ceyhan have fallen to 216k bpd from 288k bpd seen yesterday, according to a port agent.
Looking at the day ahead, the key event on Wednesday evening will be the FOMC meeting there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Facebook and Tesla are amongst the notable earnings reports.
US Event Calendar
7am: MBA Mortgage Applications, prior -4.6%
8:15am: ADP Employment Change, est. 200,000, prior 135,000
9:45am: Markit US Manufacturing PMI, est. 54.5, prior 54.5
10am: ISM Manufacturing, est. 59.5, prior 60.8; Prices Paid, est. 67.8, prior 71.5; New Orders, prior 64.6; Employment, prior 60.3
10am: Construction Spending MoM, est. -0.15%, prior 0.5%
2pm: FOMC Rate Decision
Wards Total Vehicle Sales, est. 17.5m, prior 18.5m; Domestic Vehicle Sales, est. 13.7m, prior 14.3m
DB’s Jim Reid concludes the overnight wrap
October wasn’t a particularly scary month for investors with 32 out of our 39 regularly tracked global assets seeing a positive return in our monthly performance review. The S&P 500 (+2.33%) finished with a positive total return, meaning that the index has now seen a positive total return for all 10 months so far this year, the first time that this has happened in the 90 years we have data for. If you go beyond the calendar year end, October now marks the 12th positive month in succession which equals the record set in 1949-1950 and 1935-1936. A word of warning though, the next two months saw the run break spectacularly with returns at -3.6% and -7.7% respectively. See the note “S&P 500: The longest winning streak on record soon?” we did last month for more on this.
October didn’t end in a particularly exciting manner but the action kicks off today and continues apace until the end of the week. However there is a European holiday today so the usual first of the month PMI releases across the continent will be delayed until tomorrow. We do see the important ISM in the US though as well as ADP which will provide some clues to the storm bounce back in Friday’s payroll release.
Top of the bill (pardon the pun) today was supposed to be the next stage of the tax reform story. However, this morning we found out that the plans will be delayed until tomorrow, reflecting “the challenge of crafting and then passing a complex bill by Thanksgiving”. By then, we’ll see if there are any compromises in preserving deductions for state and local taxes which could impact Republican support in California and NY. We’d expect there to also be some focus on whether there is a phasing in of corporate taxes as per the leaks on Monday. Overnight, President Trump noted that “we’re not looking at that (phase in)”, but did left the door open by noting “it’s something, some people have mentioned, but hopefully not”. So all eyes on the House tomorrow. The FOMC meeting today should largely be a non-event, especially as there is no press conference. With a December hike priced at around 85%, it seems unlikely the Fed would want that number to change too much at the moment as it seems to suit them as things stand. They want to raise rates next month but leave a little wiggle room not to if events transpire against them over the next few weeks. DB’s Brett Ryan has previewed the meeting here.
Turning to Catalonia where tensions appear to have cooled further. Speaking in Brussels, ousted Catalan President Puidgemont denied he is seeking political asylum as he is here as a normal “EU citizen”. Further, he noted “the (Catalan) republic cannot be built on violence” and that he would return to Spain “immediately” if he gets “guarantees” of a fair trial. Note that the Spanish National Court has charged him for sedition where if convicted could carry jail terms of up to 30 years. Finally, he will press on with the region’s case for independence, but will respect the outcome of the new regional election scheduled on 21 December. As a reminder, El Mundo reported on Monday that opinion polls suggest Catalan secessionists could win 65 seats in a new election, but fall short of the 68 seats needed for new majority. On the other side, Spanish government officials told Bloomberg that there has been no signs of disobedience so far in Catalonia and article 155 measures are now fully in place. Yesterday, the Spanish markets rebounded further on increased signs of a return to normality with the IBEX up 0.74% and 10y yields down 3.5bp.
Now onto Brexit headlines, where there appears to be more signs that the UK may partly concede to break the stalemate in Brexit talks. One of the key issues is the potential financial settlement the UK owes to the EU bloc, where prior reports suggest the EU bloc want €60bln, while the UK only offered €20bln. Yesterday Brexit Secretary Davis noted “the withdrawal agreement…will probably favour the EU in terms of things like money and so on”. On the other hand, UK government spokesman James Slack noted that Brexit preparations have been accelerated with c3,000 new government jobs created to support Brexit planning, and that “each of these plans prepares the country for the range of negotiated outcomes and a no deal scenario”. Elsewhere, the main UK opposition party is seeking to apply parliamentary pressure on the government to release 58 studies on how leaving the EU will affect industries that make up c90% of the economy. Turning to the EU, the chief negotiator Barnier has offered some support and noted “I’m ready to speed up negotiations”, with the next round of Brexit talks to begin from 9th November.
This morning China’s October Caixin manufacturing PMI was in in line and steady at 51. Markets are rebounding, with the Nikkei (+1.28%), Kospi (+1.11%), Hang Seng (+0.52%) and ASX 200 (+0.57%) all up as we type. Now recapping markets yesterday. Despite broadly supportive macro data, US bourses only edged slightly higher (S&P +0.09%, Dow +0.12%), as investors await for more news re the FOMC, Fed Chair and draft tax plans. The Nasdaq rose a tad more (+0.43%) to a fresh record high, partly aided by further positive momentum from Apple shares (+1.39%). European markets were broadly higher too, with the Stoxx 600 up 0.33%, with gains led by real estate, energy and tech stocks, with partial offsets from financials including BNP Paribas (-2.67%) post its results. Across the region, the FTSE (+0.07%) was up slightly while the DAX was closed for the day and Spain’s IBEX gained 0.74% as tensions in Catalonia cooled further.
Over in government bonds, yields were mixed but little changed post the mini bond rally on Monday. The UST 10y rose 1.1bp while core European yields slightly outperformed (Bunds & Gilts -0.3bp; OATs -0.8bp) following lower than expected core inflation prints for the Eurozone (0.9% yoy vs. 1.1% expected). Peripherals continued to outperform, with Italian and Spanish 10y yields down 2bp and 3.5bp respectively.
Turning to currencies, the US dollar index (-0.01%) and the Euro (-0.04%) were broadly flat, but Sterling gained 0.57%, partly aided by an expectation of a rate hike this week and news that UK First secretary of state Damian Green was appointed as the new head of Brexit and Trade cabinet sub-committee, as some view him as having a pro-EU stance. In commodities, WTI oil rose +0.42% while precious metals weakened modestly (Gold -0.38%; Silver -0.82%), but LME nickel jumped 5.31%, in part as some see materially higher usage of the metal in electric cars. This morning, other base metals are broadly trading higher (Copper +1.30%; Zinc +1.57%; Aluminium +0.12%).
Away from the markets, the world’s large exchange owner (CME) is planning to have futures on Bitcoins by the end of the year. The contracts are expected to be settled in cash and use a daily price from the CME CF Bitcoin reference rate, with likely data feeds from digital exchanges such as Bitstamp, GDAX, itBIT and Kraken. A functioning derivatives markets on the digital currency could increase accessibility as professional investors could get exposure to its volatility and trade it on regulated venues as well as using the futures as a hedging tool. As a reminder, the price of a Bitcoin will set you back c$6,425, where the price has tripled from c3 months ago, up c8x since 12 months ago and up c475x since 5 years ago.
Turning to central banker commentaries, the ECB’s governing council member Visco noted that the Eurozone low inflation “reflects very moderate wage dynamics in several economies, which are a consequence of still large labourmarket slack”. Elsewhere, he noted that ECB’s QE recalibration ‘will ensure a high degree of monetary accommodation’. Then onto Italy more specifically, he noted their internal surveys suggests a “gradual pick up of credit demand, supported by a recovery of investment” and core tier 1 ratios for Italian lenders have improved to 13.1% (from 11.5%), which partly supports S&P’s recent upgrade of Italy’s sovereign rating to BBB.
Following up the indictments by Mueller from yesterday, Bloomberg noted former Trump adviser Papadopoulos claimed in an email that top Trump officials agreed to a pre-election meeting with representatives of the Russian President Putin. However, there was no indication such meeting took place and the email was NOT included in court documents as part of his guilty plea.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the macro data was in line to above expectations. The CB consumer confidence rose to 125.9 (vs. 121.3 expected) – marking a record 17 year high. In the details, the present situation index rose 4.2pt to 151.1 (highest since 2001) and the expectations index rose 6.1pt to 109.1 (highest since March). The October Chicago PMI also rose 1pt to a 6 year high of 66.2 (vs. 60 expected). Elsewhere, the 3Q employment cost index (Fed’s preferred metric of wage inflation) was in line at 0.7% qoq, while the August Corelogic house price index was slightly above expectations at 0.45% mom (vs. 0.4%), leaving an annual growth of 5.9% yoy.
Across Europe, there was a deluge of macro data where broadly speaking inflation was lower than expected but GDP growth and unemployment beat expectations. In the Eurozone, the October core CPI was below expectations at 0.9% yoy (vs. 1.1%) even if some considered that there was noise in the series which included German holiday prices which might not persist. The 3Q GDP was higher than expected at 0.6% qoq (vs. 0.5%) and 2.5% yoy (vs. 2.4% expected) – the strongest rate of growth since 1Q11. The unemployment rate for September also beat at 8.9% (vs. 9% expected).
In France, 3Q GDP was in line at 0.5% qoq, but data revisions to prior readings meant the annual growth was a tad higher at 2.2% yoy – highest since 2Q11. Elsewhere, the October CPI was in line at 0.1% mom and 1.2% yoy, while the September PPI was slightly above last month’s reading at 0.5% mom (vs. 0.4% previous). In Italy, the October CPI was below expectations at 0% mom (vs. 0.2%) and 1.1% yoy (vs. 1.3% expected) and the September PPI was also lower than the prior reading at 0.3% mom (vs. 0.5% previous). However, the September unemployment was in line at 11.1%. In the UK, the October Gfk consumer confidence reading was in line at -10.
Looking at the day ahead, front and centre on Wednesday evening will be the FOMC meeting although it’s worth noting that there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Onto other events, UK Trade Secretary Liam Fox testifies before a parliamentary panel on plans for post-Brexit trade while BoJ Deputy Governor Nakaso is due to speak. Facebook and Tesla are amongst the notable earnings reports.
3. ASIAN AFFAIRS
i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.57 points or .08% /Hang Sang CLOSED UP 348.52 pts or 1.23% / The Nikkei closed UP 408.47 POINTS OR 1.86/Australia’s all ordinaires CLOSED UP 0.49%/Chinese yuan (ONSHORE) closed UP at 6.611/Oil UP to 55.01 dollars per barrel for WTI and 61.48 for Brent. Stocks in Europe OPENED IN THE GREEN . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.611. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6112 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA//
3b) REPORT ON JAPAN
end
3C CHINA REPORT.
The ghost collateral that we wrote about in 2014 is finally beginning to haunt traders. The first one to take a huge hit on lack of collateral financing trade is London based E D and F Man Company who is now caught with a phony warehouse receipt from China.
(courtesy zerohedge)
Chinese “Ghost Collateral” Scam Leads To Market “Shockwaves”, Huge Loss For Giant Commodity Trader
Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China’s banking system: namely that much of China’s staggering loan issuance had been built (literally) upon air and that trillions in loan collateral had been “rehypothecated” between two, three or many more debtors – or never even existed – forcing banks to accept that they would never recover much if any of the pledged collateral – in most cases various commodities – if the economy were to suffer a hard-landing resulting in mass defaults. The most famous example involved collateral fraud at China’s 3rd largest port, Qingdao, where numerous borrowers were found to have “pledged” the same collateral of steel and copper to obtain funding from various banks.
For those unfamiliar there is an extensive selection of stories covering the topic, which peaked three years ago, and then quietly faded away as China did everything in its power to deflect attention from what some have said is the biggest threat facing its economy: a giant hole . Below we link to some of our more comprehensive articles on the topic:
China’s “Evaporated” Collateral Scandal Spreads To Second Port
What Is The Common Theme: Iron Ore, Soybeans, Palm Oil, Rubber, Zinc, Aluminum, Gold, Copper, And Nickel?
China Faces “Vicious Circle” As Commodity Collateral Collapses
China Scrambling After “Discovering” Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing
Copper Plunges Most In 3 Months As “Rehypothecation Evaporation” Concerns Grow
Western Banks Scramble As China’s “Rehypothecation Evaporation” Goes Global
BIS Warns About Rehypothecation Threats
How China’s Commodity-Financing Bubble Becomes Globally Contagious
China’s Collateral Rehypothecation Fraud Is Systemic
To be sure, the story briefly resurfaced in May when we reported that “Some Chinese Banks Suspend “Interbank Business” As Regulator Demands That Collateral “Actually Exists”, although it then quickly fizzled again, for two reasons: i) China watchers assumed that Beijing no longer had a “collateral problem” which had been somehow fixed after all the noise rehypothecation stories from in 2014, and ii) China now seemingly has even bigger problems on its hands, such as finding the right balance between maintaining the latest housing bubble, keeping capital outflows in check and its currency stable at a time when China’s debt (well over 300% of GDP) was downgraded by Moody’s (and later S&P) for the first time in 28 years, while its gargantuan shadow debt powder keg is one big red headline away from a $9 trillion shadow bank run.
And while the latter is certainly accurate, the former couldn’t possibly be further from the truth.
That was revealed by a terrific June expose when Reuters reporters went to China to determine the current status of China’s long-standing collateral problem. What they found was that “ghost collateral” continues to haunt countless loans across China’s debt-laden banking system, which is a problem because as we explained in 2014, and as Reuters noted “lax lending practices and overvalued collateral spurred the U.S. financial crisis in 2008. Now, banks in China face risks of their own as fraudulent borrowers and corrupt bankers burden the financial system with loans lacking genuine collateral.“
Fast forward to today, when China’s “ghost collateral” problem has re-emerged with a bang, and this time there is a quantifiable price tag. As Bloomberg reports, the giant agricultural commodities merchant ED&F Man Holdings Ltd., best known for trading sugar and coffee, has taken a major hit of about $80 million “after falling victim to a scam in the metals market.”
