Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1184.80 down $15.0 (comex closing time)
Silver: $16.66 down 40 cents (comex closing time)
In the access market 5:15 pm
Gold $1186.00
Silver: $16.72
Gold/silver trading: see kitco charts on the right side of the commentary.
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 83 notices for 415,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 248.27 tonnes for a loss of 55 tonnes over that period. Lately the removals have been rising!
In silver, the open interest fell by 826 contracts, due to short covering, as Friday’s silver price was down by 7 cents. The total silver OI continues to remain extremely high with today’s reading at 170,615 contracts. The front month of March is now off the board. The front April month has an OI of 110 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.
We had 83 notices served upon for 415,000 oz.
In gold we again have a total collapse of OI as we enter the next active delivery month of April . The total comex gold OI rests tonight at 392,653 for another loss of 5926 contracts. With June gold almost equal to April gold in price, it just does not make sense why so many would liquidate their positions.Friday was options expiry for London’s LMBA gold and silver whereas tomorrow we have the final options expiry and that is the OTC market. We had 1 notice served upon for 100 oz.
Today, we had no changes in gold inventory at the GLD/ Gold Inventory rests at 737.24 tonnes
In silver, /SLV we had no changes with respect to silver inventory / the SLV/Inventory, at 323.888 million oz
We have a few important stories to bring to your attention today…
1, Today we again had some short covering in the silver comex with the silver OI falling by 826 contracts. Gold OI fell again by 5,926 contracts.
(report Harvey)
2. Greece will likely leave the EU
(Raul Meijer)
3. Andorra looks like the next failed state. The problem here is the fact that it has no central bank as a lender of last resort. Its debt to GDP is a whopping 17 x
(courtesy zero hedge)
4. Why central banks are paralyzed at zero bound interest rates
( Alasdair Macleod)
5. Today it was the Dallas Fed to report lousy numbers and Goldman Sachs lowers its first quarter GDP
(Both zero hedge)
we have these and other stories for you tonight
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 5926 contracts from 398,579 down to 392,653 despite the fact that gold was down by $5.30 yesterday (at the comex close). As I mentioned above, the complete collapse of OI as we enter an active delivery month makes no sense.The fact that we have a middle eastern war, troubles in Ukraine and in Greece and then to have a complete collapse in OI is beyond comprehension. We are off contract month of March. The next delivery is April and here the OI fell by 46,450 contracts down to 20,945. We have 1 day before first day notice for the April gold contract month, on Tuesday, March 31.2015. The next big active delivery contract month is June and here the OI rose by 34,559 up to 251,907. June is the second biggest delivery month on the comex gold calender. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 99,683. (Where on earth are the high frequency boys?). The confirmed volume on Friday ( which includes the volume during regular business hours + access market sales the previous day) was good at 329,748 contracts. Today we had 1 notice filed for 100 oz.
And now for the wild silver comex results. Silver OI fell by 826 contracts from 171,441 down to 170,615 despite the fact that silver was down by only 7 cents, with respect to Friday’s trading . We therefore again had some more short covering by our bankers. We are off the active contract month of March. The next delivery month is April and here the OI dropped 10 contracts from 120 down to 110. The next big active delivery month is May and here the OI dropped by 1993 contracts down to 101,981. The estimated volume today was poor at 17,743 contracts (just comex sales during regular business hours. The confirmed volume on Friday (regular plus access market) came in at 47,730 contracts which is excellent in volume. We had 83 notices filed for 415,000 oz today.
March final standings
March 30.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
160.75 oz (5 kilobars)(MANFRA, Brinks)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
off
Total monthly oz gold served (contracts) so far this month
53 contracts(5300 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
114,790.651 oz
Total accumulative withdrawal of gold from the Customer inventory this month
656,754.2 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil
we had 2 customer withdrawals
i) Out of Manfra: 128.60 oz (4 kilobars)
ii) Out of Brinks: 32.15 oz (1 kilobar)
total customer withdrawal: 160.75 oz (5 kilobars)
we had 0 customer deposits:
total customer deposit: nilo oz
We had 1 adjustment
a removal of 804.93 oz as an accounting error at Delaware.
