Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1220.10 up $1.10 (comex closing time)
Silver: $16.78 up 3 cents (comex closing time)
In the access market 5:15 pm
Gold $1221.50
silver $16.86
Gold/silver trading: see kitco charts on right side of the commentary.
Today good news came that there is a ceasefire in Eastern Ukraine and also it seems that Germany has blinked with respect to Greece. However late in the day, the Eurocrats threw cold water that they are close to a deal. This deal still has a long way to go and we will know for sure on Monday.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 1 notice served for 100 oz. Silver comex registered 3 notices for 15,000 oz .
Three months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 256.01 tonnes for a loss of 47 tonnes over that period.
In silver, the open interest rose again by 1188 contracts despite Tuesday’s silver price being down by 11 cents. The total silver OI continues to remain relatively high with today’s reading at 169,334 contracts. The bankers are not happy campers tonight with respect to the high OI in silver.
We had 3 notices filed for 15,000 oz
In gold we had another surprisingly fall in OI as gold was down $12.60 yesterday. The total comex gold OI rests tonight at 389,685 for a loss of 3,547 contracts. Today we had 1 notices served upon for 100 oz. We are also coming pretty close to rock bottom OI gold support being around 359,000.
Today, we had a withdrawal of 1.8 tonnes of gold inventory at the GLD/Inventory at 771.51 tonnes
In silver, /SLV no change in of silver inventory to the SLV/Inventory 320.327
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today
.
First: GOFO rates: the crooks are no longer reporting.
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell by another 3,547 contracts today from 393,232 down to 389,685 as gold was down by $12.60 yesterday (at the comex close). We are now in the big delivery month of the active February contract and here the OI fell by 2 contracts from 658 down to 656. We had 0 contracts served upon yesterday. Thus we lost 2 contracts or an additional 200 oz will not stand for delivery for the February contract. The next contract month of March saw it’s OI rise by 3 contracts up to 1269. The next big active delivery month is April and here the OI fell by 3,408 contracts down to 264,072. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was 71,053. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was awful at 125,445 contracts even with much help from the HFT boys. Today we had 1 notices filed for 100 oz.
And now for the wild silver comex results. Silver OI surprisingly rose by 1188 contracts from 168,146 up to 169,334 despite the fact that silver was down by 11 cents yesterday. The bankers were not able to shake any silver leaves from the silver tree and thus the reason for continuous raids by the bankers. I guess the CME needs to resort to another silver margin hike as this would be the only way to shake some longs to depart. We are now in the non active contract month of February and here the OI rose by 3 contracts rising to 23. We had 0 notices filed yesterday so we gained 3 silver contracts or an additional 15,000 oz of silver will stand for delivery in this February contract month. The next big active contract month is March and here the OI fell by only 2,944 contracts down to 78,750. First day notice for the gold and silver February contract months is on Friday, Feb 27.2015 or two weeks away. The estimated volume today was awful at 21,526 contracts (just comex sales during regular business hours). The confirmed volume yesterday was excellent (regular plus access market) at 55,366 contracts. We had 3 notices filed for 15,000 oz today.
February initial standings
Feb 12.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil oz
Withdrawals from Customer Inventory in oz
nil
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
40,126.87 oz (HSBC)
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
655 contracts (65,500 oz)
Total monthly oz gold served (contracts) so far this month
550 contracts(55,000 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
148,004.0 oz
Today, we had 0 dealer transactions
we had 0 dealer withdrawals:
total dealer withdrawal: nil oz
we had 0 dealer deposit:
total dealer deposit: nil oz
we had 0 customer withdrawals
total customer withdrawal: nil oz
we had 1 customer deposits:
i) Into HSBC: 40,126.87 oz (and this arrived from a withdrawal at Scotia customer yesterday)
total customer deposits; 40,126.87 oz
We had 1 adjustment
i) from the HSBC vaults: 96.45 oz (3 kilobars) leave the customer account and this landed into the dealer account of HSBC
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contract of which 0 notices were stopped (received) by JPMorgan dealer and 1 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the December contract month, we take the total number of notices filed for the month (550) x 100 oz or 55,000 oz , to which we add the difference between the OI for the front month of February (656 contracts) minus the number of notices served today x 100 oz (1 contracts) x 100 oz = 120,500 oz, the amount of gold oz standing for the February contract month.( 3.748 tonnes)
Thus the initial standings:
550 (notices filed for the month x( 100 oz) or 55,000 oz + { 656 (OI for the front month of Feb)- 1 (number of notices served upon today) x 100 oz per contract} = 120,500 oz total number of ounces standing for the February contract month. (3.748 tonnes)
we lost 2 contracts or 200 oz will not stand in this February contract month.
Total dealer inventory: 804,950.959 oz or 25.03 tonnes
Total gold inventory (dealer and customer) = 8.231 million oz. (256.01) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 47 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
February silver: initial standings
feb 12 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
643,602.37 oz (Brinks, HSBC,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
3 contracts (15,000 oz)
No of oz to be served (notices)
20 contracts (100,000 oz)
Total monthly oz silver served (contracts)
384 contracts (1,920,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
3,258,058.4 oz
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer deposits:
total customer deposit: nil oz
We had 3 customer withdrawals:
i) Out of Brinks: 3086.900 oz
ii) Out of HSBC: 600,026.09 oz
iii) Out of Scotia: 40,489.38 oz
total customer withdrawal: 643,602.37 oz
we had 0 adjustments
Total dealer inventory: 67.864 million oz
Total of all silver inventory (dealer and customer) 175.564 million oz
.