The scam, for those who have been following our reports on China’s ghost collateral, will be familiar: ED&F Man’s loss is linked to fraudulent metal-financing that was uncovered at a warehousing firm owned by Glencore Plc earlier this year, said Bloomberg’s sources. Back in 2013, we published an extensive discussion on the nature of China’s commodity-financing deals, many of which were designed as quasi-legal ponzi scheme, meant to boost liquidity and funding by rehypothecating the underlying collateral on numerous occasions; at the time copper was the preferred underlying asset, however with time this spread to virtually all commodities.
This tale of “missing” collateral comes at a bad time for ED&F Man, which was already nursing a smaller losses at its sugar unit.
The metals issue comes as ED&F Man had a tough year at its sugar business, with the 230-year-old commodities trader last month saying it would cut costs and headcount at the unit amid surplus supplies and low prices. The London-based firm this week said Chief Executive Officer Phil Howell is leaving after three years in the role and more than two decades at the company.
While the impact on the company’s final earnings won’t be clear until ED&F Man releases its annual financial statements, it will be sizable: last year the company reported pretax profit, adjusted for acquisitions, of $100.9 million, which means that China’s fake collateral has cost nearly one full year of net income for one of the world’s best respected independent traders.
Here’s what happened: Glencore’s Access World – one of the world’s biggest provider of LME warehousing and logistics services – warned customers in January that it found forged warehouse receipts circulating in the market. The announcement, Bloomberg writes “sent shock waves through the commodities-trading industry, reawakening concerns about fraud after a metal-financing scam was uncovered at the Chinese port of Qingdao in 2014.”
Meanwhile, ED&F Man Capital Markets acted as a broker between Australia & New Zealand Banking Group and two Hong Kong-based trading companies in a sale-and-repurchase financing deal. The trade was backed by storage receipts for about $300 million of nickel stored in Access World warehouses in Asia, according to court documents filed by the bank in the U.S in June. However, when ANZ looked to sell the nickel, it discovered that all but one of the 84 storage receipts were likely to have been forged, leaving it with “substantial losses,” the bank said in court filings, which were part of a request for information it could use in lawsuits in other jurisdictions.
There is still some hope that ED&F Man can recover some losses…
Some of ED&F Man’s nickel-related losses could still be recovered when court proceedings are concluded, the people said. The company last month said its brokerage business in general continues to perform well.
Suedzucker AG, Europe’s largest sugar producer, has a 35 percent stake in ED&F Man.
… however, the odds are slim to none. In fact, what is surprising is that it has taken over three years for the first serious hit from China’s “ghost collateral” to emerge. Or perhaps not: in a time of generally rising prices, few if any traders actually bother to check if their pledged collateral ever exists. The problem emerges when prices decline, which courtesy of China’s bubble machine, has so far not been an issue. However, there are those random occasions when spot checks reveal shocking surprises, as Reuters reminded of over the summer:
The banker at the other end of the phone line was furious, recalled Shanghai lawyer Wang Chaoyu. A pile of steel pledged as collateral for a loan of almost $3 million from his bank, China CITIC, had vanished from a warehouse on the outskirts of the city. Just several months earlier, in mid-2013, Wang and the banker had visited the warehouse and verified that the steel was there. “The first time I went, I saw the steel,” recalled Wang, an attorney at Beijing DHH Law Firm, which represents the Shanghai branch of CITIC.
“Afterwards, the banker got in contact with me and said, ‘The pledged assets are no longer there.’”
Now, it was ED&F Man’s turn to make the same shocking discovery. However, with trillions in dollars “guaranteed” by Chinese “ghost collateral” based on various third party estimates, at least the giant commodity trader can find solace in the fact that it will not be the last to learn that “it’s gone… it’s all gone.”
END
4. EUROPEAN AFFAIRS
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
end
6 .GLOBAL ISSUES
Iceland
Iceland’s biggest volcano is set to erupt after the area had many earthquakes disturbing the caldera. The huge amount of eruption could could damage to flights over the area
(Mac Slavo/SHFTPlan.com)
Iceland’s Biggest Volcano Is “Ready To Erupt” As Europe Faces A Disaster
Authored by Mac Slavo via SHTFplan.com,
Iceland’s biggest volcano has been rocked by the strongest earthquake since it last erupted in 2014.
With swarms of earthquakes occurring in the French Alps too, Europe is facing what could be one of the largest natural disasters in history.
Last week, the 6,591-foot tall Bardarbunga, a “powerful and versatile” volcano, was rattled by the four largest earthquakes since it last erupted in 2014. The earthquakes, measuring in magnitudes of 3.9, 3.2, 4.7, and 4.7 on the Richter scale, struck the caldera region over several days last weekend. Another magnitude 4.1 earthquake hit the 200km long and 25km wide volcanic system earlier last week and several tremors struck in September.
Páll Einarsson, a volcanology expert at the University of Iceland, said the latest quakes are part of a series that have been “in progress for two years”. Speaking exclusively to Daily Star Online, he said the volcano is “clearly preparing for its next eruption” within the next few years.
Fears are spiking even higher when considering the earthquake swarm that has been rocking the French Alps recently.
The 10,000-year-old volcano spewed out large volumes of sulfur dioxide during its last seven-month eruption which took place between August of 2014 and February of 2015. Although the eruption did not disrupt any flights, the emissions harshly impacted the air quality in Iceland, leading to health consequences across the country.
In spite of describing the volcanoes activity as “high”, the Icelandic Met Office has yet to issue any warnings about the possibility of Bardarbunga’s eruption. In fact, the warning code remains green; meaning the volcano is in a normal, non-eruptive state, according to the volcano monitor.
Seven years ago Iceland’s massive Eyjafjallajökull volcano erupted, spewing a choking veil of ash across Europe. Residents worry as memories of the 2014 eruption and the flight chaos caused by the 2010 eruption of the Eyjafjallajökull volcano resurface.
The deadly volcanic dust wiped out skies and grounded 100,000 flights, resulting in the economy losing £4 billion.
Should an eruption of Bardarbunga take place, it’s highly possible that there would be another even more drastic air travel restriction and poorer air quality.
end
7.OIL ISSUES
Yesterday’s report on the API showed a huge drawdown. Today’s DOE showed little draw down and that disappointed our bulls in oil and gasoline.
(courtesy zerohedge)
WTI/RBOB Sink As Inventory Draws Disappoint
WTI/RBOB held on to gains overnight following major draws reported by API and more OPEC jawboning (this time from UAE), but the DOE data disappointed compared to API’s huge draws with Crude and Gasoline drawing down but considerably less than API reported (and Distillates barely drawing down at all).
Bloomberg Intelligence energy analyst Fernando Valle:
Strong demand continues to spur inventory drains.Crude-oil stocks remain elevated, but refined-product inventories are looking increasingly tight.
Wide WTI discounts to Brent are likely to push inventories down in coming weeks, driven by exports and increased refinery utilization.
Crack spreads are likely to stay elevated, in particular for gasoline, as demand continues to buck the seasonal trend.
API
Crude -5.087mm (-1.3mm exp)
Cushing -263k
Gasoline -7.697mm (-1.55mm exp)
Distillates -3.106mm
DOE
Crude -2.44mm (-1.3mm exp)
Cushing +90k
Gasoline -4.02mm (-1.55mm exp)
Distillates -320k (-2.5mm exp)
Following API’s major draws, DOE was a big disappointment with smaller draws in crude, gasoline, and distillates than API reported and a build at Cushing…
Bloomberg Intelligence energy analysts Fernando Valle and Vince Piazza note that it’s the time of year when oil inventories begin to build, and supplies are already almost 17% above the five-year norm. While benchmarks have rallied on heightened geopolitical concerns, sentiment remains unsteady. Oil production is resilient, but exports are offering a key outlet for elevated stockpiles.
Overall crude inventories are at their lowest since May 2015…
Distillates and Gasoline exports jumped last week. US crude, products imports sunk a new record low as total crude/product exports hit a new record high.
US Crude production rebounded the prior week from Gulf storm shut-ins and increased ionce again this week…
WTI/RBOB held gains from last night’s API data into the DOE print, then sank as DOE disappointed…
“If trading behavior in the last few days and weeks gives any indication, prices will rise further on just confirmation of strong inventory draws,” explained Commerzbank analyst Carsten Fritsch, adding “we are close to the 2017 high from January and if that is broken then we are at more than 2-year highs. This will give further incentive for U.S. oil producers to increase output so I think we are setting the base for lower prices for next year.”
8. EMERGING MARKET
Venezuela’s annual rate of inflation is a cool 2875%
(courtesy Steve Hanke)
Venezuela’s Grim Reaper: A Current Inflation Measurement – Current Annual Rate 2875%
Steve H. Hanke's picture
by Steve H. Hanke
Oct 31, 2017 6:06 PM
Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.
The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world’s worst inflation.
As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data reported by the BCV is almost two years old. To remedy this problem, the Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, began to measure Venezuela’s inflation in 2013.
The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.
I compute the implied annual inflation rate on a daily basis by using PPP to translate changes in the VEF/USD exchange rate into an annual inflation rate. The chart below shows the course of that annual rate, which last peaked at 3473% (yr/yr) in late October 2017. At present, Venezuela’s annual inflation rate is 2875%, the highest in the world (see the chart below).
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am
Euro/USA 1.1639 DOWN .0012/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE GREEN
USA/JAPAN YEN 113.99 UP 0.337(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 1.3304 UP .0014 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2877 DOWN .0014(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS WEDNESDAY morning in Europe, the Euro FELL by 12 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1639; / Last night the Shanghai composite CLOSED UP 2.57 POINTS OR .08% / Hang Sang CLOSED UP 348.52 PTS OR 1.23% /AUSTRALIA CLOSED UP 0.49% / EUROPEAN BOURSES OPENED IN THE GREEN
The NIKKEI: this WEDNESDAY morning CLOSED UP 408.47 POINTS OR 1.86%
Trading from Europe and Asia:
1. Europe stocks OPENED IN THE GREEN
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 248.52 POINTS OR 1.23% / SHANGHAI CLOSED UP 2.57 POINTS OR .08% /Australia BOURSE CLOSED UP 0.49% /Nikkei (Japan)CLOSED UP 408.47 POINTS OR 1.86% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1278.70
silver:$16.98
Early WEDNESDAY morning USA 10 year bond yield: 2.390% !!! UP 2 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.889 UP 2 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)
USA dollar index early WEDNESDAY morning: 94.63 UP 8 CENT(S) from YESTERDAY’s close.
This ends early morning numbers WEDNESDAY MORNING
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And now your closing WEDNESDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.105% UP 3 in basis point(s) yield from TUESDAY
JAPANESE BOND YIELD: +.061% DOWN 1 in basis point yield from TUESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.475% UP 2 IN basis point yield from TUESDAY
ITALIAN 10 YR BOND YIELD: 1.804 DOWN 2 POINTS in basis point yield from TUESDAY
the Italian 10 yr bond yield is trading 32 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.373% UP 1 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY
Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1627 DOWN ,0025 (Euro DOWN 25 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.92 UP 0.268(Yen DOWN 27 basis points/
Great Britain/USA 1.3265 DOWN 0.0024( POUND DOWN 24 BASIS POINTS)
USA/Canada 1.2873 DOWN.0018 Canadian dollar UP 18 Basis points AS OIL FELL TO $54.39
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This afternoon, the Euro was DOWN 25 to trade at 1.1627
The Yen FELL to 113.92 for a LOSS of 27 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND FELL BY 24 basis points, trading at 1.3265/
The Canadian dollar ROSE by 18 basis points to 1.2873 WITH WTI OIL FALLING TO : $54.39
The USA/Yuan closed AT 6.6020
the 10 yr Japanese bond yield closed at +.061% DOWN 1 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from TUESDAY at 2.360% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.836 DOWN 4 in basis points on the day /
Your closing USA dollar index, 94.74 UP 18 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY: 1:00 PM EST
London: CLOSED DOWN 5.12 POINTS OR 0.07%
German Dax :CLOSED UP 235.94 POINTS OR 1.78%
Paris Cac CLOSED UP 11.00 POINTS OR 0.20%
Spain IBEX CLOSED DOWN 16.80 POINTS OR 0.16%
Italian MIB: CLOSED UP 198.30 POINTS OR 0.87%
The Dow closed up 57.77 POINTS OR .12%
NASDAQ WAS closed DOWN 11.13 PTS OR 0.17% 4.00 PM EST
WTI Oil price; 54.39 1:00 pm;
Brent Oil: 60.60 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 58.19 DOWN 15/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.373% FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Well that's The Scoop
Thank You and Have a Wonderful Day
https://www.silverdoctors.com/tag/harvey-organ/
Good Morning
Nov 1/Silver is the star of the day:up 2.8% or 48 cents/A London based company is the first major trading company to be dinged with “ghost collateral” coming from China/gold up $6.60/at the comex we have continual queue jumping in both gold and silver/Powell to be the next Fed Chair/
November 1, 2017 · by harveyorgan · in Uncategorized · 3 Comments
GOLD: $1276.60 UP $6.60
Silver: $17.18 UP 48 cents
Closing access prices:
Gold $1275.00
silver: $17.13
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1283.60 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1269.60
PREMIUM FIRST FIX: $14.00(premiums getting larger)
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SECOND SHANGHAI GOLD FIX: $1297.34
NY GOLD PRICE AT THE EXACT SAME TIME: $1274.50
Premium of Shanghai 2nd fix/NY:$22.84 PREMIUMS GETTING LARGER)
CHINA REJECTS NEW YORK PRICING OF GOLD!!!!
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LONDON FIRST GOLD FIX: 5:30 am est $1279.25
NY PRICING AT THE EXACT SAME TIME: $1279.00
LONDON SECOND GOLD FIX 10 AM: $1277.05
NY PRICING AT THE EXACT SAME TIME. 1273.30 ??