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 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (53) x 100 oz or 5300 oz , to which we add the difference between the open interest for the front month of March (1) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.
Thus the final standings for gold for the March contract month:
No of notices served so far (53) x 100 oz or ounces + {OI for the front month (1) – the number of notices served upon today (1) x 100 oz} = 5,300 oz or .1620 tonnes
Total dealer inventory: 658,833.604 oz or 20.49 tonnes
Total gold inventory (dealer and customer) = 7,980,935.794 oz. (248.24) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 55.0 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
March silver final standings
March 30 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
3966.90 oz (Delaware)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
605,368.798 oz (HSBC, Brinks)
No of oz served (contracts)
83 contracts (415,000 oz)
No of oz to be served (notices)
off
Total monthly oz silver served (contracts)
2583 contracts (12,915,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
7,481,580.0 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 2 customer deposits:
i) Into HSBC: 5060.048 oz
ii) Into Brinks: 600,308.75 oz
total customer deposit: 605,368.798 oz
We had 1 customer withdrawals:
i) Out of Delaware: 3966.90
total withdrawals; 3966.900 oz
we had 0 adjustments:
Total dealer inventory: 70.574 million oz
Total of all silver inventory (dealer and customer) 177.079 million oz
.
The total number of notices filed today is represented by 83 contracts for 415,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (2583) x 5,000 oz = 12,915,000 oz to which we add the difference between the open interest for the front month of March (83) and the number of notices served upon today (83) x 5000 oz equals the number of ounces standing.
Thus the final standings for silver for the March contract month:
2583 (notices served so far) + { OI for front month of March(83) -number of notices served upon today (83} x 5000 oz = 12,915,000 oz standing for the March contract month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://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:
March 30/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes.
March 27/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes
March 26 we had another huge withdrawal of 5.97 tonnes of gold. This gold is heading straight to the vaults of Shanghai, China/GLD inventory 737.24 tonnes
March 25.2015 we had a withdrawal of 1.19 tonnes of gold from the GLD/Inventory at 743.21 tonnes
March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes
March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes
march 20/we had no changes in inventory at the GLD/Inventory at 749.77 tonnes
March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes
March 18/ we had a withdrawal of .9 tonnes of gold from the GLD/Inventory at 749.77 tonnes
March 17.2015: no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 30/2015 / we had no changes in gold/Inventory at 737.24 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 : 737.24 tonnes.
end
And now for silver (SLV):
March 30.2015: no changes in inventory at the SLV/inventory at 323.888 million oz.
March 27. we had a huge withdrawal of 1.439 million oz leave the SLV/Inventory rests this weekend at 323.888 million oz
March 26.2015; no change in silver inventory/SLV inventory 325.323 million oz
March 25.2015:no change in silver inventory/SLV inventory 325.323 million oz
March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz
March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz
March 20/ no changes in silver inventory/327.332 million oz
March 19/ no change in silver inventory/327.332 million oz
March 18/ no change in silver inventory/327.332 million oz
March 17/ no change in silver inventory/327.332 million oz
March 16/no change in silver inventory/327.332 million oz
March 30/2015 we had no changes in silver inventory at the SLV/inventory rests at 323.888 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 8.7% percent to NAV in usa funds and Negative 8.6% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 60.8%
Percentage of fund in silver:38.8%
cash .4%
( March 30/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV falls to + 0.54%!!!!! NAV (March 30/2015)
3. Sprott gold fund (PHYS): premium to NAV falls -.50% to NAV(March 30 /2015)
Note: Sprott silver trust back into positive territory at +0.43%.
Sprott physical gold trust is back into negative territory at -.50%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Goldcore/Mark O’Byrne)
‘Peak Gold’ in 2015? – Goldman Sachs Research Warns of Peak Gold Production
By Mark O’Byrne March 30, 2015 0 Comments
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Goldman warns that peak gold may happen in 2015
New report says there are only “20 years of known mineable reserves of gold”
Discoveries of new sources of gold production peaked in 1995 despite major bull market
Production lags new finds in 20 year cycle – Indicates 2015 may be year of peak gold production
Production in major gold mining countries has dropped in recent years
This will provide support and should lead to higher prices in long term
For many years, we have written about ‘peak gold’ and the ramifications of the underappreciated peak gold phenomenon for the gold market.