The total number of notices filed today is represented by 3 contracts for 15,000 oz. To calculate the number of silver ounces that will stand for delivery in February, we take the total number of notices filed for the month (384) x 5,000 oz = 1,920,000 oz to which we add the difference between the OI for the front month of February (23)- the number of notices served upon today (3) x 5,000 oz per contract = 2,020,000 oz, the number of silver oz standing for the February contract month
Initial standings for silver for the February contract month:
384 contracts x 5000 oz= 1,920,000 oz + (23) OI for the front month – (3) number of notices served upon x 5000 oz per contract = 2,020,000 oz, the number of silver ounces standing.
we gained 3 contracts or an additional 15,000 oz will stand in this month of February.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com or http://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Feb 12: we had a withdrawal of 1.8 tonnes of gold from the GLD/Inventory 771.51 tonnes
Feb 11.no change in gold inventory at the GLD/Inventory 773.31 tonnes
Feb 10 no change in gold inventory at the GLD/inventory 773.31 tonnes
Feb 9 no change in gold inventory at the GLD/Inventory 773.31 tonnes
feb 6/ no change in gold inventory tonight/inventory 773.31 tonnes
feb 5. we had another addition of 5.38 tonnes of gold to the GLD/Inventory tonight at 773.31 tonnes
Feb 4/2015; we had another addition of 2.99 tonnes added to the GLD inventory/Inventory tonight 767.93
Feb 3.2015: today a withdrawal of 1.79 tonnes of gold inventory removed from the GLD/Inventory at 764.94
feb 2/ a huge addition of 8.36 tonnes of “paper” gold inventory/Inventory tonight at 766.73 tonnes
jan 30. we had no change in gold inventory/Inventory at 758/37 tonnes
Jan 29/we had an addition of 5.67 tonnes of gold inventory at the GLD/Inventory at 758.37 tonnes
Jan 28/no changes in gold inventory at the GLD/Inventory at 952.44 tonnes
Jan 27.we had a monstrous “paper” addition of 9.26 tonnes of gold into the GLD tonight/Inventory at 952.44 tonnes
Feb 12/2015 /we had a withdrawal of 1.8 tonnes of gold inventory at the GLD/
inventory: 771.51 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 771.51 tonnes.
end
And now for silver (SLV):
Feb 12 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 11 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 10 no change in silver inventory at the SLV/inventory at 320.327 million oz
Feb 9 no change in silver inventory/SLV inventory at 320.327 million oz
Feb 6 no change in silver inventory/SLV’s silver inventory at 320.327 million oz.
Feb 5.we had no change in silver inventory/320.327 million oz/
Feb 4/we had a small withdrawal of 136,000 oz of silver from the SLV vaults/Inventory/320.327 million oz
feb 3.2015: we had a good addition of 1.149 million oz of silver inventory/inventory 320.463 million oz
Feb 2 no change in silver inventory at the SLV/inventory at 319.314
million oz.
jan 30 no change in silver inventory at the SLV/inventory at 319.314
million oz
Jan 29/no change in silver inventory/SLV inventory at 319.314 million oz
Jan 28/no changes in silver inventory/SLV inventory at 319.314 million oz
Jan 27/no change in silver inventory/SLV inventory at 319.314 million oz
feb 12/2015 we had no change in silver inventory/
SLV inventory registers: 320.327 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 6.1% percent to NAV in usa funds and Negative 5.7 % to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.2%
Percentage of fund in silver:38.4%
cash .4%
( feb12/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to + 3.06%!!!!! NAV (Feb 12/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to +.06% to NAV(feb 12 /2015)
Note: Sprott silver trust back into positive territory at +3.06%.
Sprott physical gold trust is back into positive territory at +.06%
Central fund of Canada’s is still in jail.
end
And now for your most important physical stories on gold and silver today:
Early gold trading from Europe early Thursday morning:
(courtesy Mark O’Byrne)
Stalemate At Minsk Summit And Eurogroup Meeting Suggests Tensions In Europe And Globally Are Set To Escalate
By GoldCore Research February 12, 2015 0 Comments
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- Diplomats best hopes for Minsk is for freeze in hostilities
- Russia engages the U.S. in war of words as tensions mount
- Greece and EU buy time – no agreement thus far
- Anti-austerity parties in Spain and Greece may bring down the euro
The Minsk Summit which was called at the urgent behest of Angela Merkel and Francois Hollande seems not to have yielded any tangible outcome despite the high stakes on all sides.
Media reports present little new information regarding the talks which ran through the night. The Guardian reports that President Putin confirmed a ceasefire agreement has been reached which would come into effect on Sunday.
Ukraine’s Poroshenko denied an agreement had reached, insisting that some of Russia’s demands were “unacceptable”.