For comex gold:
NOVEMBER/
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 186 NOTICE(S) FOR 18,600 OZ.
TOTAL NOTICES SO FAR: 709 FOR 70,900 OZ (2.205TONNES)
For silver:
NOVEMBER
140 NOTICE(S) FILED TODAY FOR
700,000 OZ/
Total number of notices filed so far this month: 567 for 2,835,000 oz
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Bitcoin: $6517 bid /$6527 offer up $86.00 (MORNING)
BITCOIN CLOSING;$6581 BID:6601. OFFER UP $146.00
end
Today gold had a pretty good day rising by $6.60 but it was silver that was star of the show rising by 48 cents or 2.8%. This time around silver rose for no apparent reason. It is obvious that its huge 196,000 short comex contracts are having its effect on our bankers. As I have outlined to you for the past few months, the banks are desperate trying to cover but to no avail. They have en masse decided to run to higher ground where they will regroup and try again. If the silver price runs away from them like the Bitcoin price, our banker friends will implode.
Let us have a look at the data for today
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In silver, the total open interest ROSE BY A LARGE SIZED 2419 contracts from 196 ,434 UP TO 198,853 DESPITE YESTERDAY’S TRADING IN WHICH SILVER FELL BY 13 CENTS. THE CROOKS ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS SO THEY CONTINUE TO TORMENT.
RESULT: A GOOD SIZED RISE IN OI COMEX WITH THE 13 CENT PRICE LOSS. OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFALL.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.993 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 140 NOTICE(S) FOR 700,000 OZ OF SILVER
In gold, the open interest SURPRISINGLY ROSE BY A CONSIDERABLE 2419 CONTRACTS DESPITE THE GOOD SIZED FALL IN PRICE OF GOLD ($6.15) . The new OI for the gold complex rests at 531,918.
NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT MONTH.
Result: A GOOD SIZED INCREASE IN OI DESPITE THE FALL IN PRICE IN GOLD ($6.15). THERE CERTAINLY WAS NO SHORT COVERING BY THE BANKERS WITH THE RAID YESTERDAY
we had: 186 notice(s) filed upon for 18,600 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD:
Strange! with gold up $6.60 today, we had a withdrawal of 1.18 tonnes of gold from inventory at the GLD/
Inventory rests tonight: 849.59 tonnes.
SLV
STRANGE: WITH SILVER DOING WELL THESE PAST THREE TRADING DAYS AND ESPECIALLY TODAY WITH A HUGE GAIN OF 48 CENTS, WE HAD NO DEPOSIT GAIN IN SILVER INVENTORY AT THE SLV:
INVENTORY RESTS AT 319.155 MILLION OZ
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver ROSE BY A HUGE 2419 contracts from 196,434 UP TO 198,853 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE FALL IN SILVER PRICE (LOSS OF 13 CENTS). OUR BANKERS WERE AGAIN UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF THEIR SILVER SHORTS.
RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 13 CENT LOSS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS . .NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.57 points or .08% /Hang Sang CLOSED UP 348.52 pts or 1.23% / The Nikkei closed UP 408.47 POINTS OR 1.86/Australia’s all ordinaires CLOSED UP 0.49%/Chinese yuan (ONSHORE) closed UP at 6.611/Oil UP to 55.01 dollars per barrel for WTI and 61.48 for Brent. Stocks in Europe OPENED IN THE GREEN . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.611. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6112 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea//
b) REPORT ON JAPAN
c) REPORT ON CHINA
i)The ghost collateral that we wrote about in 2014 is finally beginning to haunt traders. The first one to take a huge hit on lack of collateral financing trade is London based E D and F Man Company who is now caught with a phony warehouse receipt from China.
(courtesy zerohedge)
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
Iceland
Iceland’s biggest volcano is set to erupt after the area had many earthquakes disturbing the caldera. The huge amount of eruption could could damage to flights over the area
(Mac Slavo/SHFTPlan.com)
7. OIL ISSUES
Yesterday’s report on the API showed a huge drawdown. Today’s DOE showed little draw down and that disappointed our bulls in oil and gasoline.
( zerohedge)
8. EMERGING MARKET
Venezuela’s annual rate of inflation is a cool 2875%
( Steve Hanke)
9. PHYSICAL MARKETS
i)Once the crooks are able to use bitcoin futures, you can bet that they will cause crypto prices to crumble
( CNBC/GATA)
ii)Question; how did the Royal Bank of Canada purchase a gold bar without testing it?
( CBC/GATA)
iii)Retail sales of gold has been dismal in the west as bitcoin seems to have replaced gold as a safe haven. However Eastern nations are taking up the slack and buying gold hand over fist
( zerohedge)
iv)Turkey’s gold imports surged by 13.8 billion dollars (350 tonnes) this year.
(Sharp’s Pixley)
v)Now German Investors are now flocking into gold
(Simon Osborne /EXPRESS CO UK)
vi)Now Iran is preparing its infrastructure to accept Bitcoin adoption
(courtesy zerohedge)
10. USA Stories
i)FOMC statement, policy unchanged as growth moves to solid from moderate( zerohedge)ii)Private ADP showed a huge jump in payrolls of 235,000 in the post hurricane rebound( ADP)iii)Wow!! The Atlanta Fed now sees the 4th quarter GDP running at a blistering pace of 4.5% due to the huge increase in consumer spending.( zerohedge)
iv)The Fed’s balance sheet instead of falling by 10 billion it rose by 5 billion with one day left to report:
( zerohedge)
v)Trump should like this: USA PMI rises but Mexico’s PMI collapses
( zerohedge)
vi)Obama proposes repealing the Obamacare individual mandate to pay for the tax cuts. That will anger the democrats and some Republicans as well
( zerohedge)
vii)The following is a must read as Stockman explains to us the ridiculousness of the charges and conviction on Baby George Papadopulous for lying to the FBI on a date which was totally frivolous. Now you will understand the deep state and how it operates!!
a must read..
(David Stockman)
viii)Faced with another sex crime investigation, it seems that the former Weinstein Company Studio is hurtling towards bankruptcy
( zerohedge)
ix)Kentucky is in such a bad state of affairs with respect to its public pensions. Now the Kentucky teachers blast authorities who are planning to reform the plan. If they do not reform then the pension plan will go bust
( zerohedge)
x)I am not buying the strength of the market. Today sales are really lacklustre with General Motors inventory starting to tick upwards
( zerohedge)
Let us head over to the comex:
The total gold comex open interest SURPRISINGLY ROSE BY A CONSIDERABLE 3,459 CONTRACTS UP to an OI level of 531,918 DESPITE THE FALL IN THE PRICE OF GOLD ($6.15 FALL IN YESTERDAY’S TRADING). IT SEEMS THAT WE GOT SOME NEWBIE LONGS ENTERING THE ARENA AND WITHOUT A DOUBT WE HAD ZERO SHORT COVERING BY THE BANKERS.
NO EFP’S WERE ISSUED FOR NOVEMBER YESTERDAY.
HERE IS A SUMMARY OF EFP’S ISSUED TO LONGS IN EACH OF THE PAST 3 MONTHS:
The amount of EFP’s issued for each of the past 3 months at month’s end;
Sept: 6500
Oct 7200
Nov: 8500
Result: a GOOD SIZED open interest INCREASE WITH THE RISE IN THE PRICE OF GOLD ($5.30.)
.
We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF ONLY 338 CONTRACTS DOWN TO 272. We had 523 notices filed upon yesterday so surprisingly we again gained 185 contracts or 18,500 additional oz will stand for delivery in this non active month of November. TO SEE BOTH GOLD AND SILVER RISE IN AMOUNT STANDING (QUEUE JUMPING) IS A GOOD INDICATOR OF PHYSICAL SHORTNESS FOR BOTH OF OUR PRECIOUS METALS.
The very big active December contract month saw it’s OI LOSE 5790 contracts DOWN to 376,939. January saw its first open interest of 14. FEBRUARY saw a gain of 9039 contacts up to 93,780.
.
We had 186 notice(s) filed upon today for 18,600 oz
VOLUME FOR TODAY (PRELIMINARY) 292,195
CONFIRMED VOLUME YESTERDAY: 271, 486
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results. Total silver OI ROSE BY a huge 2341 CONTRACTS FROM 196,434 UP TO 198,775 DESPITE YESTERDAY’S 13 CENT LOSS IN PRICE. WE HAD ZERO BANKER SHORT COVERING AS THE CROOKS TRIED AND FAILED IN THEIR ATTEMPT TO LOOSEN ANY SILVER LONGS FROM THE SILVER TREE. NO SILVER EFP’S WERE ISSUED FOR NOVEMBER.
The new front month of November saw its OI fall by 214 contracts and thus it stands at 379. We had 427 notices served upon yesterday so we gained 213 contracts or an additional 1,065,000 oz will stand in this non active month of November. After November we have the big active delivery month of December and here the OI rose by 968 contracts down to 141,978. January saw NO gain contracts REMAINING AT 685.
We had 140 notice(s) filed for 700,000 oz for the OCT. 2017 contract
INITIAL standings for NOVEMBER
Nov 1/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
17,143.123
oz
International Delaware
JPMorgan
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
nil oz
No of oz served (contracts) today
186 notice(s)
18,600 OZ
No of oz to be served (notices)
86 contracts
(8600 oz)
Total monthly oz gold served (contracts) so far this month
709 notices
70,900 oz
2.205 tonnes
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
Today we HAD 0 kilobar transaction(s)/
WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer deposit(s):
total customer deposits nil oz
We had 2 customer withdrawal(s)
i) Out of International Delaware: 9066.30 oz
ii) Out of JPMorgan: 7666.293 oz
total customer withdrawals; 17,143.123 oz
we had 0 adjustment(s)
For NOVEMBER:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 140 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 14 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the NOVEMBER. contract month, we take the total number of notices filed so far for the month (709) x 100 oz or 70900 oz, to which we add the difference between the open interest for the front month of NOV. (258 contracts) minus the number of notices served upon today (140 x 100 oz per contract equals 79,500 oz, the number of ounces standing in this NON active month of NOV
Thus the INITIAL standings for gold for the NOVEMBER contract month:
No of notices served (709) x 100 oz or ounces + {(272)OI for the front month minus the number of notices served upon today (140) x 100 oz which equals 79,500 oz standing in this active delivery month of NOVEMBER (2.472tonnes)
SOMEBODY IS IN GREAT NEED OF PHYSICAL GOLD.
WE GAINED 18,500 OZ OF GOLD STANDING!!
.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 553,576.101 or 17.218 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,690,034.600 or 270.23 tonnes
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
IN THE LAST 14 MONTHS 83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE NOVEMBER DELIVERY MONTH
NOVEMBER FINAL standings
Nov 1/ 2017
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory
nil oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
nil
oz
No of oz served today (contracts)
140 CONTRACT(S)
(700,000,OZ)
No of oz to be served (notices)
239 contract
(1,195,000 oz)
Total monthly oz silver served (contracts) 567contracts
(2,835,000 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 xx oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWAL nil oz
We had 0 Customer deposit(s):
***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: nil oz
we had 0 adjustment(s)
The total number of notices filed today for the NOVEMBER. contract month is represented by 140 contracts FOR 700,000 oz. To calculate the number of silver ounces that will stand for delivery in NOVEMBER., we take the total number of notices filed for the month so far at 567 x 5,000 oz = 2,835,0000 oz to which we add the difference between the open interest for the front month of NOV. (379) and the number of notices served upon today (140 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the NOVEMBER contract month: 567 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(379) -number of notices served upon today (140)x 5000 oz equals 4,030,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.
We gained a whopping 213 contracts or an additional 1,065,000 oz will stand for metal in the non active delivery month of November
ESTIMATED VOLUME FOR TODAY: 77,073
CONFIRMED VOLUME FOR YESTERDAY: 65176 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 65,176 CONTRACTS EQUATES TO 326 MILLION OZ OR 46.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER
Total dealer silver: 44.005 million (close to record low inventory
Total number of dealer and customer silver: 225.904 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott and Central Fund of Canada
will update later tonight
1. Central Fund of Canada: traded at Negative 2.1 percent to NAV usa funds and Negative 2.0% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.4%
cash .+.3%( Nov 1/2017)
will update Sprott funds later tonight.
2. Sprott silver fund (PSLV): STOCK RISES TO -0.77% (Nov 1 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.68% to NAV (Nov 1/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.77%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.68%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
(courtesy Sprott/GATA)
Sprott Inc. to take control of rival gold holder Central Fund of Canada
by THE CANADIAN PRESS
Posted Oct 2, 2017 8:43 am PDT
Last Updated Oct 2, 2017 at 9:20 am PDT
TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.
Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.
The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.
Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.
In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.
Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.
END
And now the Gold inventory at the GLD
Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes
OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes
Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES
Oct 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES
Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES
OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES
oCT 19/NO CHANGE/853.13 TONNES
Oct 18 /no change in gold inventory at the GLD/ inventory rests at 853.13 tonnes
Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
Oct 16/A HUGE WITHDRAWAL OF 5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES
0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES
Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES
Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES
oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT 854.30 TONNES
Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES
SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes
Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES
Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/
Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes
Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes
Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.
Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes
Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Nov 1/2017/ Inventory rests tonight at 849.59 tonnes
*IN LAST 263 TRADING DAYS: 91.36 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 198 TRADING DAYS: A NET 65.92 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 34,81 TONNES HAVE BEEN ADDED.
end
Now the SLV Inventory
Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz
Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/
Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/
oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/
OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ
oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ
Oct 18 no change in silver inventory at the SLV/inventory rest at 322.271 million oz
Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ
Oct 16/ NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ
oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/
Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ
Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ
Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ
OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z
Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615 MILLION OZ
Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ
SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/
Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/
Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ
Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz
Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/
Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/
Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz
Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz
Nov 1/2017:
Inventory 319.155 million oz
end
6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration
+ 1.39%
12 Month MM GOFO
+ 1.60%
30 day trend
end
Major gold/silver trading/commentaries for WEDNESDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
Invest In Gold To Defend Against Bail-ins
By janskoylesNovember 1, 20170 Comments
– Italy’s Veneto banking meltdown destroyed 200,000 savers and 40,000 businesses
– EU bail-in rules have wiped out billions for savers and and businesses, with more at risk
– Bail-ins are not unique to Italy, all Western savers are at risk of seeing savings disappear
– Counterparty-free, physical gold bullion is best defence against bail-ins
One of Italy’s twenty regions is calling for more autonomy from the state following a nonbonding referendum. Why? Because a government supported ‘rescue package’ caused the lifesavings of 200,000 savers to be wiped out during the implosions of Popolare di Vicenza and Veneto Banca.