Major gold mining countries have seen declines in their gold production in recent years despite the strong bull market of the last decade.
On Friday, Zero Hedge highlighted a report from Eugene King of Goldman Sachs which supports our assertion. According to King, there are “only 20 years of known mineable reserves of gold and diamonds.”
Discoveries of new, mineable gold reserves peaked in 1995 at around 140 million ounces. This followed steady annual increases since 1991 when global discoveries were at around 60 million ounces.
In 2013, new discoveries totalled less than 10 million ounces. While this, in part, reflects the severe pullback in gold prices – and hence, profitability of mining – data shows that new discoveries were in decline even as gold prices continued to rise.
Following the 1995 peak, new discoveries have been in a dramatic downward trend. Discoveries rose from 2002 till 2008 along with gold prices.
However, there was a dramatic fall-off in new discoveries from 2008 even as prices surged to record nominal highs in 2011 when one would expect the search for new deposits to have intensified.
Gold production tends to lag discoveries by around 20 years. Data shows that production steadily increased from 2008 to 2014. It may be that 2015 is the year that gold production peaks – 20 years after the 1995 peak discovery.
As we have pointed out for many years, the traditionally strong gold producing countries like South Africa, the U.S. and Australia have seen falls in production in recent years which supports the argument for peak gold production.
South African Gold Production
Peak gold has happened or will soon happen. The geological evidence suggests that it may happen in the near term due to the lack of major discoveries and the growing difficulty large and small gold mining companies are having increasing their production.
It is also signalled in the fact that most of the larger gold producing countries, not just Australia, the U.S. and South Africa but also Canada, Peru, Indonesia and others, have all seen production drops in recent years.
China and Russia are the two only large producers to have seen production increases.
Peak gold has yet to be considered and analysed by the international financial community. Goldman’s report may begin to change that and lead to debate of this important topic.
The implications of this trend – if the assertion proves to be correct – are manifold.
The ability of bullion banks to manipulate the price of gold downwards on futures markets will be impaired in an era of declining gold production. As China, Russia and other eastern central banks continue to accumulate gold in massive volumes with which to back their currencies it will be highly unlikely that gold prices will be suppressed for much longer.
U.S. Annual Gold Production
There is a risk that peak gold has happened or will happen soon with a consequent impact on the gold mining industry and on gold prices in the coming years.
The fact that peak gold may take place at a time when the world is engaged in a risky monetary experiment involving massive fiat paper and electronic money creation bodes very well for gold’s long term outlook.
MARKET UPDATE
Today’s AM fix was USD 1,187.40, EUR 1,095.01 and GBP 800.36 per ounce.
Friday’s AM fix was USD 1,198.00, EUR 1,106.70 and GBP 805.32 per ounce.
Gold and silver were both 1.3% higher last week – the second consecutive week of gains which is positive from a momentum perspective.
Gold in British Pounds - 1 Week
Gold dropped 0.39 percent or $4.70 and closed at $1,198.70 an ounce on Friday, while silver lost 0.59 percent or $0.1 at $16.95 an ounce. Overnight in Singapore, gold prices fell nearly 0.4 percent to $1,187 per ounce and weakness continued in London.
Holdings in gold-backed exchange-traded products rose on Friday for the first time in four days.
Silver fell 1.8 percent to $16.76 an ounce in London but is set to climb 6.1 percent this quarter. Platinum lost 1.1 percent to $1,127 an ounce, heading for a third straight quarterly loss.
end
Surprisingly some gold miners are hedging gold thinking that the low price of gold is normal market forces:
(courtesy GATA)
Miners’ gold forward sales surged 103 tonnes last year, most since 1999
Submitted by cpowell on Sun, 2015-03-29 03:57. Section: Daily Dispatches
By Jan Harvey
Reuters
Friday, March 27, 2015
The volume of gold sold forward by mining companies rose by 103 tonnes last year, the biggest annual increase since 1999, an industry report showed on Friday.