While a ceasefire, if it does transpire, will bring much relief to the people of East Ukraine it is unlikely to last without a real political solution. The Pro-Russian rebels do not trust Poroshenko.
The Donetsk and Luhansk regions – which are inhabited predominantly by ethnic Russians – voted to secede from Ukraine following the overthrow of former, pro-Russian, Prime Minister Yanukovich last year.
As such, the rebels do not recognize Poroshenko as the leader of Ukraine and reject a return to the Ukrainian state in it’s current form. They are apparently willing to return as part of a federalized Ukraine which would limit the power of both Kiev and Moscow which seems reasonable.
However, for the moment, the most that can be hoped for is a “freezing” of hostilities according to the BBC.
But while Germany and France seek to calm the situation in Ukraine to avert it escalating into a proxy war on an already unstable Europe’s border, Russia and the U.S. seem intent on provoking each other. While Obama, on Tuesday evening, warned Putin that he must reverse course and cease arming the rebels, the head Russia’s Security Council made a counter-warning.
Bloomberg reported Nicolai Patrushev, one of Putin’s closest advisors as saying, “the current U.S. approach will lead to inevitable confrontation with Russia and China.”
The European de-facto leadership clearly view the resolution of the Ukraine crisis as of the utmost urgency. At the same time the U.S. are taking a very hawkish stance. If the U.S. where to begin arming Ukraine’s government it would lead to great tension with Europe.
At the same time Europe is at risk of imploding. Yesterday’s talks among finance ministers yielded nothing and the EU appears to be buying time saying they need to be continued on Monday. Greece appear to have succeeded in calling Europe’s bluff, at least for now, given that Wednesday had been announced as the dead-line for Greece to comply.
It would appear Europe fears a Greek exit from the euro more than they had suggested. In Today’s Telegraph, Ambrose Evans Pritchard has an interesting piece blaming the Northern European elites for the rise of left wing groups in Southern Europe.
In Spain the left-wing Podemos party are polling at 28%. The ruling conservative party only have the support of 21% of the population.
“Europe’s policy elites can rail angrily at the folly of these plans if they wish, but they must answer why ex-Trotskyists threatening to dismantle market capitalism are taking a major EMU state by storm. It is what happens when 5.46m people lack jobs, when 2m households still have no earned income, and when youth unemployment is still running at 51.4pc, and home prices are down 42pc, six years into a depression.”
In Italy he identifies a similar pattern,
“The revolt in Italy has different contours but is just as dangerous for Brussels. Italians may not wish to leave the euro but political consent for the project but broken down. All three opposition parties are now anti-euro in one way or another. Beppe Grillo’s Five Star movement – with 108 seats in parliament – is openly calling for a return to the lira.”
These are serious developments for the EU and whatever the result of Syriza’s brinkmanship the anti-austerity groups are likely to be bolstered by the defiance of the Greeks. What loyalty can the 51% of unemployed youth have to the European project?
More frighteningly for Europe, what reason have these European groups not to pivot toward Russia and the East. But Europe cannot afford to write down the debts of these countries so it is in a catch-22 situation.
Irish Finance Minister, Michael Noonan, is not willing – at this strategically expedient time – to put pressure on the EU to make similar concessions to Ireland should Greece achieve a write-down in it’s debt or some other favorable outcome.
The same cannot be said for Spain and Italy whose incumbent governments are facing massive pressure from their anti-austerity opponents domestically.
In the absence of a strong and united anti-austerity movement in Ireland it is likely that the government will continue with some slight justification to support the status quo despite crises in homelessness, health care and repossession of family homes.
Europe seems to be in disarray. A currency crisis may be imminent. Owners of physical gold will find it a safe harbour in the coming months and years.
For an in depth look at currency wars read: Currency Wars: Bye, Bye Petrodollar – Buy, Buy Gold
MARKET UPDATE
Today’s AM fix was USD 1,225.25, EUR 1,080.75 and GBP 803.13 per ounce.
Yesterday’s AM fix was USD 1,235.50, EUR 1,092.40 and GBP 807.73 per ounce.
Gold fell 1.16 percent or $14.30 and closed at $1,219.70 an ounce yesterday, while silver slipped 0.71 percent or $0.12 closing at $16.79 an ounce.
Gold inched up after its 1 percent loss overnight, after hitting a five week low in Asia. Demand for the yellow metal has been driven by safe haven bids from the eurozone ‘Grexit’ scenario and also from Chinese buying the dip ahead of Lunar New Year.
Near the end of day trading in Singapore spot gold was trading at $1,222.30 an ounce.
Yesterday, the U.S. dollar hit a three week high versus other major currencies. Eurozone finance ministers were not able to reach an agreement on Greece’s bail-out and austerity terms.
The next U.S. Federal Reserve meeting is scheduled for March 17-18, but until then the horizon for U.S. interest rate hikes looks likely for June. A rise in the interest rate could strengthen the U.S. dollar further and dampen the appeal for the yellow metal. Whether the hike is already being priced into the gold price or not, time will tell.
Gold in London fell to its lowest since January 9th at $1,216.45 an ounce, before recovering to trade up 0.4 percent at $1,223.78. Silver rose 1 percent to $16.92 an ounce. Platinum gained 1.1 percent at $1,203.85 an ounce, while palladium was up 0.9 percent at $772.75 an ounce.