Since then the banks have been rescued in one way or another yet the impact of the collapse on individuals and small businesses is only just becoming clear.
As in Spain’s Catalonia the region of Veneto is wealthier than the average Italian region, with its own industries and language yet it has been left with a pile of ash when it comes to its banking sector.
The region is proud to be the home of successful brands such as Benetton, De’Longhi, Geox and Luxottica. But it is the 40,000 small businesses that are in a state of limbo unable to pay workers, find credit or operate on a day-to-day basis.
Sadly the case of Veneto is one of a growing list of regions of banking customers that have been destroyed due to the incompetence of national authorities and the overbearing powers of the EU.
Profitable businesses take the hit
What is seen is as surprising to many reading about the story of Veneto is that profitable, stable businesses are also suffering as a result of a banking collapse.
When someone’s savings are wiped out, that isn’t the end of the nightmare. Many businesses were exposed to those banks both through credit and shares.
Many businesses operate on credit. This happens in companies of all scales and levels of success. The businesses that borrowed from the two Veneto banks are now in a state of limbo. They have no line of credit due to their exposure to the collapsed banks.
This is despite a government-led body stepping into help manage the fallout and finances of the ruined institutions. Bloomberg explains:
Even a perfect credit score is useless in Veneto now if your only collateral is stock in either bank, which were coveted investments for generations of locals.
Bail-in of the first resort
Italians are in very deep financially when it comes to their banking system. The 2015 IMF report states:
Retail holdings in Italy are relatively large compared to other countries, comprising about one- third of about €600 billion worth of bank bonds and half of about €60 billion worth of subordinated bonds.
That is all money that will just disappear overnight in the case of bank failure. In some cases, it already has.
In Italy a common problem has been that savers and businesses were persuaded to invest in subordinated (junior) bonds by their bank managers.
By 2015 over €31 billion of retail sub bonds had been sold to retail investors. Retail investors are ordinary savers and small businesses.
‘Households hold about one-third of senior bank debt and almost half of total subordinated bank debt.’ – IMF
These bondholders are seen as creditors. The same type of creditor that EU rules state must take responsibility for a bank’s financial failure, rather than the taxpayer. This is a bail-in scenario.
In a bail-in scenario the type of junior bonds held by the retail investors in the street is the first to take the hit. When the world’s oldest bank Monte dei Paschi di Siena collapsed ordinary people (who also happen to be taxpayers) owned €5 billion ($5.5 billion) of subordinated debt. It vanished.
A 2015 IMF study found that the majority of Italy’s 15 largest banks a bank rescue would ‘imply bail-in of retail investors of subordinated debt’. Only two-thirds of potential bail-ins would affect senior bond-holders.
Nothing will respect you like gold does
Why put so much faith in the bank? Because, despite many financial crises in the last 100 years, savers and businesses still believe their money will be safe.
The graph above shows just how much we still trust our banks. The least trusting country is Italy yet their exposure has been so great, imagine what damage will be done when the likes of the UK, US or Germany face a bail-in situation.
In Italy where banks have been around for literally hundreds of years, many family business owners are still dealing with bank accounts, investments and loans their ancestors organised a century ago.
This kind of relationship can lead to an almost Stockholm Syndrome situation. Despite receiving consistency bad treatment from your bank you want to support it and help it out. You still trust it. So when the bank suggests you hold shares then you take their advice.
“We jealously guarded those shares like you would gold bars,” A 60 year old baker told Bloomberg, “Buying your bank’s stock was the traditional thing to do. We got it badly wrong.”
Of course what everyone forgets is that banks are not there to look after you. They are there to make money. They do this almost instantly the second you deposit funds, it’s their money. The second you take out a loan, they own you. The second you buy shares, they have a license to be reckless.
Naively treating anything other than gold like gold is the first step in financial mismanagement. Nothing is like physical, allocated and segregated gold. For a start it is all yours.
Is your government or the EU there for you? Don’t bet on it
A bail-in forces creditors of a bank to shoulder losses when the firm fails. The term covers cover every case of creditor loss-sharing when a bank goes belly-up.
This is different to events we saw during the 2008 financial crisis when taxpayers tended to bail-out banks. Since 2016 European Union rules have stated there must be a bail-in before a government bailout is allowed.
Governments would clearly like to prevent savings of hardworking individuals and businesses from being wiped out. However they are fearful of the EU, trying to skirt their bail-in rules would no doubt sour relations with a body that is keen to stick to rules it only recently passed.
There is a conflict of interest it seems between pleasing the EU and doing the right thing by voters.
Given Brexit and now Catalonia the EU is unlikely to be in the mood to bend its rules for another troublesome country. This is despite it costing the EU’s own citizens billions of euros in lost savings and investments.
This is a risk for the EU, especially in Italy where there is already strong anti-EU sentiment. The case of Veneto, where 75% require more power and 15% would like to see total autonomous rule is another Catalonia again. A further sign of increased populism thanks to an overbearing and indifferent EU.
Invest in gold, or prepare to fail
Depositors and investors should be aware of their country’s requirements when it comes to keeping their money safe in the banks. Whilst bail-ins will at present only hurt those who hold deposits above EUR 100,000, there is little stopping the protected amount being decreased, or ignored altogether.
For those living in the EU, the European Commission has forced all 28 countries to implement bail-in legislation. This means depositors must be more vigilant than ever about the health of a particular bank, and the risk exposure of their portfolio. This means diversifying your invesments and decreasing the level of counterparty exposure.
One area of portfolio diversification that is growing due to concerns over the safety of bank accounts, is gold investment which saw a 15% climb in Q2 of 2016. Europe, in 2015, showed the largest regional demand for gold bars and coins (an increase of 12% year on year).
Unallocated gold is as much at risk as any other asset exposed to counterparties. Savers and businesses can protect their wealth by investing in allocated gold, in segregated accounts. This gives your outright legal ownership. There are no counterparties who can pop along after going bust and take what is legally theirs. It cannot be made to disappear overnight.
Gold is the financial insurance against bail-ins, political mismanagement and overreaching government bodies.
Read our guide on how to protect yourself from bail-ins here
News and Commentary
Gold logs a 1.1% monthly loss in October (MarketWatch.com)
Gold falls as dollar recovers, Fed chair in focus (Reuters.com)
Small Caps Lead U.S. Stocks Higher as Dollar Gains (Bloomberg.com`)
Consumer confidence climbs to a nearly 17-year high in October (MarketWatch.com)
CME to launch bitcoin futures in fourth quarter subject to approvals (Reuters.com)
Credit: Wall Street Journal
Gold vs. Bitcoin: Goldman Sachs Weighs In (DailyReckoning.com)
Why Is Bitcoin a Big Deal? (CharlesHughSmith)
One Misstep Now Would Cost the Bank of England Its Credibility (Bloomberg.com)
Britain accelerates Brexit plans, divorce talks also to speed up (Reuters.com)
China has grand ambitions to dethrone the dollar. It may make a powerful move this year (CNBC.com)
Gold Prices (LBMA AM)
01 Nov: USD 1,279.25, GBP 961.48 & EUR 1,099.52 per ounce
31 Oct: USD 1,274.40, GBP 964.21 & EUR 1,095.60 per ounce
30 Oct: USD 1,272.75, GBP 966.91 & EUR 1,093.80 per ounce
27 Oct: USD 1,267.80, GBP 968.35 & EUR 1,090.18 per ounce
26 Oct: USD 1,278.00, GBP 968.34 & EUR 1,082.34 per ounce
25 Oct: USD 1,273.00, GBP 964.81 & EUR 1,081.67 per ounce
Silver Prices (LBMA)
01 Nov: USD 16.94, GBP 12.74 & EUR 14.55 per ounce
31 Oct: USD 16.82, GBP 12.72 & EUR 14.45 per ounce
30 Oct: USD 16.74, GBP 12.69 & EUR 14.39 per ounce
27 Oct: USD 16.72, GBP 12.76 & EUR 14.38 per ounce
26 Oct: USD 16.97, GBP 12.84 & EUR 14.37 per ounce
25 Oct: USD 16.89, GBP 12.75 & EUR 14.34 per ounce
Recent Market Updates
– Stumbling UK Economy Shows Importance of Gold
– Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Russia Buys 34 Tonnes Of Gold In September
– Gold Will Be Safe Haven Again In Looming EU Crisis
– Gold Is Valuable Due to “Extreme Rarity” – Must See CNN Video
– Gold Is Better Store of Value Than Bitcoin – Goldman Sachs
– Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash
– Key Charts: Gold is Cheap and US Recession May Be Closer Than Think
– Gold Up 74% Since Last Market Peak 10 Years Ago
– How Gold Bullion Protects From Conflict And War
– Silver Bullion Prices Set to Soar
– Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures
– Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver
END
Once the crooks are able to use bitcoin futures, you can bet that they will cause crypto prices to crumble
(courtesy CNBC/GATA)
So long, cryptos: CME Group plans bitcoin futures
Submitted by cpowell on Tue, 2017-10-31 13:53. Section: Daily Dispatches
Presumably governments and central banks will get volume trading discounts from CME Group on the new futures contracts as they do with the current ones:
http://www.gata.org/node/14385
http://www.gata.org/node/14411
* * *
CME Plans to Launch Bitcoin Futures by Year-End
By Evelyn Cheng
CNBC, New York
Tuesday, October 31, 2017
CME announced today that it plans to launch bitcoin futures in the fourth quarter of the year, pending regulatory review.
“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” Terry Duffy, CME Group chairman and chief executive officer, said in a statement:
http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_a…
In Augus, the Chicago Board Options Exchange, the largest U.S. options exchange, said its CBOE Futures Exchange plans to offer cash-settled bitcoin futures in the fourth quarter of this year or in early 2018, pending review from the U.S. Commodity Futures Trading Commission. …
… For the remainder of the report:
https://www.cnbc.com/2017/10/31/cme-plans-to-launch-bitcoin-futures-by-y…
end
Question; how did the Royal Bank of Canada purchase a gold bar without testing it?
(courtesy CBC/GATA)
Fake gold wasn’t ours, Royal Canadian Mint says
Submitted by cpowell on Wed, 2017-11-01 01:37. Section: Daily Dispatches
From Canadian Broadcasting Co. News, Ottawa
Tuesday, October 31, 2017
http://www.cbc.ca/news/canada/ottawa/fake-gold-not-ours-mint-says-1.4380…
A gold bar purchased in Ottawa that turned out to contain no gold did not come from the Royal Canadian Mint, the Crown corporation said today.
The mint’s statement came the day after CBC News reported that tests showed the 1-ounce gold bar, purchased last month by an Ottawa jeweler from a Royal Bank branch in the Glebe, indicated it contained none of the precious metal.
The bar was stamped with the Royal Canadian Mint’s insignia and the packaging it came in bore the mint’s name.
But the mint said it didn’t originate there.
“The Mint did not manufacture, ship, or sell the above-mentioned product,” the mint said. The mint complained the discovery and subsequent news report “has raised unfounded speculation as to the origins of the counterfeit and the purity of Royal Canadian Mint bullion products.
“Counterfeiting of Royal Canadian Mint products is extremely rare and this is an isolated case,” the statement continued. “We take suspicion of counterfeit seriously and work with law enforcement to support their investigations.”
According to the statement, the mint tests all its gold products to ensure they’re 99.99 per cent pure.
But despite the mint’s claim that counterfeits are rare, a quick internet search shows such products abound.
For example, the online retailer Wish.com offers what it describes as a “Canadian Gold Bar 1 OZ .9999 Premium Gold” for a price of $13 plus shipping.
The bar shown also bears the stamp of the Royal Canadian Mint.
“It boils down to product knowledge,” said veteran coin collector Sean Isaacs. “And the first line of defense is knowing what you’re dealing with.”
Calling it a “critical, frontline tool” for the bullion and coin dealer, Sean Isaacs said he paid about $1,100 for his Sigma Analytics precious metal verifier.
The verifier works by analyzing the conductivity of precious metals such as silver and gold.
Isaacs said a reliable verifier is something every bank dealing in precious metals should have on hand.
“The average teller at a bank I don’t think has the training to recognize those [counterfeit] products, which is why, in my opinion, you either need a tool to allow you to do that, or the product knowledge to know what you’re handling.”
RBC spokesperson Anika Reza confirmed today the incident is being investigated internally but wouldn’t say if the bank is making changes to how it handles and verifies bullion.
Isaacs said the fake gold bar purchased in Ottawa last month probably wasn’t even made in Canada.
“It’s very likely produced overseas, as with the packaging,” he said. “It doesn’t help anyone when something like that turns up in the market, and particularly when it’s sold by a financial institution.”
Brian Bosse, an analyst with Murenbeeld & Co., a Toronto-based forecaster of gold prices for the mining and investment sectors, has the same concern.
Bosse said if it’s learned that more of the counterfeit bars are in circulation, the result would be a chill on the gold market.
“This is not a one-off. Nobody does this once. The real question is: How did this get into RBC’s inventory?”
Bosse said most buyers never question the authenticity of gold bars purchased from banks.
“They know they bought it from a bank, so they’re sure that it’s good. But that concept is now under attack if there’s more than one of these out there.”
end
Retail sales of gold has been dismal in the west as bitcoin seems to have replaced gold as a safe haven. However Eastern nations are taking up the slack and buying gold hand over fist
(courtesy zerohedge)
“It’s Been Dismal” – Gold Coin Sales Slump As ‘Bugs’ Bounce To Bitcoin
Gold prices are rallying, but retail gold dealers and shops are struggling to survive.