That far outstrips an estimate given late last year of 42-52 tonnes, after Mexican gold and silver miner Fresnillo said it was hedging 47 tonnes of output over five years.
In their quarterly Global Hedge Book Analysis, Societe Generale and GFMS analysts at Thomson Reuters said the bulk of the rise in the global gold hedge book last year was driven by Fresnillo and Russia’s Polyus Gold, which announced a major hedging deal in July. …
… For the remainder of the report:
http://www.reuters.com/article/2015/03/27/gold-hedging-idUSL6N0WT2IP2015…
end
(courtesy Reuters/see below)
Australia ready to join Asian Infrastructure Investment Bank
Submitted by cpowell on Sun, 2015-03-29 10:00. Section: Daily Dispatches
Prime Minister Tony Abbott Gives Green Light to $100 Billion Asian Infrastructure Investment Bank
Stephanie Peatling and Philip Wen
Sydney Morning Herald
Sunday, March 29, 2015
Prime Minister Tony Abbott has cleared the way for Australia to join the new multi-billion-dollar, China-led Asian Infrastructure Investment Bank but says some issues remain before Australia could consider full membership.
Abbott announced Australia would sign a memorandum of understanding that will allow Australia to be involved in negotiations to set up the $100 billion bank.
“Key matters to be resolved before Australia considers joining the Asian Infrastructure Investment Bank include the bank’s board of directors having authority over key investment decisions, and that no one country control the bank,” Abbott said in a statement. …
… For the remainder of the report:
http://www.smh.com.au/federal-politics/political-news/prime-minister-ton…
end
(courtesy Mike Kosares/GATA)
Mike Kosares: Reflections in a golden eye
Submitted by cpowell on Mon, 2015-03-30 02:59. Section: Daily Dispatches
11a PHT Monday, March 30, 2015
Dear Friend of GATA and Gold:
In his latest commentary at USAGold, Mike Kosares writes that short-term profits from gold trading may be paltry compared to long-term profits when financial systems come apart, expresses skepticism about the new London gold-fix mechanism, argues that government deficits matter because the public debt can become a serious burden on society, predicts that the Chinese yuan’s ascendance will support gold, and maintains that the seemingly slow pace of central bank gold repatriation is not as important as the intent of the repatriation. Kosares’ commentary is headlined “Reflections in a Golden Eye” and it’s posted at USAGold here:
http://www.usagold.com/publications/Apr2015SpecialReport.html
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Bill Holter/Miles Franklin)
Fw: Cash is trash
After last week’s air tragedy, maybe a poor thought process but please stay with me. Would you ever get on an airplane if there was no pilot? Would you be confident of reaching your destination safely? Of course not. Whether you know it or not, you are living in an economic and financial “airplane” with Janet Yellen as the pilot. The sad thing is this, even she admits the airplane is broken, I’ll explain why shortly.
Mrs. Yellen gave a speech Friday for the San Francisco Fed. The full text can be found here http://www.businessinsider.com/janet-yellen-san-francisco-fed-speech-2015-3 . Before getting into the particulars, I must say it is “sad” to see our “pilot” go back and forth while not saying much of anything…and what was said was largely incorrect or misinformation. In short, I believe Mrs. Yellen was pandering to Wall Street with her continual line of “we will raise rates later but not yet, and when we do is will be gradual” (my paraphrase). As I have written many times before, the Fed cannot raise rates and if they did the markets will not even be open for trade within two weeks!
First and foremost, let’s look at a few of the Fed’s assumptions. They assume unemployment is 5.5%, the economy is growing and inflation is “too low” and well below 2%. Let’s pull these assumptions apart and then put them back together. Unemployment is not 5.5%, this is total fallacy. The workforce participation rate is plumbing 40 year lows now and those “not looking for work” …because they cannot find any are just thrown in a heap and forgotten about. This has the effect of making the “potential” workforce smaller than it really is, a statistical gimmick for the ages. If unemployment was calculated as it once was back in 1980, the rate would be above 17% as calculated by John Williams Shadow Stats. The 5.5% number is a hilarious fabrication Joseph Goebbels would be ashamed of!