The World Gold Council data released today noted that gold demand hit a five-year low last year as buying of jewellery, coins and bars failed to keep pace with 2013’s elevated levels, particularly in major consumer China.
The Bank of Japan deflated hopes of further monetary easing which gave gold a boost early in trading to hit $1,233.10. The Bank of England lowered its 2015 inflation rate target to 0.5 percent from 1.4 percent after what it sees as a temporary slump. While Sweden’s Central Bank, the Riksbank, slashed interest rates by 10 basis points in efforts to stop the nordic country’s spiralling deflation problem.
end
For your interest…
(courtesy Bloomberg/GATA)
India smugglers, and their bodies, take a break from gold
Submitted by cpowell on Thu, 2015-02-12 06:12. Section: Daily Dispatches
By Swansy Afonso
Bloomberg News
Wednesday, February 11, 2015
MUMBAI, India — In the two years since India took steps to pare gold imports, people used all sorts of tricks as the smuggling business boomed — from simply tucking the metal under a turban to jamming it up their rectums.
That illegal trade, though, is fading now.
Premiums have evaporated for black-market bullion valued at about $8 billion last year, industry data show. That’s because the government has begun easing import curbs that in 2013 knocked India from the top spot among gold buyers. In a country that accounts for a quarter of world demand, legal transactions are recovering, with annual purchases from overseas poised to jump 50 percent. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2015-02-11/india-smugglers-and-th…
end
You are already aware of this, but it is worth repeating:
(courtesy Bloomberg news/GATA)
Central banks are boosting their gold reserves
Submitted by cpowell on Thu, 2015-02-12 05:46. Section: Daily Dispatches
“The government doesn’t care about gold. … They don’t care about its price.” — Doug Casey, February 11, 2015.
* * *
By Eddie Van Der Walt and Nicholas Larkin
Bloomberg News
Thursday, February 12, 2015
LONDON — Central banks purchased enough gold in 2014 to buy 75 Boeing Co. Dreamliners.
Governments added 477.2 metric tons to their reserves, the second-biggest increase in 50 years and 17 percent more than a year earlier, the World Gold Council said in a report today. Based on the average price of gold in 2014, central banks probably paid about $19.4 billion. A Boeing 787-9 has a $257.1 million retail price, according to the company’s website.
Central banks have added to gold reserves for the past five years, a reversal from two decades of selling since the late 1980s. Purchases will be at least 400 tons this year, according to estimates from the London-based council, which represents 17 gold producers. Total demand for gold fell last year as Chinese consumers bought less jewelry, bars, and coins. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2015-02-12/central-banks-hungry-f…
end
A great piece from Bill Holter
(courtesy Bill Holter/Miles Franklin)
PEACE! …and Greece
It’s PEACE! Russia and Ukraine have reached another cease fire agreement (maybe their 5th?) which will begin Sunday. Let’s see if this one holds? Ukraine cannot continue hostilities without the U.S. supplying them. What will U.S. reaction to this agreement be? The U.S. was specifically not invited to these talks, when has that ever happened before? The big question in my mind is, do we continue to arm them? And if we do, what will this look like to the rest of the world? To Europe? I view this agreement as one more well thought out move by Russia, how can they be called the “bad guy” after this deal? We will either have peace …or the U.S. will be seen in a very poor light by Europe and it may spur more rapid movement Eastward, we will see! Is this for real or merely more propaganda? My guess is yes, it is for real, whether it stays for real without U.S. meddling is another question.
“Propaganda” has been standard “financial” operating procedure for years. What I am alluding to is a major league push to downplay Greece (and of course Ukraine) and the insolvency ramifications. First thing Monday morning, while we continued to get the game of “deal or no deal”, we were also being barraged with “Greece is not such a big deal”. Greece IS a big deal and very well may be THE deal which exposes the insolvency of the entire system.
As mentioned before, Greece in total may be $3 – $5trillion total exposure, or more. This is a very large sum, just think back to 2008 where if Congress did not approve the “measly” (huge at the time!) sum of $700 billion for TARP, we were told we would be thrown into the dark ages and martial law. Already, Spanish and Italian yield spreads and CDS have begun to widen. This is front running to the contagion that will take place and spread from market to market. While Greece itself in a normal world without CDS and other levered derivatives really would not be such a big deal…it is now, because there is zero margin (pun) left for error.
When, not if Greece defaults, triggers everywhere will be pulled. Please do not tell me “but their debt can be extended 60-70 years into the future” because this in and of itself is a default. Greek bonds will need to be marked to market at only a few cents on the euro. Even assuming a markdown of “only” 50% will destroy the balance sheets of banks, central banks and the ECB itself. Losses will actually have to be “booked” and capital ratios will be destroyed. In normal times these capital shortfalls could be plugged with either debt or equity raises, these are not options now and surely won’t be in crashing and illiquid markets. To illustrate just how precarious the situation is (and not even in “crisis” yet), central banks across the globe are ALREADY monetizing more than 100% of debt issuance. Yes, this “is” currently working, has outright monetization ever worked before? And now on nearly a global scale? Monetization will work until one day it does no longer, what will markets look like then? What will have value?