As The Wall Street Journal reports, businesses that sell gold coins and other products made from the precious metal usually thrive during years like 2017.
Gold futures have gained more than 10%, boosted by a weaker dollar and by big investors looking for a haven during recent geopolitical tensions surrounding North Korea and Iran.
But despite higher bullion prices and solid demand from not-American-central banks, American Eagle Coin sales by the US Mint in October 2017 are down 87% YoY for gold and down 73% YoY for silver…
h/t @Gloeschi
The weak demand is taking a toll on gold dealers, some of whose sales have dropped as much as 70% compared with last year, according to Jeffrey Christian, managing partner at market-research firm CPM Group.
“It’s been absolutely dismal,” said Peter Thomas, senior vice president of metals at Zaner Precious Metals, a Chicago precious-metals dealer.
“A lot of guys have been really hurting.”
And as WSJ notes, one reason for the declining business: A number of retail buyers are turning to cryptocurrencies like bitcoin to store money during periods of stress, some analysts say.
Bitcoin has “taken some of the dedicated interest in gold away from gold,” said Mohamed El-Erian, chief economic adviser at Allianz SE, who warned at a CME Group event in September that cryptocurrencies could pose a long-term threat to the precious metal.
While gold buyers historically have looked to the precious metal as a place to hide during a market selloff, some suggest that virtual currencies are a new “hedge against chaos.”
Mr. Thomas of Zaner Precious Metals said authorized gold purchasers who buy directly from the U.S. Mint have been getting hurt, too, because of waning dealer demand.
“They end up having to stockpile coins,” he said.
“You would expect gold to be rocking at the present time, but it’s not,” said Ross Norman, head of London-based gold dealer Sharps Pixley.
Furthermore, small investors appear to be getting gold exposure though ETFs with more than $8.5 billion flowing into State Street’s gold ETF, the largest gold ETF, since the end of 2015, reversing three years of net outflows and marking the biggest period for inflows since 2009, according to FactSet.
Jim Rickards (and Goldman) recently opined on the Bitcoin vs Gold debate…
From my perspective, you might as well discuss gold versus watermelons or bicycles versus bitcoin. In other words, it’s a phony debate. I agree that gold and bitcoin are both forms of money, but they go their own ways.
There’s no natural relationship between the two (what traders call a “basis”).
The gold/bitcoin basis trade does not exist. But people love to discuss it, and I guess Goldman Sachs is no different.
Goldman Sachs has released a new research report that comes down squarely on the side of gold as a reliable store of wealth rather than bitcoin, which is untested in market turndowns.
Precious metals like gold are “neither a historic accident or a relic,” said the report.
It affirmed that gold is more durable than cryptocurrencies because cryptocurrencies are vulnerable to hacking, government regulation and infrastructure failure during a crisis.
Goldman also reminds us that gold holds its purchasing better than cryptocurrencies and has much less volatility. In dollar terms, bitcoin has had seven times the volatility of gold this year.
Since Goldman’s research department has not been notable as a friend to gold, the fact that they favor gold over bitcoin is highly revealing in more ways than one.
I don’t deny that bitcoin has made some people multimillionaires, but I also believe it’s a massive bubble right now.
I don’t own any bitcoin and I don’t recommend it. My reasons have to do with bubble dynamics, potential for fraud and the prospect of government intrusion.
So bitcoin evangelists seem to think I’m a technophobe. But I’ve read many bitcoin and blockchain technical papers. I “get it” when it comes to the technology.
I even worked with a team of experts and military commanders at U.S. Special Operations Command (USSOCOM) to find ways to interdict and disrupt ISIS’ use of cryptocurrencies to fund their terrorist activities.
I will say, however, that I believe in the power of the technology platforms on which the cryptocurrencies are based. These are usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.
So although I am a bitcoin skeptic, I believe there is a great future for the blockchain technology behind them.
I’m not telling anyone not to own cryptocurrencies, but you need to do your homework before you do.
* * *
Finally, this gentlement seems to sum up the general perspective…
“You can’t be parked in gold,” said Casey Frazier, a government administrator in Woodstock, Conn., who used to hold nearly a third of his savings in gold.
He has moved some of his money into the booming stock market, and now his precious-metals allocation is down to 10%.
end
Turkey’s gold imports surged by 13.8 billion dollars (350 tonnes) this year.
(Sharp’s Pixley)
Turkey gold imports surge as central bank boosts reserves November 01 2017
Turkey purchased a record $13.8bn of gold from abroad this year, $9.8bn more than in the same period last year, Bloomberg reported. The central bank has also increased its gold holdings to a three-year high, boosting its vault of precious metals by $7.5bn since December, according to official figures. The central bank’s action comes after President Recep Tayyip Erdogan called for Turks to use gold instead of dollars last November, in an effort to stem the depreciation in the Turkish lira, which has dropped another 7% against the dollar this year.
-END-
LAWRIE WILLIAMS:
Chinese demand from its citizenry up 15%
Chinese gold demand up over 15% YTD
Perhaps the biggest unknown in assessing global gold consumption in this, or any, year is the true level of Chinese gold consumption. The major analytical consultancies like Metals Focus, GFMS and CPM Group all tend to come up with Chinese gold consumption figures based on relatively narrow definitions of demand. Yet these figures tend to be substantially lower than known gold imports from those countries which break these down in their own export statistics. We have preferred to measure Chinese demand by Shanghai Gold Exchange withdrawal numbers, which tend to be far closer to the known Chinese gold import figures, plus China’s own gold production with an allowance for an element of scrap supply. The consultancies will all come up with a variety of often different reasons why SGE withdrawals are not representative of true Chinese demand – but we’ll stick to them as our measure given their correlation to known gold flows into mainland China.
On our latest assessment – see: Chinese SGE gold demand UP in September – demand as represented by SGE withdrawals is indeed running rather higher than a year ago, a fact that mow appears to be borne out by the latest figures from the China Gold Association. These suggest that in the nine months to end-September, Chinese demand for gold bars and jewellery was sharply higher than for the same period a year earlier. According to the Association consumption of gold bars went up 44.45% to 222.07 tonnes, while that for gold jewellery rose 7.44% to 503.87 tonnes with total consumption up 15.49% to 815.89 tonnes suggesting an annual total of well above 1,000 tonnes given demand tends to pick up ahead of The Chinese New Year.
Although the China Gold Association figures show a very positive increase in the nation’s gold consumption year- on-year, we still feel it falls well short of total gold flows into Chinese hands as represented by reported imports plus China’s own gold production – although the latter is seen as falling by some 3.76% over the first nine months of the year. The Association attributes the production fall on new rules to raise environmental requirements on solid waste from gold prospecting, leading to a wave of gold mine closures and output declines in the major producing provinces, including Shandong, Jiangxi and Hunan.
It will be interesting to see if the apparent increase in consumption is also reflected in the October SGE withdrawal figure – probably due out next week. October tends to be a short month for the SGE statistics as the exchange was closed for the Golden Week holiday – although this will have applied to previous years as well.
https://www.sharpspixley.com/articles/lawrie-williams- chinese-gold-demand-up-over-15-ytd_273439.html
end
Now German Investors are now flocking into gold
(Simon Osborne /EXPRESS CO UK)
Germany fears EUROZONE MELTDOWN: German investors rush to buy gold
GERMANY has become the world’s biggest buyer of gold amid fears of economic meltdown across the eurozone.
By SIMON OSBORNE
PUBLISHED: 08:25, Wed, Nov 1, 2017 | UPDATED: 09:40, Wed, Nov 1, 2017
German investors have developed a fondness for gold
Figures from the World Gold Council (WGC) reveal the country invested a record ú6billion in gold bullion and coins as well as in exchange-traded products.
Analysts say improved availability, low prices and growing demand due to loose monetary policy, economic uncertainty and volatile geopolitical factors are the three key reasons behind the German investors’s gold rush.
Their fondness for gold is a relatively recent development and before 2008 investment in physical gold barely registered with average annual demand at 17 metrics tons.
The country invested a record ú6bn in gold last year
But then the financial crisis struck and sparked a series of events that ultimately pushed many Germans into seeking a more reliable store of value.
A WGC report said: “While the world fretted about Lehman Brothers, German investors worried about the state of their own banking system.
“Landesbanks, the previously stable banking partners of corporate Germany, looked wobbly. People feared for their savings.”
Economic development in Germany has been strong over the past decade but investors have been very cautious about the risks to European financial and political systems.
Germany is now the world’s biggest buyer of gold
And the latest surge in demand for gold in Germany is being fuelled by fears of the economic impact of Brexit and Catalonian independence efforts, high public debt worldwide, successive bail-outs of Greece, fall-out from the migrant crisis and the resurgence of nationalist politics.
Low growth rates and productivity in some European Union regions and the lack of confidence in central banks have also contributed to the lure of gold.
The WGC report said while gold’s recent rise to popularity in Germany was sparked by financial and economic crises, it no longer needed those drivers to move forward.
It said: “Despite the dramatic growth in the past 10 years, we believe there is room for further growth.
“Though demand growth from institutional investors is uncertain, there is latent demand for gold among retail investors.
“Having made it easy for investors to buy bars and coins, retailers are also marketing them effectively.”
Video Link:
http://www.express.co.uk/news/world/873950/germany-fears- eurozone-meltdown-german-investors-buy-gold
-END-
Now Iran is preparing its infrastructure to accept Bitcoin adoption
(courtesy zerohedge)
Iran Is Preparing Infrastructure For Bitcoin Adoption
Amid rising speculation whether Catalonia will adopt some cryptocurrency should it follow through with plans for independence, and in the context of articles such as this from Vice that “Russia is going all in on bitcoin“, one country appears to be preparing to accept bitcoin as digital legal tender: Iran.
In an interview published last week with the Farsi newspaper Shargh, the Iranian Deputy Minister of Information and Communication Technology, Amir Hossein Davaee said that”The ministry of communications and information technology has already conducted a number of research studies as part of efforts to prepare the infrastructure to use Bitcoin inside the country.”
He went on saying the crypto currency has two aspects: Economic and infrastructural. “We as the main center in Iran dealing with the country’s technology developments have taken very seriously the issue of preparing the infrastructure for the new currency.”
Quoted by the Iran Front Page, the Iranian official went on to say that such digital infrastructure is part of the soft power of each country and said entrance of the currency into Iran will end up in the general interests of the country. “Arrangements are being made with the related organizations to put together the infrastructure as early as possible.”
One reason for Iran’s eagerness to escape a dollar-denominated world is that as part of the original sanctions against the country four years ago, SWIFT removed Iran from its network, cutting off the country’s banking system from global networks and making dollar-denominated transactions impossible, in the process crippling Iran’s oil exports which only came online following Obama’s nuclear deal. Being locked out of US dollar commerce, Iran’s economy suffered for many years from financial sanctions which crippled the ability of local exporters and importers from working with international counterparts.
With US President Donald Trump taking a hostile approach to the Islamic republic, and with the Nuclear deal on the verge of collapse due to disagreements over the country’s nuclear and ballistic missile programs, it should come as no surprise that Iran is testing how to bypass possible new financial sanctions using Bitcoin, beyond merely local use.
* * *
Meanwhile, speaking at a Russia and China heads of government meeting on Wednesday, Russian Prime Minister Dmitry Medvedev said that the international financial system needs to balance which is why there is no place for a dominant currency, referencing the US dollar.
“The balanced system of financial relations should be based on the use of various reserve currencies, various forms of settlement. There should be no domination of any one currency,” Medvedev said, adding that no matter how strong the American economy, it also faces problems from time to time. “As a result, the entire financial world is shaken. A more balanced international financial system is better for everyone.”
According to Medvedev, Russia was pleased with the growing role of the Chinese yuan in global settlements, as it represents one of the world’s largest economies. In May, Russia and China established an investment fund worth 68 billion yuan ($10 billion).The countries also plan to extend the bilateral currency swap agreement for another three years. In 2014, Russia and China agreed on a 3-year ruble-yuan currency swap deal of up to $25 billion.
China has been pushing for a greater use of the yuan in oil settlements. As the country has become the largest oil importer overtaking the United States, it can now dictate rules, experts note. The chief economist and managing director at High Frequency Economics Carl Weinberg has predicted that “Chinese [oil] demand will dwarf US demand,” and Beijing is likely to “compel” Saudi Arabia to sell crude oil in yuan, a move to be followed by others. We discussed this last week, when we noted that China is expected to roll out a yuan-denominated oil contract, i.e. a “Petroyuan”, within the next two months.
end
Your early WEDNESDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED UP AT 6.611/shanghai bourse CLOSED UP AT 2.57 POINTS .08% / HANG SANG CLOSED UP 348.52 POINTS OR 1.23%
2. Nikkei closed UP 408.47 POINTS OR 1.86% /USA: YEN RISES TO 113.99
3. Europe stocks OPENED ALL GREEN /USA dollar index RISES TO 94.63/Euro DOWN TO 1.1639
3b Japan 10 year bond yield: FALLS TO +.061/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.72/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 55.01 and Brent: 61.48
3f Gold UP/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./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.372%/Italian 10 yr bond yield DOWN to 1.789% /SPAIN 10 YR BOND YIELD DOWN TO 1.459%
3j Greek 10 year bond yield FALLS TO : 5.411???
3k Gold at $1277.50 silver at:16.96: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 18/100 in roubles/dollar) 58.16
3m oil into the 55 dollar handle for WTI and 61 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (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 GOOD SIZED REVALUATION NORTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.99 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0006 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1641 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.372%
The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.