Next, we have the economic growth rate. Friday’s final 4th quarter report claimed 2.2% growth, if you look at the Fed’s OWN MODEL, the first quarter is growing at .2% (NOT two percent, POINT two percent!). If we go one step further and look at “how” the growth rate is calculated, we se there is an “assumption” for inflation. The way it works is the inflation assumption is deducted from the nominal growth rate to arrive at a real growth rate. If inflation is low, it’s only a small deduction to growth. If inflation is high, the deduction to growth will be greater. For example, if we have nominal growth of 3% and inflation at 1%, the real rate is 3%minus1% =2%. But what if the inflation rate is really 5%? Now we get 3%minus5%= a negative 2%, or contraction …otherwise known as recession…and herein lies the problem!
The Fed uses BLS statistics for their models and uses CPI and PPI numbers in their calculations. These are NOT true inflation numbers. Yes, they are massaged, twisted and just plain made up, but this is not the “fallacy”. The definition of inflation or deflation has nothing to do with “prices”, price movement is the result, not the cause. The growth of, or the contraction of the money supply is the definition of either inflation or deflation. Janet Yellen knows this, Bernanke and Greenspan knew this …they don’t want YOU to know this. They don’t want you to know this because if you did, then you would know we have not had a single quarter since 2007 with real growth!!!
Now that we have that out of the way, let’s look at a few of her quotes and finish with a “Q+A” mindblower. Mrs. Yellen contends “With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year.” She followed this by saying …the economy in an “underlying” sense remains quite weak by historical standards. So which is it? Strong or weak? Of course, all of this was prefaced by admitting to “extraordinary monetary ease” over the last six years and then later spoke about the timing of rates hikes being difficult because of the “long lag times”. Does six years qualify as “long”? I can still remember studying money and banking in college, the “lag time” was generally considered six to nine months, has so much changed in the thirty years I’ve been out of school? (The answer of course is yes, it has).
Another quote, and an obvious case of “mental lag” on her part, she said, “An environment of prolonged low short-term rates could prompt an excessive buildup in leverage or cause underwriting standards to erode as investors take on risks they cannot measure or manage appropriately in a reach for yield”. Really? Ya think? Are you saying that abnormally low short term interest rates tend to blow bubbles faster than Lawrence Welk?
Before getting to the real fun, let’s look at what I think was a first admission on the part of the Fed regarding their balance sheet. Mrs. Yellen said “But if growth was to falter and inflation was to fall yet further, the effective lower bound on nominal interest rates could limit the Committee’s ability to provide the needed degree of accommodation. With an already large balance sheet, for example, the FOMC might be concerned about potential costs and risks associated with further asset purchases.” Do you understand what she just said? In my own blunt words, she said “if the markets were to turn down and economy further down from here, since interest rates are already at zero …there is nothing we could do. We have already expanded our balance sheet to the limit and would risk bankrupting even ourselves with further bond purchases. We are out of ammo”! Sad, but very true, the Fed can only rely on falsified data to portray growth and can only threaten higher rates, but never deliver them.