We are already seeing the contagion to Spain and Italy, both in the same fiscal and monetary vice Greece is in. Unemployment, as in Greece is rampant in Spain and Italy while both have debt ratios in banana republic zones. I mention this because of the contagion factor. Once Greece either quits, declines to pay or is kicked out of the Eurozone, …or agrees to an unlikely restructuring, the euro itself will collapse (again) in purchasing power. The Swiss may have kicked off the devaluation, it very well may be the Greeks who finish it off. This very well may end in a north and south euro or with a Eurozone with several southern entities not included. A much stronger euro may be the ultimate result should excess and bankrupt baggage be shed. Please understand that the ECB itself holds Greek debt, at par, which supports the value of the euro. Isn’t this is like two drunks trying to hold each other from falling down?
Just as with the Swiss reset, trade all throughout Europe will be thrown into disarray with huge overnight losses taken and business models rendered obsolete. I believe some very big and long term business decisions will need to be undertaken. Greece, Spain and Italy, as well as the rest of Europe will need to decide “who” they will trade with going forward. This is where Russia enters the picture and why European alliances with Russia/China are so important. After a collapse of the euro and during the thought process of “where to now?”, European industrialist will have a decision to make. Do they continue to trade with the U.S., accepting dollars for trade …or do they turn their attention East and probably toward a gold ratio’d currency? In my opinion there will be a very large deciding factor. Will Europe choose to do business with a region who’s hey-day is behind them and who’s consumers are leveraged to the gills …or, will they prefer to do business with a region who’s future is bright and has well over 1 billion potential consumers who are not in debt and still saving for their first big screen TV? Do you see? Do you see how “natural” any pivot of Europe toward the Russia/China alliance is?
This thought process is of utmost importance to you as an individual because the answer to the above question(s) will affect you directly. Will the status quo hold? Will it snap? If it snaps, which way will the world “lean”? The last two+ years have been designed (choreographed) to show you the new world will lean West, toward the dollar and away from gold. It is so important at this junction to ignore the trees and see the forest for exactly what it is. We are on the cusp of a New World Order, only not the NWO the neocons had envisioned. The vast majority of the world, 135 nations or more are already preparing for a turn from the dollar’s hegemony, away from false and lopsided trade, away from ugly financial and diplomatic deals …and toward real and fair weights, measures and business dealings.
Today’s juncture of time is very close to the equivalent of 1944 where nations met in Bretton Woods, New Hampshire to decide on a new monetary, financial and trade arrangement. A new “arrangement” is undoubtedly coming. By agreement, by default (pun intended), peacefully or forcefully. Gold by default, will be a very central pillar of whatever new system arises, the rest of the world’s actions are plainly telling you this. Know this and you have already won more than half the battle! …The rest of the battle may not be quite as easy. Regards, Bill Holter
end
And now for the important paper stories for today:
Early Thursday morning trading from Europe/Asia
1. Stocks mainly higher on major Asian bourses / the yen falls to 119.76
1b Chinese yuan vs USA dollar/ yuan slightly weakens to 6.2454
2 Nikkei up 327.04 or 1.88%
3. Europe stocks all the green // USA dollar index down to 94.63/
3b Japan 10 year yield huge rise to .40%/ (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.81/everybody watching the huge support levels of 117.20 and that level acting as a catapult for the markets.
3c Nikkei now above 17,000/
3e The USA/Yen rate still below the 120 barrier this morning/
3fOil: WTI 50.36 Brent: 56.07 /all eyes are focusing on oil prices. This should cause major defaults as derivatives blow up.
3g/ Gold up /yen down;
3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion
Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP
3i 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 (see Von Greyerz)
3j Oil rises this morning for WTI and Brent
3k Sweden enters NIRP/lowers it’s interest rate by 10 basis points to -.10% (see below)
3l Greek 10 year bond yield :10.53% (down 7 basis points in yield)
3m Gold at $1223.00. dollars/ Silver: $16.85
3n USA vs Russian rouble: ( Russian rouble down 1 per dollar in value) 66.12!!!!!!
3 0 oil into the 50 dollar handle for WTI and 56 handle for Brent
3p ECB removes Greek sovereign collateral in their investment strategy (on Feb 11). This leaves only ELA funding for the next two weeks. Maximum allowed 60 billion euros for this funding. They also limit the amount of treasuries that Greek can issue. Greece rejects any more EU funds and thus rejects the European ultimatum to accept this funding!!
Meeting yesterday failed to decide Greece’s fate
3Q SNB (Swiss National Bank) still intervening again driving down the SF/window dressing/Swiss rumours of intervention to keep the soft peg at 1.05 Swiss Francs/euro and major support for the Euro.
3r the world still awaits the Greek decision today.