4. USA 10 year treasury bond at 2.390% early this morning. Thirty year rate at 2.889% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
World Stocks Soar To New Record Highs As Oil, Metals Surge Ahead Of The Fed
US equity futures have hit a new records, helped by surging Asian and European stocks which have all started November on a euphoric note. Surging commodity prices, optimism about tax reform and hope for a new dovish Fed chair all combined to drive global stock markets to record highs on Wednesday, with the MSCI’s world stock index climbing 0.3% to a fresh all time high. Mining stocks lead gains as nickel and other industrial metals soar. Oil rose above $55 a barrel for the first time since the start of the year in the longest winning streak in three months, on hopes that major producers would maintain their output cuts. The dollar firmed ahead of a Fed rate decision while bitcoin surged to a record high just under $6,600.
As Bloomberg summarizes in its Macro Squawk Wrap, equities globally extended gains as investors await Fed developments, with a rate decision due today and announcement of the next chair expected on Thursday. Euro Stoxx 50 futures advance for a third-straight day, while S&P 500 futures set fresh day highs in the European session. Treasury futures trade in tight ranges after earlier weakening; block trades emerge, consistent with selling of U.S. bonds and buying of German debt. U.K. Oct. manufacturing PMI beats estimates, buoying sterling and sending GBP/USD above 1.3300 for the first time in weeks. WTI futures climb above $55/bbl to hit highest level since January; base metals gain broadly as nickel futures trade limit up in Shanghai.
Among the proposed explanations for today’s melt up is that we are witnessing a compressed and accelerated version of the Halloween rally, as summarized in the following Robeco chart:
Whatever the reason, the buying today is unstoppable, with the European STOXX 600 index climbing to its highest level since August 2015 as stock markets in London, Paris and Frankfurt gained 0.5 to 1.2 percent in early trade. As a result, the Stoxx 600’s relative strength index has now climbed above 70, a level that indicates overbought conditions, for the first time in more than 2 weeks, and is heading for its highest level since Aug. 2015, led by cyclical sectors including miners, automakers and technology.
Europe’s jump followed a rally in Asia, where stock markets hit 10-year highs, with most of the 19 industry sectors rising. As of Tuesday’s close, 45 percent of MSCI Europe companies had reported results for the third quarter, of which 66 percent either beat or met expectations, according to Thomson Reuters I/B/E/S data. The U.K.’s FTSE 100 Index rose 0.3 percent to the highest in a week. Germany’s DAX Index increased 1.3 percent to the highest on record. DAX outperforms as German participants return to market from Reformation Day
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9%, led by a 1.3% jump in South Korea. South Korea’s economic growth accelerated to its fastest pace in seven years last quarter. Growth in Taiwan during the same period was the strongest in 2 1/2 years. Of note in Asia was Japan, where the stock meltup was most pronounced with the Nikkei rising nearly 2%, and the Topix index rising to the highest in more than a decade, buoyed by a weaker yen, as a surge in U.S. consumer confidence in October served as the latest confirmation of a global economic recovery ahead of a Federal Reserve policy decision on Wednesday. Electronics makers gave the biggest boost to the Topix as Sony jumped 11% to the highest level since June 2008 after lifting its annual operating profit outlook to a record, after the company announced record annual profit in 2017 owing to strong sales of semiconductors and favorable exchange rates. Tokyo Electron surged after posting results that beat expectations. The Nikkei 225 gained 5.5% in October, its strongest showing in 11 months. “Investors are gaining confidence as the global economy is solid,” said Masaaki Yamaguchi, an equity market strategist at Nomura Holdings Inc. in Tokyo. “Not only exporters but also domestic-demand-oriented companies are improving earnings.” “Business confidence and corporate earnings are good in the U.S., and business sentiment is improving globally,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “Stocks are inclined to rebound, with a series of good earnings results. There’s more room for high-tech related shares to rise.”
India’s benchmark equity indexes climbed to fresh records after a World Bank report showed it’s easier to do business in the nation. The S&P BSE Sensex rose 1.2% to 33,600.27 while the NSE Nifty 50 Index jumped 1% in Mumbai. Twelve of the 19 sectoral sub-indexes compiled by BSE Ltd. climbed, led by a gauge of telecom companies. Bharti Airtel Ltd. gained the most on the Sensex after the country’s largest wireless carrier said “reputed global investors” had expressed interest in buying a stake in its Bharti Infratel unit.
The dollar and Treasuries held steady ahead of a Federal Reserve decision expected to signal a rate rise is still in the cards for December. The New Zealand dollar surged after the country’s unemployment rate fell, while the yen led losses on reports Japan may plan for an increased budget and reappoint Bank of Japan Governor Haruhiko Kuroda. European stocks jumped to a two-year high. The dollar’s index against a basket of six major currencies stood at 94.60, down from last week’s three-month peak of 95.15. The euro was little changed at $1.1644, some distance from the three-month low of $1.1574 it touched on Friday after the European Central Bank’s stance was perceived to be more dovish than expected. The biggest currency mover was the New Zealand dollar. It jumped over 1 percent to $0.6931 after the country’s jobless rate sank more than expected to a nine-year low of 4.6 percent. Bitcoin hit another record high above 6,600, boosted by bets the crypto-currency might enter the financial mainstream after the world’s largest derivatives exchange operator said on Tuesday it would launch bitcoin futures. The yield on 10-year TSY rose 1bp to 2.39%. Germany’s 10-year yield also climbed 1 bp to 0.37% while Britain’s 10-year yield rose less than one basis point to 1.335%.
The Bloomberg Commodity Index climbed to the highest since March as WTI crude rose above $55 a barrel and industrial metals advanced, buoyed by optimism that demand from China won’t falter after a gauge of Chinese manufacturing suggested growth momentum remains robust. Nickel has been on a tear since Tuesday after Trafigura joined Glencore in revealing bullish forecasts because of the popularity of electric cars. Nickel sulphate is a key ingredient in lithium-ion batteries.
Meanwhile, in the US, Wall Street’s three main indexes, the Dow, S&P and Naz, ended October with their biggest monthly gains since February. The focus remains firmly on central banks. In the U.S., the Federal Reserve is expected to keep rates on hold Wednesday while signaling an all-clear for a December hike. An announcement on who will helm the U.S. central bank is due by the end of the week, with current board member Jerome Powell said to have the edge over the likely more hawkish John Taylor. The Bank of England will probably lift borrowing costs on Thursday for the first time in a decade.
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller. Former Trump adviser George Papadopoulos claimed campaign officials approved a pre-election meeting with Russian representatives. US House Tax Committee Chairman Brady said that after consultation with President Trump and leadership team, they have decided to postpone the tax plan release to Thursday. There were initial reports that GOP tax plan would delay repeal of estate tax and will have corporate taxes cut to 20% during the 1st year, according to sources. (WSJ) However, there were later conflicting reports that stated some House GOP Representatives were said to consider phasing out 20% corp. tax over a number of years
Elsewhere, bitcoin soared to a record after CME Group, the world’s biggest exchange operator, said it plans to launch futures trading on the cryptocurrency by year-end.
Economic events include Fed’s rate decision, manufacturing data from ISM and Markit. Companies reporting earnings include Facebook, Kraft Heinz, Qualcomm.
Bulletin Headline Summary from RanSquawk
Buoyant commodity prices and corporate earnings have help lift European bourses this morning
GBP failed to sustain gains in the wake of upbeat UK manufacturing PMI ahead of tomorrow’s BoE announcement
Looking ahead, highlights include ADP employment change, ISM manufacturing, DoEs and FOMC rate decision
Market Snapshot
S&P 500 futures up 0.4% to 2,583.00
STOXX Europe 600 up 0.6% to 397.40
MSCI Asia up 1% to 169.66
MSCI Asia ex Japan up 1% to 556.40
Nikkei up 1.9% to 22,420.08
Topix up 1.2% to 1,786.71
Hang Seng Index up 1.2% to 28,594.06
Shanghai Composite up 0.08% to 3,395.91
Sensex up 1.2% to 33,607.95
Australia S&P/ASX 200 up 0.5% to 5,937.77
Kospi up 1.3% to 2,556.47
German 10Y yield rose 0.3 bps to 0.366%
Euro down 0.03% to $1.1642
Brent Futures up 0.9% to $61.49/bbl
Italian 10Y yield fell 2.1 bps to 1.561%
Spanish 10Y yield fell 0.7 bps to 1.454%
Gold spot up 0.3% to $1,275.46
U.S. Dollar Index up 0.04% to 94.59
Top Headline News from Bloomberg
A suspected terrorist plowed a truck down a bicycle path in lower
Manhattan blocks from the site of the World Trade Center, killing eight
and seriously wounding several more before an officer shot and arrested
him
The biggest changes to the FOMC statement will probably come from an upgrade in its description of the U.S. economy. That would further cement the case for a move in December, though it’s unlikely that the committee will change the statement’s language to explicitly signal a rate hike; see FOMC decision day guide here
House tax writers pushed back the reveal of their highly guarded, long awaited tax bill by a day, a sign that disputes among Republican lawmakers are threatening their effort to pass comprehensive legislation by Thanksgiving
While an interest-rate hike by the BOE on Thursday is almost fully priced in, its nature is still in question, sending overnight volatility in cable to levels not seen since the Fed’s meeting in September
Caixin China October manufacturing purchasing managers’ index at 51, matching estimates and unchanged from September
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller
As investors eagerly await President Donald Trump’s Federal Reserve chair nomination, the central bank’s policy-setting committee will meet quietly in the background this week with many expecting them to keep interest rates unchanged
Treasury 10-year yield is set to climb toward 3 percent as the Fed could tighten three times in 2018 after a likely move in December, said James Ashley head of international market strategy Goldman Sachs Asset Management at the money manager
Best Buy Co. said it stopped some sales of Apple Inc.’s iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already expensive smartphones
Mylan NV’s second-ranked executive took an active role in a vast and “sinister” price-fixing conspiracy among global makers of generic pills that kept prices of the medications artificially high, dozens of states alleged in a new complaint; Mylan Bond Spreads Widen Amid Price-Fixing Probe
Former Trump adviser George Papadopoulos made a significant claim in an email: Top Trump campaign officials agreed to a pre-election meeting with representatives of Russian President Vladimir Putin
Bank of England’s governor Mark Carney faces a defining credibility test on Brexit-era rates
U.K. Hints at Compromises on Brexit Bill as Date Set for Talks
Macau Oct. Casino Rev. Rises 22.1% Y/y; Est. 14.5% Rise
Asian equity markets began November solidly on the front-foot led by the Nikkei 225 (+1.95%) as exporters benefited from a weaker JPY and with Sony at its highest in over 9 years after its H1 profit more than tripled. Elsewhere, KOSPI (+1.3%) extended on record levels and ASX 200 (+0.5%) was also higher amid strength in commodity-related stocks. Hang Seng (+0.6%) and Shanghai Comp. (+0.1%) both initially conformed to the broad positive sentiment amid continued liquidity efforts by the PBoC, although mainland indices then trimmed gains in late trade. Finally, 10yr JGBs were flat with demand subdued amid the heightened risk appetite and with a firmer 10yr auction also largely ignored. Chinese Caixin Manufacturing PMI (Oct) 51.0 vs. Exp. 51.0 (Prev. 51.0). PBoC injected CNY 140bln via 7-day reverse repos, CNY 40bln via 14-day reverse repos and CNY 60bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6300 (Prev. 6.6487)
Top Asian News
Hong Kong Stocks Advance as Tencent Climbs Most in a Month
China’s Onshore Junk Bonds Show Resilience on Supply-Side Reform
Iron Ore Flips as Traders Bet on Revival When China’s Curbs Ease
Japan Shares Jump on Yen Weakness; Sony Leads Tech Stock Surge
Noble Bonds Show Bet on Deal Delay as Hedge Funds See Trap
Tencent’s Red-Hot E-Book IPO Sets Stage for Music Arm Debut
European bourses have been likewise lifted by surging commodity prices and corporate earnings. However, Next’s (-5.4%) Q3 financial results have sent shares tumbling as much as 7%, which is also weighing on the retail sector with Marks & Spencer and AB Foods feeling the pressure. Standard Chartered have suffered losses this morning after their results printed lower than expected. DAX outperforms as German participants return to market from Reformation Day. Not even an upbeat UK manufacturing PMI and upward revision to the previous headline read enough to jolt Gilts, which high-ticked just ahead of the release before drifting back a mere 4 ticks or so. The range remains extremely narrow between 124.19-35, with the 10 year bond basically marking time ahead of BoE super Thursday to see what else the MPC has up its sleeve on top of the all but priced in ¼ pt rate hike. Bunds also trapped within tight parameters and poised for bigger market-moving events, like the FOMC and monthly US jobs data alongside the aforementioned BoE policy announcements (and QIR). US Treasuries a tad off recent highs/yields slightly firmer, also awaiting Trump tax reforms (now expected Thursday) and his long awaited choice as next Fed chair.
Top European News
Next Suffers as Warm Autumn Keeps Shoppers From Stores
Greece Is Said to Plan Debt-Swap Exercise Worth EU30 Billion
Turkey Raises Year-End Inflation Estimate to 9.8% vs 8.7%
U.K. Clothing Retailers May Decline After Next Sales Slump
In FX, GBP has moved above 1.33 this morning for the first time since mid-October, which comes ahead of the Bank of England’s ‘Super Thursday’ meeting, where it is expected they will raise the bank rate to 0.5%. The question is, whether this will be the beginning of a sustained hiking cycle or a readjustment from last year’s QE measures. Within the option market, O/N GBP/USD breakeven is at 100 pips for the ATM straddle. UK Mfg. PMI rose above analyst estimates, providing a modest lift to GBP, although the move had been somewhat contained given the focus on tomorrows BoE decision. The beginning of a new month sees a change in the direction for NZD. Having found support at the 2017 low (0.6817), while also looking stretched on the downside. NZD has seen a move back above 0.6900, which came after a strong NZ jobs report, in which unemployment unexpectedly fell to a 9-yr low, while jobs growth rose 2.2%. Given that the new PM is looking at reforming
the central bank act to have a dual mandate (inflation + employment) this somewhat raises the prospect of a rate hike. However, a
rate hike is not seen in OIS markets until Q4 2018 at the earliest.