Lastly, during the Q+A session Mrs. Yellen made the comment “cash is not a convenient store of value”. After it was all said and done, CNBC’s Rick Santelli went off on a rant and can be seen here https://www.youtube.com/watch?v=1phkV1LFdJY&feature=player_embedded
. If I may interpret for you, Mrs. Yellen is saying they not only “want” to debase the dollar and create inflation, they absolutely MUST debase and devalue the dollar in or to “reflate” and KEEP REFLATING! There is no other alternative but we already knew this. We knew she knew this, what was shocking is she actually said this! Let me finish with a three word translation for you, “Cash is trash”. Janet Yellen, 3/27/14. Regards, Bill Holter
Attachments area
Preview YouTube video santelli
end
And now for the important paper stories for today:
Early Monday morning trading from Europe/Asia
1. Stocks generally higher on major Chinese bourses on false rumours of the PBPC rate cut /yen falls to 119.82
1b Chinese yuan vs USA dollar/yuan slightly strengthens to 6.2073
2 Nikkei up by 125.77 or 0.65%
3. Europe stocks in the green/USA dollar index up to 97.83/Euro falls to 1.0833
3b Japan 10 year bond yield .37% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.82/Maintains rise in Japanese 10 yr bond yield/Japan losing control over their huge bubble of a bond market/
3c Nikkei still above 19,000
3d USA/Yen rate now just below the 120 barrier this morning
3e WTI 47.97 Brent 55.59
3f Gold down/Yen down
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and down for Brent this morning despite the fact a proxy civil war continues in Yemen
3i European bond buying continues to push yields lower on all fronts in the EMU
Except Greece which sees its 2 year rate slightly rises to 20.74%/Greek stocks down by .15% today/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 10.99% (down by 6 basis point in yield)
3k Gold at 1184.00 dollars/silver $16.69
3l USA vs Russian rouble; (Russian rouble down 1/100 rouble/dollar in value) 57.82 , falling with the lower brent oil price
3m oil into the 47 dollar handle for WTI and 55 handle for Brent
3n Higher foreign deposits out of China sees hugh risk of outflows and a currency depreciation. This scan spell financial disaster for the rest of the world/China may be forced to do QE!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering
3r the 7 year German bund still is in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s Eurogroup reject Greece’s bid for more euros of bailout funds as proposal is to vague. The ECB increases ELA by 1.5 billion euros up to 71.3 billion euros. This money is used to replace fleeing depositors.
3t Bloomberg calculates Greece’s shortfall in March at 3.5 billion euros.
4. USA 10 year treasury bond at 1.96% early this morning. Thirty year rate well below 3% at 2.54%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy zero hedge/Jim Reid Deutsche bank)
Futures Jump On Chinese Easinng Speculation, False Rumor Of PBOC Rate Cut
With the rest of the developed world’s central banks waiting for the Fed to admit defeat for one more year and delay its proposed rate hike (or launch NIRP/QE4 outright) it was all about China (the same China which a month ago we said would launch QE sooner or later) and hope that its central bank would boost asset prices, when over the weekend the PBoC governor hinted that more easing is imminent to offset the accelerating drag after he admitted that the nation’s growth rate has tumbled “a bit” too much and that policy makers have scope to respond. How much scope it really has now that its bad debt is rising exponentially is a different question. It got so bad, Shanghai Securities News leaked a false rumor earlier forcing many to believe China would announce an unexpected rate cut as soon as today, in the process sending the Shanghai Composite soaring by 2.6%.
PBOC TO HOLD PRESS CONFERENCE AT 3:30 P.M.: SHANGHAI SEC. NEWS
PBOC TO MAKE `IMPORTANT’ ANNOUNCEMENT AT 3:30 PM BRIEFING: NEWS
This was promptly denied:
PBOC NEWS OFFICE SAYS UNAWARE OF BRIEFING THIS AFTERNOON
… But the momentum for the dumb money (and we mean dumb money: remember that 30% Of New Equity Investors In China Have Elementary Education Or Less, Bloomberg Says) was already in place, and the already unprecedented Chinese stock bubble just got that much bigger and that much closer to popping.
For now, algos don’t care, and the surge in China was quickly carried over to Europe and the US, both of which have seen substantial strength across equity markets, even as the German 10Y Bund dropped to 0.18% earlier, now that every single bank is fighting every other single bank for what little unencumbered “high quality collateral” remains.
But if China’s rumors were positive for stocks, oil couldn’t care less and Brent extended Friday’s selloff into a second day, falling below $56/bbl amid indications bearish pressure from Iran nuclear talks is building, and the upside related to the Yemen proxy war is fading. WTI outpacing Brent decline.
“Further downward pressure may come at any time from a nuclear agreement with Iran,” says Societe Generale head of oil mkt research Michael Wittner. “Talks are reportedly intense, with twists and turns seeming to occur at least daily.”Wittner added that “The conflict in Yemen poses no threat to Saudi production, Yemeni production is small and unimportant, and the risk of a disruption to oil shipments through the Bab el-Mandeb Strait is considered low. We believe there will be continued downward pressure on oil prices.”
Well, the PBOC better step up and fast.