3s Merkel and Hollande in Belarus arranged to obtain a ceasefire in Eastern Ukraine/talks with Putin
4. USA 10 yr treasury bond at 2.04% early this morning. Thirty year rate well below 3% (2.62%!!!!)/yield curve flattens/foreshadowing recession
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid
(courtesy zero hedge)/your early morning trading from Asia and Europe)
Market Wrap: Whirlwind Manic-Depressive Session Sees Futures Slide Then Surge
So far it has been an overnight session which clearly forgot to take its Lexapro, with futures first tumbling after CNBC’s “leak” that a Greek deal had been reached was refuted, only to surge subsequently on both the Riskbank’s foray into NIRP and QE which crushed the Swedish currency and sent its stocks to recorder highs, and more importantly, on the latest ceasefire out of Minsk which has pushed Russian and European assets substantially higher. While only the most naive believe that any palpable end to Ukraine hostilities will emerge as a result of today’s delay, expect for Greek headlines to return with a vengeance as today it is Tsipras’ turn to speak at a summit of the 28 European Union leaders set to begin momentarily.
For now, however, the algos have been delighted to forget the latest Greek disappointment and focus on the utopia that central planners have in mind, if only for the 1%, and send US equity futures surging, and on pace to resume their grind higher to all time highs.
Looking at specific regions, Asian equity markets trade mixed after following suit from a lacklustre Wall Street close, which saw the S&P 500 finish relatively flat. The Nikkei 225 (+1.8%) outperformed bolstered by yesterday’s sharp fall in JPY which prompted the index to briefly break above the 18,000 level for the first time this year. Elsewhere, both the Hang Seng (+0.44%) and Shanghai Comp (-0.50%) fluctuated between gains and losses, with a rally in the telecoms sector helping overcome weakness across energy stocks, amid yesterday’s oil price slump.
The Eurogroup meeting on Greece failed to come to a meaningful conclusion last night and whilst this was expected amid ongoing tensions, the lack of cooperation between the two parties saw equity futures open lower this morning. However this trend reversed at the open of the cash markets, with stock specific news, such as positive earnings from the likes of Renault (+9.4%) and Credit Suisse (+9.6%), pushing European indices higher.
Sentiment was further bolstered through the morning after a technical break in the DAX future, where a spike took out stops out through the high before the EUREX close yesterday (10800) and the high on Tuesday’s session (10816). The move higher also prompted rumours of a deal being brokered between Greece and the Eurogroup, however these reports were not based on any information of substance. Another contributing factor has been Russia’s President Putin stated that a cease-fire has been agreed with Ukraine and is to start on Sunday (15th Feb).
Elsewhere, Gilts (-60 ticks) are underperforming in fixed income markets on the back of the BoE Quarterly Inflation Report, while T-Notes and Bunds are also lower, partially due to equity strength, with US traders await the final Treasury auction of the week in the form of USD 16bln in a 30yr note.
In FX, markets have seen abnormal volatility today, with the key event being the BoE’s Quarterly Inflation Report in which the MPC members revised down their short term CPI forecasts as a consequence of the fall in oil prices however stated that they expect inflation to rise back above the 2% target in the 2 year horizon. Other factors of the report that were perceived to be hawkish were that both growth and wages are set to increase and spare capacity will be eliminated within 18 months, compared to a forecast of 2-3 years at the last report. This saw GBP/USD climb above 1.5300 to mark the pairs highest level of the week while the EUR/GBP cross trades at 7 year lows.
Elsewhere, SEK weakened aggressively on the back of an unexpected 10bps rate cut from the Riksbank to -0.10%, after 12 of the 18 surveyed predicted that rates would be held. The announcement also saw the central bank state that they are to buy SEK 10bln of government bonds further exacerbating the weakness in the currency. Meanwhile, JPY strengthened this morning after comments from sources claiming that the BoJ thinks any additional stimulus will be ‘counter-productive’, which saw USD/JPY fall by over 60 pips in an initial fast money move to break back below the 120.00 level.
Finally, looking at commodities, oil prices have been strengthening during this morning’s session, aided by the weakening USD (-0.3%) to rebound from the lows yesterday, which saw WTI crude futures fall below the USD 50.00 handle after DoE inventories showed a larger build than expected (4868K vs. Exp. 3750K, Prev. 6333K).
Elsewhere, the metals complex sees gold experiencing a mild gain amid continued Greece concerns with prices remaining near 5 week lows after USD strength pressured the precious metal yesterday. Elsewhere, silver prices were notably lower amid technical selling with spot prices breaking below both the 50 DMA (USD 16.76/oz) and 100 DMA (USD 16.72/oz). JP Morgan sees gold falling by year end because of stronger USD, low inflation and low commodity prices however it may see some support on geo-political risks and seasonal demand. JPM think palladium and platinum looks cheap and palladium could be the best performer this year.
On today’s calendar, we get the retail sales print for January with the market expecting more energy related weakness at the headline. Jobless claims data is also due up and it’ll be interesting to see if the four-week average stays below 300k. Finally business inventories rounds off today’s releases.
Bulletin Headline Summary
Russia-Ukraine ceasefire helps boost sentiment around Europe after Greek stalemate overnight
GBP spikes higher as the BoE’s Quarterly Inflation Report had a hawkish tone with growth and wages set to rise and slack in the economy to be eliminated faster than previously forecasted
Looking ahead, out of the US today we have Advanced Retail Sales, weekly jobless data and a host of earnings, including AIG
Treasuries fall, 30Y yields rise for sixth day before before quarterly refunding concludes with $16b long bonds; WI bid yield 2.63%, second lowest on record, vs record- low 2.43% award in January.