JPY continues to weaken against the greenback amid the uptick in UST yields, which is looking to make a retest at 2.4%. Although,
114.00 has kept a lid on the gains in USD/JPY for now, touching a high of 113.97 overnight. Levels past 114.00 that could act as
near term resistance is the highs seen in May and July at 114.45 and 114.49 respectively.
In commodities, precious metals have been gaining throughout the morning to trade at intra-day highs with gold up USD 7.5/oz. Newsflow has been on the lighter side, however, according to Chinese state media, China’s 9-month gold consumption rose 15.5% Y/Y. WTI has extended on recent gains following a larger than expected drawdown in headline API crude inventories and as all other components of the release also showed declining stockpiles US API weekly crude stocks (23 Oct, w/e) -5.09M (Prev. 0.52M). Flows to Ceyhan have fallen to 216k bpd from 288k bpd seen yesterday, according to a port agent.
Looking at the day ahead, the key event on Wednesday evening will be the FOMC meeting there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Facebook and Tesla are amongst the notable earnings reports.
US Event Calendar
7am: MBA Mortgage Applications, prior -4.6%
8:15am: ADP Employment Change, est. 200,000, prior 135,000
9:45am: Markit US Manufacturing PMI, est. 54.5, prior 54.5
10am: ISM Manufacturing, est. 59.5, prior 60.8; Prices Paid, est. 67.8, prior 71.5; New Orders, prior 64.6; Employment, prior 60.3
10am: Construction Spending MoM, est. -0.15%, prior 0.5%
2pm: FOMC Rate Decision
Wards Total Vehicle Sales, est. 17.5m, prior 18.5m; Domestic Vehicle Sales, est. 13.7m, prior 14.3m
DB’s Jim Reid concludes the overnight wrap
October wasn’t a particularly scary month for investors with 32 out of our 39 regularly tracked global assets seeing a positive return in our monthly performance review. The S&P 500 (+2.33%) finished with a positive total return, meaning that the index has now seen a positive total return for all 10 months so far this year, the first time that this has happened in the 90 years we have data for. If you go beyond the calendar year end, October now marks the 12th positive month in succession which equals the record set in 1949-1950 and 1935-1936. A word of warning though, the next two months saw the run break spectacularly with returns at -3.6% and -7.7% respectively. See the note “S&P 500: The longest winning streak on record soon?” we did last month for more on this.
October didn’t end in a particularly exciting manner but the action kicks off today and continues apace until the end of the week. However there is a European holiday today so the usual first of the month PMI releases across the continent will be delayed until tomorrow. We do see the important ISM in the US though as well as ADP which will provide some clues to the storm bounce back in Friday’s payroll release.
Top of the bill (pardon the pun) today was supposed to be the next stage of the tax reform story. However, this morning we found out that the plans will be delayed until tomorrow, reflecting “the challenge of crafting and then passing a complex bill by Thanksgiving”. By then, we’ll see if there are any compromises in preserving deductions for state and local taxes which could impact Republican support in California and NY. We’d expect there to also be some focus on whether there is a phasing in of corporate taxes as per the leaks on Monday. Overnight, President Trump noted that “we’re not looking at that (phase in)”, but did left the door open by noting “it’s something, some people have mentioned, but hopefully not”. So all eyes on the House tomorrow. The FOMC meeting today should largely be a non-event, especially as there is no press conference. With a December hike priced at around 85%, it seems unlikely the Fed would want that number to change too much at the moment as it seems to suit them as things stand. They want to raise rates next month but leave a little wiggle room not to if events transpire against them over the next few weeks. DB’s Brett Ryan has previewed the meeting here.
Turning to Catalonia where tensions appear to have cooled further. Speaking in Brussels, ousted Catalan President Puidgemont denied he is seeking political asylum as he is here as a normal “EU citizen”. Further, he noted “the (Catalan) republic cannot be built on violence” and that he would return to Spain “immediately” if he gets “guarantees” of a fair trial. Note that the Spanish National Court has charged him for sedition where if convicted could carry jail terms of up to 30 years. Finally, he will press on with the region’s case for independence, but will respect the outcome of the new regional election scheduled on 21 December. As a reminder, El Mundo reported on Monday that opinion polls suggest Catalan secessionists could win 65 seats in a new election, but fall short of the 68 seats needed for new majority. On the other side, Spanish government officials told Bloomberg that there has been no signs of disobedience so far in Catalonia and article 155 measures are now fully in place. Yesterday, the Spanish markets rebounded further on increased signs of a return to normality with the IBEX up 0.74% and 10y yields down 3.5bp.
Now onto Brexit headlines, where there appears to be more signs that the UK may partly concede to break the stalemate in Brexit talks. One of the key issues is the potential financial settlement the UK owes to the EU bloc, where prior reports suggest the EU bloc want €60bln, while the UK only offered €20bln. Yesterday Brexit Secretary Davis noted “the withdrawal agreement…will probably favour the EU in terms of things like money and so on”. On the other hand, UK government spokesman James Slack noted that Brexit preparations have been accelerated with c3,000 new government jobs created to support Brexit planning, and that “each of these plans prepares the country for the range of negotiated outcomes and a no deal scenario”. Elsewhere, the main UK opposition party is seeking to apply parliamentary pressure on the government to release 58 studies on how leaving the EU will affect industries that make up c90% of the economy. Turning to the EU, the chief negotiator Barnier has offered some support and noted “I’m ready to speed up negotiations”, with the next round of Brexit talks to begin from 9th November.
This morning China’s October Caixin manufacturing PMI was in in line and steady at 51. Markets are rebounding, with the Nikkei (+1.28%), Kospi (+1.11%), Hang Seng (+0.52%) and ASX 200 (+0.57%) all up as we type. Now recapping markets yesterday. Despite broadly supportive macro data, US bourses only edged slightly higher (S&P +0.09%, Dow +0.12%), as investors await for more news re the FOMC, Fed Chair and draft tax plans. The Nasdaq rose a tad more (+0.43%) to a fresh record high, partly aided by further positive momentum from Apple shares (+1.39%). European markets were broadly higher too, with the Stoxx 600 up 0.33%, with gains led by real estate, energy and tech stocks, with partial offsets from financials including BNP Paribas (-2.67%) post its results. Across the region, the FTSE (+0.07%) was up slightly while the DAX was closed for the day and Spain’s IBEX gained 0.74% as tensions in Catalonia cooled further.
Over in government bonds, yields were mixed but little changed post the mini bond rally on Monday. The UST 10y rose 1.1bp while core European yields slightly outperformed (Bunds & Gilts -0.3bp; OATs -0.8bp) following lower than expected core inflation prints for the Eurozone (0.9% yoy vs. 1.1% expected). Peripherals continued to outperform, with Italian and Spanish 10y yields down 2bp and 3.5bp respectively.
Turning to currencies, the US dollar index (-0.01%) and the Euro (-0.04%) were broadly flat, but Sterling gained 0.57%, partly aided by an expectation of a rate hike this week and news that UK First secretary of state Damian Green was appointed as the new head of Brexit and Trade cabinet sub-committee, as some view him as having a pro-EU stance. In commodities, WTI oil rose +0.42% while precious metals weakened modestly (Gold -0.38%; Silver -0.82%), but LME nickel jumped 5.31%, in part as some see materially higher usage of the metal in electric cars. This morning, other base metals are broadly trading higher (Copper +1.30%; Zinc +1.57%; Aluminium +0.12%).
Away from the markets, the world’s large exchange owner (CME) is planning to have futures on Bitcoins by the end of the year. The contracts are expected to be settled in cash and use a daily price from the CME CF Bitcoin reference rate, with likely data feeds from digital exchanges such as Bitstamp, GDAX, itBIT and Kraken. A functioning derivatives markets on the digital currency could increase accessibility as professional investors could get exposure to its volatility and trade it on regulated venues as well as using the futures as a hedging tool. As a reminder, the price of a Bitcoin will set you back c$6,425, where the price has tripled from c3 months ago, up c8x since 12 months ago and up c475x since 5 years ago.
Turning to central banker commentaries, the ECB’s governing council member Visco noted that the Eurozone low inflation “reflects very moderate wage dynamics in several economies, which are a consequence of still large labourmarket slack”. Elsewhere, he noted that ECB’s QE recalibration ‘will ensure a high degree of monetary accommodation’. Then onto Italy more specifically, he noted their internal surveys suggests a “gradual pick up of credit demand, supported by a recovery of investment” and core tier 1 ratios for Italian lenders have improved to 13.1% (from 11.5%), which partly supports S&P’s recent upgrade of Italy’s sovereign rating to BBB.
Following up the indictments by Mueller from yesterday, Bloomberg noted former Trump adviser Papadopoulos claimed in an email that top Trump officials agreed to a pre-election meeting with representatives of the Russian President Putin. However, there was no indication such meeting took place and the email was NOT included in court documents as part of his guilty plea.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the macro data was in line to above expectations. The CB consumer confidence rose to 125.9 (vs. 121.3 expected) – marking a record 17 year high. In the details, the present situation index rose 4.2pt to 151.1 (highest since 2001) and the expectations index rose 6.1pt to 109.1 (highest since March). The October Chicago PMI also rose 1pt to a 6 year high of 66.2 (vs. 60 expected). Elsewhere, the 3Q employment cost index (Fed’s preferred metric of wage inflation) was in line at 0.7% qoq, while the August Corelogic house price index was slightly above expectations at 0.45% mom (vs. 0.4%), leaving an annual growth of 5.9% yoy.
Across Europe, there was a deluge of macro data where broadly speaking inflation was lower than expected but GDP growth and unemployment beat expectations. In the Eurozone, the October core CPI was below expectations at 0.9% yoy (vs. 1.1%) even if some considered that there was noise in the series which included German holiday prices which might not persist. The 3Q GDP was higher than expected at 0.6% qoq (vs. 0.5%) and 2.5% yoy (vs. 2.4% expected) – the strongest rate of growth since 1Q11. The unemployment rate for September also beat at 8.9% (vs. 9% expected).
In France, 3Q GDP was in line at 0.5% qoq, but data revisions to prior readings meant the annual growth was a tad higher at 2.2% yoy – highest since 2Q11. Elsewhere, the October CPI was in line at 0.1% mom and 1.2% yoy, while the September PPI was slightly above last month’s reading at 0.5% mom (vs. 0.4% previous). In Italy, the October CPI was below expectations at 0% mom (vs. 0.2%) and 1.1% yoy (vs. 1.3% expected) and the September PPI was also lower than the prior reading at 0.3% mom (vs. 0.5% previous). However, the September unemployment was in line at 11.1%. In the UK, the October Gfk consumer confidence reading was in line at -10.
Looking at the day ahead, front and centre on Wednesday evening will be the FOMC meeting although it’s worth noting that there is no scheduled Yellen press conference after. Along with the meeting we’ll also get some important data releases in the US including the ADP employment report, ISM manufacturing print for October and monthly vehicle sales. In the UK October house price data and the manufacturing PMI will be out. Onto other events, UK Trade Secretary Liam Fox testifies before a parliamentary panel on plans for post-Brexit trade while BoJ Deputy Governor Nakaso is due to speak. Facebook and Tesla are amongst the notable earnings reports.
3. ASIAN AFFAIRS
i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.57 points or .08% /Hang Sang CLOSED UP 348.52 pts or 1.23% / The Nikkei closed UP 408.47 POINTS OR 1.86/Australia’s all ordinaires CLOSED UP 0.49%/Chinese yuan (ONSHORE) closed UP at 6.611/Oil UP to 55.01 dollars per barrel for WTI and 61.48 for Brent. Stocks in Europe OPENED IN THE GREEN . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.611. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6112 //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA//
3b) REPORT ON JAPAN
end
3C CHINA REPORT.
The ghost collateral that we wrote about in 2014 is finally beginning to haunt traders. The first one to take a huge hit on lack of collateral financing trade is London based E D and F Man Company who is now caught with a phony warehouse receipt from China.
(courtesy zerohedge)
Chinese “Ghost Collateral” Scam Leads To Market “Shockwaves”, Huge Loss For Giant Commodity Trader
Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China’s banking system: namely that much of China’s staggering loan issuance had been built (literally) upon air and that trillions in loan collateral had been “rehypothecated” between two, three or many more debtors – or never even existed – forcing banks to accept that they would never recover much if any of the pledged collateral – in most cases various commodities – if the economy were to suffer a hard-landing resulting in mass defaults. The most famous example involved collateral fraud at China’s 3rd largest port, Qingdao, where numerous borrowers were found to have “pledged” the same collateral of steel and copper to obtain funding from various banks.
For those unfamiliar there is an extensive selection of stories covering the topic, which peaked three years ago, and then quietly faded away as China did everything in its power to deflect attention from what some have said is the biggest threat facing its economy: a giant hole . Below we link to some of our more comprehensive articles on the topic:
China’s “Evaporated” Collateral Scandal Spreads To Second Port
What Is The Common Theme: Iron Ore, Soybeans, Palm Oil, Rubber, Zinc, Aluminum, Gold, Copper, And Nickel?
China Faces “Vicious Circle” As Commodity Collateral Collapses
China Scrambling After “Discovering” Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing
Copper Plunges Most In 3 Months As “Rehypothecation Evaporation” Concerns Grow
Western Banks Scramble As China’s “Rehypothecation Evaporation” Goes Global
BIS Warns About Rehypothecation Threats
How China’s Commodity-Financing Bubble Becomes Globally Contagious
China’s Collateral Rehypothecation Fraud Is Systemic
To be sure, the story briefly resurfaced in May when we reported that “Some Chinese Banks Suspend “Interbank Business” As Regulator Demands That Collateral “Actually Exists”, although it then quickly fizzled again, for two reasons: i) China watchers assumed that Beijing no longer had a “collateral problem” which had been somehow fixed after all the noise rehypothecation stories from in 2014, and ii) China now seemingly has even bigger problems on its hands, such as finding the right balance between maintaining the latest housing bubble, keeping capital outflows in check and its currency stable at a time when China’s debt (well over 300% of GDP) was downgraded by Moody’s (and later S&P) for the first time in 28 years, while its gargantuan shadow debt powder keg is one big red headline away from a $9 trillion shadow bank run.