European equities have started the week on the front foot in a continuation of the positive sentiment seen overnight in Asia-Pacific trade with Chinese equities supported by comments from the PBoC Governor who hinted at more easing (PBoC announced new housing measures at 1003BST) and as details emerged over China’s Silk Road economic belt plans which will help boost infrastructure in the country. As such, Hang Seng (+1.5%) rose the most for the year while the Shanghai Comp (+2.6%) touched its highest level since May’08. Furthermore, sentiment in Europe has also been supported by comments out of Athens suggesting the Greek government are increasing their efforts to secure much-needed financing. Additionally, from a technical perspective, German equities were further boosted after the DAX cash broke above 12,000, with German export names also supported by the broadly weaker EUR.
From a fixed income perspective, Bunds have traded higher since the get-go with some suggesting the move higher could be a by-product of increased QE purchases by the ECB. This also comes alongside USTs trading lower, so could help provide some explanation for the move with flows into core European paper. From a supply perspective, focus for Europe will also reside on the upcoming BTP offering from the Italian treasury at 1000BST.
Fitch downgraded Greece to CCC from B. Fitch said the downgrade reflects lack of access to markets and uncertainty regarding potential disbursements from the Troika group of lenders. (RTRS) European finance ministers will probably not meet again before the middle of April to give the country more funds. Officials added that the proposals sent by Greece are lacking the required detail. (WSJ) Conversely EU sources suggest that the talks between the Eurogroup and Greece are `encouraging` and Greece may receive funds in the first three days of the week. (La Republicca) Additionally, sources also suggest Greece could enter into bankruptcy by 20th April if it fails to secure additional financing. (RTRS) Of note, the Syriza party is due hold an emergency cabinet council meeting at 4pm local time. German Finance Ministry Spokesman Jaeger today said that Greek proposals have not yet been submitted. (BBG)
As has been the case over the past few weeks, the USD-index has provided a bulk of the price action with the greenback continuing to pull away from its post-GDP lows, with the higher US yields also providing the USD with a boost, particularly in USD/JPY. Elsewhere, EUR/GBP was initially subject to some month-demand with the cross also led higher by political uncertainty in the UK. Nonetheless, this upside was short-lived after the USD-strength saw EUR/USD trip stops through 1.0850 to the downside. However, it is worth keeping an eye on major pairs as the USD-index pulls away from its best levels heading into the European open, with GBP broadly benefitting from a move higher in GBP/JPY.
In summary: European stocks slightly pare earlier gains, rise most since March 20 as PBOC head Zhou Xiaochuan indicated that China’s growth rate has slipped, and that the govt is able to respond. Dollar rises with U.S. equity index futures while crude declines. Goldman reiterates overweight call on global equities on 3-, 12-month terms. German Finance Min. says Greece hasn’t yet submitted it’s official list of reforms.
Market Wrap
S&P 500 futures up 0.6% to 2065.5
Stoxx 600 up 0.9% to 399
US 10Yr yield little changed at 1.96%
German 10Yr yield down 2bps to 0.19%
MSCI Asia Pacific up 0.1% to 146.7
Gold spot down 1% to $1187.3/oz
Eurostoxx 50 +1.1%, FTSE 100 +0.5%, CAC 40 +1%, DAX +1.5%, IBEX +0.7%, FTSEMIB +1.1%, SMI +0.9%
Asian stocks gain slightly with Shanghai Composite outperforming and ASX underperforming.
MSCI Asia Pacific up 0.1% to 146.7
Nikkei 225 up 0.7%, Hang Seng up 1.5%, Kospi up 0.5%, Shanghai Composite up 2.6%, ASX down 1.2%, Sensex up 1.9%
UnitedHealth to Buy Catamaran to Boost Pharmacy Benefit Svc
Horizon to Buy Hyperion for $1.1b, Gain Rare-Disease Drug
Euro down 0.34% to $1.0852
Dollar Index up 0.42% to 97.7
Italian 10Yr yield down 1bps to 1.34%
Spanish 10Yr yield down 1bps to 1.32%
French 10Yr yield down 1bps to 0.49%
S&P GSCI Index down 1.1% to 398.3
Brent Futures down 1.7% to $55.4/bbl, WTI Futures down 2.4% to $47.7/bbl
LME 3m Copper up 0.6% to $6093/MT
LME 3m Nickel down 1.1% to $13140/MT
Wheat futures up 0.6% to 511 USd/bu
Bulletin headline summary by Bloomberg and RanSquawk
Europe trades higher in a continuation of the trend seen during Asia-Pacific trade, with participants also optimistic over Greek/Eurogroup negotiations
USD-index continues to lead the way for FX markets after recovering from post-GDP lows, although has since given back some of its gains heading into the North American open
Looking ahead, today sees the release of US personal income, personal spending and pending home sales.