USTs in mid-January began a seasonally bearish period lasting into the May refunding; 10Y yields breaking above 2% could target 2.08%, then 2.19% near term, ED&F Man head of rates and credit Tom di Galoma writes in note
The leaders of Russia, Ukraine, Germany and France agreed on a cease-fire to stem the conflict that’s devastated eastern Ukraine and triggered the worst crisis in more than 20 years between Russia and its former Cold War foes
EU leaders will take up the baton on Greece when they gather in Brussels today after finance ministers postponed decisions on country’s future financing until next week
Greek lenders have almost exhausted Emergency Liquidity Assistance they received from the European Central Bank via the Bank of Greece, Skai Television reports in its evening news bulletin, without saying how it got the information
Sweden’s central bank cut its main rate below zero and unveiled additional measures designed to jolt the largest Nordic economy out of a deflationary spiral
Bank of England Governor Mark Carney signaled rates may increase faster than investors had anticipated as Britain’s economy gathers pace
Bank of Japan policy makers view further monetary easing to shore up inflation as a counterproductive step for now, amid concern it could trigger declines in the yen that damage confidence, people familiar with the talks said
The number of energy jobs cut globally have climbed well above 100,000 as once-bustling oil hubs in Scotland, Australia and Brazil, among other countries, empty out, according to Swift Worldwide Resources, a staffing firm
Kaisa Group Holdings bonds slid after co. said lenders and bondholders “should not expect payments of principal and interest according to existing terms”
Sovereign yields mostly lower; Greece 10Y falls ~23bps. Asian, European stocks gain, U.S. equity-index futures higher. Brent and WTI higher, gold and copper gain
Hoping to make some more sense of the overnight depressive euphoria is DB’s Jim Reid with his overnight recap
There may also be some sleepless nights ahead for European leaders after a stalemate yesterday after a late session and hours of talks at the Eurogroup meeting. The result largely lived up to our expectations with both Greece and Eurozone finance ministers failing to agree on an outcome. Instead, talks now move onto Monday’s Eurogroup meeting. The lack of any material outcome was summed up in a very short press conference shortly after in which both Greece and the Euro officials failed to agree on a joint statement – the Greek side rejecting language that might be seen as agreeing to an extension of the current programme. Head of the Eurogroup finance ministers Dijesslbloem said in the press conference after that ‘we covered a lot of ground but didn’t actually reach a joint conclusion on how to take the next steps’ and that ‘there has to be political agreement on the way forward’. Varoufakis meanwhile was quoted in the Greek press Ekathimerini shortly after the meeting as saying that ‘we explained why this bailout is not working’ and that ‘we want a new contract with Europe’.
Our resident expert George Saravelos believes that irrespective of today’s outcome, we now have some more visibility over how Monday could potentially play out. On the one hand Europe is offering a technical extension of the existing program and on the hand Greece is looking for maximum flexibility and the least amount of up-front commitments attached to completing the program review. George still believes that an agreement to move forward should be achievable but that successful completion in agreeing on the terms will be a close call given the large distance still clearly between Greece and European officials. Of course, failure to agree on moving forward on Monday or a deadlock will shift focus to next Wednesday’s ELA review by the ECB, where, in the event of failure we could see the ECB become more explicit on timing of potential ELA withdrawal.
The other focus last night was the Ukraine and Russia talks and as we go to print reports are breaking that leaders from France, Germany, Russia and Ukraine are set to sign an agreement according to Reuters. The talks have gone on for most of the night but the early signs appear to be positive and we are expecting a conference imminently. Staying on the Ukraine, we also heard from the IMF’s Lagarde yesterday who was quoted on Bloomberg saying that the IMF is ‘very close’ to a bailout agreement for Ukraine. An official announcement is expected this morning at 9am CET.
With the outcome of the meeting coming after close in the US, markets this morning have rebounded off the early weakness from the Greece news and bourses are trading firmer as we type – reflecting the breaking headlines from the Ukraine talks. The Hang Seng (+0.45%), Shanghai Composite (+0.33%) and Nikkei (+1.53%) are all firmer – the latter in part benefiting from strong machine orders data – whilst bourses in Taiwan and Korea have also rebounded off the day’s lows in recent moments. The Euro is 0.2% weaker versus the Dollar in trading this morning, having initially swung around last night with various headlines.
Before the Eurogroup meeting yesterday, markets were subdued in the US with the S&P 500 eventually closing unchanged on what turned out to be the third lowest volume day this year. The index did in fact trade as low as -0.5% intraday before paring losses into the close. It did cross into positive territory briefly as headlines over Greece began to emerge from the Eurogroup meeting. Energy stocks (-0.66%) declined as oil markets fell for a second consecutive day. WTI (-2.36%) and Brent (-3.14%) fell to $48.84/bbl and $54.66/bbl respectively after the latest IEA report which showed crude supplies rising to record levels once again last week. The earlier hopes of US production cuts do appear to have been put to one side for now.