And while the latter is certainly accurate, the former couldn’t possibly be further from the truth.
That was revealed by a terrific June expose when Reuters reporters went to China to determine the current status of China’s long-standing collateral problem. What they found was that “ghost collateral” continues to haunt countless loans across China’s debt-laden banking system, which is a problem because as we explained in 2014, and as Reuters noted “lax lending practices and overvalued collateral spurred the U.S. financial crisis in 2008. Now, banks in China face risks of their own as fraudulent borrowers and corrupt bankers burden the financial system with loans lacking genuine collateral.“
Fast forward to today, when China’s “ghost collateral” problem has re-emerged with a bang, and this time there is a quantifiable price tag. As Bloomberg reports, the giant agricultural commodities merchant ED&F Man Holdings Ltd., best known for trading sugar and coffee, has taken a major hit of about $80 million “after falling victim to a scam in the metals market.”
The scam, for those who have been following our reports on China’s ghost collateral, will be familiar: ED&F Man’s loss is linked to fraudulent metal-financing that was uncovered at a warehousing firm owned by Glencore Plc earlier this year, said Bloomberg’s sources. Back in 2013, we published an extensive discussion on the nature of China’s commodity-financing deals, many of which were designed as quasi-legal ponzi scheme, meant to boost liquidity and funding by rehypothecating the underlying collateral on numerous occasions; at the time copper was the preferred underlying asset, however with time this spread to virtually all commodities.
This tale of “missing” collateral comes at a bad time for ED&F Man, which was already nursing a smaller losses at its sugar unit.
The metals issue comes as ED&F Man had a tough year at its sugar business, with the 230-year-old commodities trader last month saying it would cut costs and headcount at the unit amid surplus supplies and low prices. The London-based firm this week said Chief Executive Officer Phil Howell is leaving after three years in the role and more than two decades at the company.
While the impact on the company’s final earnings won’t be clear until ED&F Man releases its annual financial statements, it will be sizable: last year the company reported pretax profit, adjusted for acquisitions, of $100.9 million, which means that China’s fake collateral has cost nearly one full year of net income for one of the world’s best respected independent traders.
Here’s what happened: Glencore’s Access World – one of the world’s biggest provider of LME warehousing and logistics services – warned customers in January that it found forged warehouse receipts circulating in the market. The announcement, Bloomberg writes “sent shock waves through the commodities-trading industry, reawakening concerns about fraud after a metal-financing scam was uncovered at the Chinese port of Qingdao in 2014.”
Meanwhile, ED&F Man Capital Markets acted as a broker between Australia & New Zealand Banking Group and two Hong Kong-based trading companies in a sale-and-repurchase financing deal. The trade was backed by storage receipts for about $300 million of nickel stored in Access World warehouses in Asia, according to court documents filed by the bank in the U.S in June. However, when ANZ looked to sell the nickel, it discovered that all but one of the 84 storage receipts were likely to have been forged, leaving it with “substantial losses,” the bank said in court filings, which were part of a request for information it could use in lawsuits in other jurisdictions.
There is still some hope that ED&F Man can recover some losses…
Some of ED&F Man’s nickel-related losses could still be recovered when court proceedings are concluded, the people said. The company last month said its brokerage business in general continues to perform well.
Suedzucker AG, Europe’s largest sugar producer, has a 35 percent stake in ED&F Man.
… however, the odds are slim to none. In fact, what is surprising is that it has taken over three years for the first serious hit from China’s “ghost collateral” to emerge. Or perhaps not: in a time of generally rising prices, few if any traders actually bother to check if their pledged collateral ever exists. The problem emerges when prices decline, which courtesy of China’s bubble machine, has so far not been an issue. However, there are those random occasions when spot checks reveal shocking surprises, as Reuters reminded of over the summer:
The banker at the other end of the phone line was furious, recalled Shanghai lawyer Wang Chaoyu. A pile of steel pledged as collateral for a loan of almost $3 million from his bank, China CITIC, had vanished from a warehouse on the outskirts of the city. Just several months earlier, in mid-2013, Wang and the banker had visited the warehouse and verified that the steel was there. “The first time I went, I saw the steel,” recalled Wang, an attorney at Beijing DHH Law Firm, which represents the Shanghai branch of CITIC.
“Afterwards, the banker got in contact with me and said, ‘The pledged assets are no longer there.’”
Now, it was ED&F Man’s turn to make the same shocking discovery. However, with trillions in dollars “guaranteed” by Chinese “ghost collateral” based on various third party estimates, at least the giant commodity trader can find solace in the fact that it will not be the last to learn that “it’s gone… it’s all gone.”
END
4. EUROPEAN AFFAIRS
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
end
6 .GLOBAL ISSUES
Iceland
Iceland’s biggest volcano is set to erupt after the area had many earthquakes disturbing the caldera. The huge amount of eruption could could damage to flights over the area
(Mac Slavo/SHFTPlan.com)
Iceland’s Biggest Volcano Is “Ready To Erupt” As Europe Faces A Disaster
Authored by Mac Slavo via SHTFplan.com,
Iceland’s biggest volcano has been rocked by the strongest earthquake since it last erupted in 2014.
With swarms of earthquakes occurring in the French Alps too, Europe is facing what could be one of the largest natural disasters in history.
Last week, the 6,591-foot tall Bardarbunga, a “powerful and versatile” volcano, was rattled by the four largest earthquakes since it last erupted in 2014. The earthquakes, measuring in magnitudes of 3.9, 3.2, 4.7, and 4.7 on the Richter scale, struck the caldera region over several days last weekend. Another magnitude 4.1 earthquake hit the 200km long and 25km wide volcanic system earlier last week and several tremors struck in September.
Páll Einarsson, a volcanology expert at the University of Iceland, said the latest quakes are part of a series that have been “in progress for two years”. Speaking exclusively to Daily Star Online, he said the volcano is “clearly preparing for its next eruption” within the next few years.
Fears are spiking even higher when considering the earthquake swarm that has been rocking the French Alps recently.
The 10,000-year-old volcano spewed out large volumes of sulfur dioxide during its last seven-month eruption which took place between August of 2014 and February of 2015. Although the eruption did not disrupt any flights, the emissions harshly impacted the air quality in Iceland, leading to health consequences across the country.
In spite of describing the volcanoes activity as “high”, the Icelandic Met Office has yet to issue any warnings about the possibility of Bardarbunga’s eruption. In fact, the warning code remains green; meaning the volcano is in a normal, non-eruptive state, according to the volcano monitor.
Seven years ago Iceland’s massive Eyjafjallajökull volcano erupted, spewing a choking veil of ash across Europe. Residents worry as memories of the 2014 eruption and the flight chaos caused by the 2010 eruption of the Eyjafjallajökull volcano resurface.
The deadly volcanic dust wiped out skies and grounded 100,000 flights, resulting in the economy losing £4 billion.
Should an eruption of Bardarbunga take place, it’s highly possible that there would be another even more drastic air travel restriction and poorer air quality.
end
7.OIL ISSUES
Yesterday’s report on the API showed a huge drawdown. Today’s DOE showed little draw down and that disappointed our bulls in oil and gasoline.
(courtesy zerohedge)
WTI/RBOB Sink As Inventory Draws Disappoint
WTI/RBOB held on to gains overnight following major draws reported by API and more OPEC jawboning (this time from UAE), but the DOE data disappointed compared to API’s huge draws with Crude and Gasoline drawing down but considerably less than API reported (and Distillates barely drawing down at all).
Bloomberg Intelligence energy analyst Fernando Valle:
Strong demand continues to spur inventory drains.Crude-oil stocks remain elevated, but refined-product inventories are looking increasingly tight.
Wide WTI discounts to Brent are likely to push inventories down in coming weeks, driven by exports and increased refinery utilization.
Crack spreads are likely to stay elevated, in particular for gasoline, as demand continues to buck the seasonal trend.
API
Crude -5.087mm (-1.3mm exp)
Cushing -263k
Gasoline -7.697mm (-1.55mm exp)
Distillates -3.106mm
DOE
Crude -2.44mm (-1.3mm exp)
Cushing +90k
Gasoline -4.02mm (-1.55mm exp)
Distillates -320k (-2.5mm exp)
Following API’s major draws, DOE was a big disappointment with smaller draws in crude, gasoline, and distillates than API reported and a build at Cushing…
Bloomberg Intelligence energy analysts Fernando Valle and Vince Piazza note that it’s the time of year when oil inventories begin to build, and supplies are already almost 17% above the five-year norm. While benchmarks have rallied on heightened geopolitical concerns, sentiment remains unsteady. Oil production is resilient, but exports are offering a key outlet for elevated stockpiles.
Overall crude inventories are at their lowest since May 2015…
Distillates and Gasoline exports jumped last week. US crude, products imports sunk a new record low as total crude/product exports hit a new record high.
US Crude production rebounded the prior week from Gulf storm shut-ins and increased ionce again this week…
WTI/RBOB held gains from last night’s API data into the DOE print, then sank as DOE disappointed…
“If trading behavior in the last few days and weeks gives any indication, prices will rise further on just confirmation of strong inventory draws,” explained Commerzbank analyst Carsten Fritsch, adding “we are close to the 2017 high from January and if that is broken then we are at more than 2-year highs. This will give further incentive for U.S. oil producers to increase output so I think we are setting the base for lower prices for next year.”
8. EMERGING MARKET
Venezuela’s annual rate of inflation is a cool 2875%
(courtesy Steve Hanke)
Venezuela’s Grim Reaper: A Current Inflation Measurement – Current Annual Rate 2875%
Steve H. Hanke's picture
by Steve H. Hanke
Oct 31, 2017 6:06 PM
Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.
The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world’s worst inflation.
As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data reported by the BCV is almost two years old. To remedy this problem, the Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, began to measure Venezuela’s inflation in 2013.
The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.
I compute the implied annual inflation rate on a daily basis by using PPP to translate changes in the VEF/USD exchange rate into an annual inflation rate. The chart below shows the course of that annual rate, which last peaked at 3473% (yr/yr) in late October 2017. At present, Venezuela’s annual inflation rate is 2875%, the highest in the world (see the chart below).
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Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am
Euro/USA 1.1639 DOWN .0012/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE GREEN
USA/JAPAN YEN 113.99 UP 0.337(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 1.3304 UP .0014 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2877 DOWN .0014(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS WEDNESDAY morning in Europe, the Euro FELL by 12 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1639; / Last night the Shanghai composite CLOSED UP 2.57 POINTS OR .08% / Hang Sang CLOSED UP 348.52 PTS OR 1.23% /AUSTRALIA CLOSED UP 0.49% / EUROPEAN BOURSES OPENED IN THE GREEN
The NIKKEI: this WEDNESDAY morning CLOSED UP 408.47 POINTS OR 1.86%
Trading from Europe and Asia:
1. Europe stocks OPENED IN THE GREEN
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 248.52 POINTS OR 1.23% / SHANGHAI CLOSED UP 2.57 POINTS OR .08% /Australia BOURSE CLOSED UP 0.49% /Nikkei (Japan)CLOSED UP 408.47 POINTS OR 1.86% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1278.70
silver:$16.98
Early WEDNESDAY morning USA 10 year bond yield: 2.390% !!! UP 2 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.889 UP 2 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)
USA dollar index early WEDNESDAY morning: 94.63 UP 8 CENT(S) from YESTERDAY’s close.
This ends early morning numbers WEDNESDAY MORNING
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And now your closing WEDNESDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.105% UP 3 in basis point(s) yield from TUESDAY
JAPANESE BOND YIELD: +.061% DOWN 1 in basis point yield from TUESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.475% UP 2 IN basis point yield from TUESDAY
ITALIAN 10 YR BOND YIELD: 1.804 DOWN 2 POINTS in basis point yield from TUESDAY
the Italian 10 yr bond yield is trading 32 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.373% UP 1 IN BASIS POINTS ON THE DAY
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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY
Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1627 DOWN ,0025 (Euro DOWN 25 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.92 UP 0.268(Yen DOWN 27 basis points/
Great Britain/USA 1.3265 DOWN 0.0024( POUND DOWN 24 BASIS POINTS)
USA/Canada 1.2873 DOWN.0018 Canadian dollar UP 18 Basis points AS OIL FELL TO $54.39
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This afternoon, the Euro was DOWN 25 to trade at 1.1627
The Yen FELL to 113.92 for a LOSS of 27 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND FELL BY 24 basis points, trading at 1.3265/
The Canadian dollar ROSE by 18 basis points to 1.2873 WITH WTI OIL FALLING TO : $54.39
The USA/Yuan closed AT 6.6020
the 10 yr Japanese bond yield closed at +.061% DOWN 1 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from TUESDAY at 2.360% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.836 DOWN 4 in basis points on the day /
Your closing USA dollar index, 94.74 UP 18 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY: 1:00 PM EST
London: CLOSED DOWN 5.12 POINTS OR 0.07%
German Dax :CLOSED UP 235.94 POINTS OR 1.78%
Paris Cac CLOSED UP 11.00 POINTS OR 0.20%
Spain IBEX CLOSED DOWN 16.80 POINTS OR 0.16%
Italian MIB: CLOSED UP 198.30 POINTS OR 0.87%
The Dow closed up 57.77 POINTS OR .12%
NASDAQ WAS closed DOWN 11.13 PTS OR 0.17% 4.00 PM EST
WTI Oil price; 54.39 1:00 pm;
Brent Oil: 60.60 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 58.19 DOWN 15/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.373% FOR THE 10 YR BOND 1.00 PM EST EST
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This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Well that's The Scoop
Thank You and Have a Wonderful Day
https://www.silverdoctors.com/tag/harvey-organ/
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