Treasuries were also quiet up until the Eurogroup headlines started to leak. Although the 10y benchmark yield closed 2bps wider at 2.018%, the yield did at one point touch an intraday low of 1.969% during the meeting. Meanwhile the Dollar ended the day unchanged with the DXY having earlier traded some +0.36% firmer before declining in the last hour of trading. Data-wise it was quiet with just the monthly budget statement for January which saw a smaller than expected deficit at $17.5bn (vs. expectations of a deficit of $19bn). Fedspeak caught the eye once more however. The Dallas Fed’s Fisher was quoted on Bloomberg with regards to raising rates saying that ‘I wanted it to happen in March, and I lost the argument’.
It was a similar subdued picture in Europe earlier in the day. The Stoxx 600 finished the day 0.24% weaker whilst the DAX (-0.02%) finished more or less unchanged. Credit markets also closed generally flat. Greek assets were notably weaker in the lead up to the meeting however with Greek equities closing 4% weaker and 3y yields widening some 130bps. With little in the way of data, the market appeared to be in something of a wait and see mode for Greece. 10y Bund yields finished 1.5bps tighter at 0.353% and Spanish and Italian yields were 2-4bps wider. The Euro meanwhile finished 0.13% firmer at $1.1335 however in reality it bounced around with the end of day headlines. Elsewhere, having highlighted some examples of record low yields in recent reports, Switzerland yesterday sold CHF 10y bonds at a yield of just 0.011% – the lowest of any country on record.
It’s a busier day data wise today as the calendar picks up. The final inflation reading for Germany will likely be the highlight this morning with the market expecting a -0.3% yoy headline print. Industrial production for the Euro-area will also be worth keeping an eye on and we also get the BoE inflation report out of the UK and the Riksbank monetary policy decision. In the US this afternoon we’ve got the retail sales print for January with the market expecting more energy related weakness at the headline. Jobless claims data is also due up and it’ll be interesting to see if the four-week average stays below 300k. Finally business inventories rounds off today’s releases.
end
Last night the Swedish Central bank, the world’s oldest central bank and 4th oldest bank (formed in 1668) decided to lower its interest rate by 10 basis points to -10 %. It is also doing QE as they are buying an additional 10 billion SEK worth of bonds:
(courtesy zero hedge)
Sweden Central Joins The NIRP Club: Lowers Interest Rate To -0.1%, Launches QE
It’s a NIRP world and you are either in it, or are determined to lose the currency wars. And hours ago, the world’s oldest central bank, that of Sweden, announced that it too would join its NIRP peers in an attempt to preserve its currency’s fighting power in the global currency wars which make a mockery of what is going on in Ukraine, by lowering the benchmark interest rate to -0.1%, but also launch QE by buying SEK 10 billion of government bonds, thereby making sure that the stock of available debt in private hands is even lower and that central banks monetize even more than merely “all” of all net issuance in 2015.
From the press release:
There are signs that underlying inflation has bottomed out, but the situation abroad is now more uncertain and this increases the risk that inflation will not rise sufficiently fast. The Executive Board of the Riksbank has therefore decided to cut the repo rate by 0.10 percentage points, to -0.10 per cent, and to adjust the repo-rate path down somewhat. At the same time, the interest rates on the fine-tuning transactions in the Riksbank’s operational framework for the implementation of monetary policy are being restored to the repo rate +/- 0.10 percentage point. Moreover, the Riksbank will buy government bonds for the sum of SEK 10 billion. These measures and the readiness to do more at short notice underline that the Riksbank’ is safeguarding the role of the inflation target as a nominal anchor for price setting and wage formation.
Economic activity in Sweden strengthening but inflation is too low
Although the recovery abroad is slow, growth in Sweden will benefit from the low oil prices, the weaker krona and the very low repo rate. GDP growth is expected to increase at a faster pace in the coming period and the labour market is expected to strengthen.
Inflation is still low, but there are now signs that underlying inflation, for instance, the CPIF excluding energy, has bottomed out and is rising. The krona is weaker than anticipated, which will also contribute to somewhat higher inflation. However, low energy prices are expected to hold down CPIF inflation in the year immediately ahead.
Readiness to do more
The measures the Riksbank is now taking underline that the Riksbank is safeguarding the role of the inflation target as a nominal anchor for price setting and wage formation. To ensure that inflation rises towards the target, the Riksbank is prepared to quickly make monetary policy more expansionary, even between the ordinary monetary policy meetings, should the need arise. This will primarily entail making further repo-rate cuts, postponing the first repo-rate increase and increasing the purchases of government bonds. In addition, there is the possibility of a programme of loans to companies via the banks.
As the WSJ adds, analysts were divided ahead of the rate decision about which way it would go. A small majority expected unchanged rates while others had forecast the repo rate could be cut as low as minus 0.25%. In response to the move, the Swedish krona weakened against the euro, which rose to around 9.65 kronor from 9.50 kronor.
It’s called NIRP for a reason: “Sweden’s two-year bond, which is more responsive to monetary policy changes than longer-dated bonds, traded at a yield of minus 0.23% after the decision compared with minus 0.18% before.”
While it is unclear if NIRP is the missing link that will fix all that ails the deflating Swedish economy, one thing is clear: the Riskbank has just given the all clear to BTFATH:
But no matter just how drastic this latest market intervention by yet an