Treasuries steady before personal income/ spending reports as market’s focus shifts to ADP on Wednesday, nonfarm payrolls on Good Friday.
China’s central bank chief said that the nation’s growth rate has tumbled “a bit” too much and that policy makers have scope to respond, underscoring forecasts for further monetary easing in the world’s second-largest economy
China lowered down-payment requirements for some second homes, further easing mortgage policies as the government seeks to prop up the property market and counter an economic slowdown
Greece PM Tsipras will update lawmakers Monday on talks held over the weekend in Brussels between Greek officials and representatives of the country’s creditors to secure more funds from the euro area and stave off fiscal collapse
Shiite Houthis fought forces loyal to Yemen’s embattled president for control of his government’s last stronghold as Saudi Arabia led air assaults on rebel positions and held out the possibility of a ground invasion
Iran and six world powers intensified efforts to reach a nuclear accord as foreign ministers from all sides met with their deadline less than 48 hours away
Sovereign 10Y yields mostly lower. Asian, European stocks gain, U.S. equity-index futures rise. Crude and gold decline, copper higher
DB’s Jim Reid wraps up the weekend event summary
As we start Easter week Asian markets have started on a firmer footing. The Nikkei (+0.68%), Hang Seng (+1.50%), Shanghai Comp (+1.62%) and Kospi (+0.43%) are all higher as we go to print. Markets in China in particular appeared to be trading with better sentiment after the PBOC Governor Zhou indicated that the Central Bank still has room to move given that growth has fallen more than desired. Specifically Zhou noted that China can have room to act with both interest rates and quantitative measures. Credit markets are 1- 2bps better this morning.
Geopolitics continues to bubble under the surface however with the Iran nuclear talks attracting plenty of attention over the weekend with tensions continuing to run high and talks appearing near deadlocked. According to the BBC, ahead of tomorrow’s deadline, leaders from Iran and Western diplomats are due to reconvene in an effort bid to finalize an agreement. As per the report, US officials have said that all parties, including Iran, have agreed upon there needing to be ‘a phased step by step reciprocal approach’ in the hope that Iran’s approach to stepping back from its nuclear programme coincides with a phased lifting of sanctions. Negotiations appear to be tense with a conclusion before the deadline far from certain. UK Foreign Minister Hammond commented that ‘Iran has to take a deep breath and take tough decisions’ while Iran’s Deputy Foreign Minister Araghchi noted that ‘the other side must make serious decisions’.
Elsewhere Greece continues to dominate the headlines and on Friday we learned that the government has submitted a list of measures to its creditors. The list – which is more of a ‘staff level agreement’ rather than a submitted list of reform proposals given that the technical teams are still in data collection mode and have yet to have started negotiations – includes a number of revenue raising measures aimed at securing €3bn, including a controversial series of privatizations, raising income tax, increasing levies on alcohol and tax and cutting down on tax evasion. Greek press Ekathimerini also reported that the outline includes a 1.5% budget surplus target for 2015, which is well below the current 3% target in the existing bailout program. After talks between the government and its creditors over the weekend, Reuters quoted a Greek government official as saying that the ‘Brussels Group discussions continue in a good climate of cooperation’ but that ‘we have agreed that we need to draw up suitable policies which will shift the burden from those on the lowest income to the highest’, suggesting that further substance and detail will be required before we see any sort of agreement on reform measures and a subsequent release of funds. Headlines on Bloomberg suggest that PM Tsipras is due to update lawmakers on Monday over the weekend’s talks.
Back to markets and recapping Friday’s session, US equities snapped a four consecutive sessions of declines with a +0.24% gain on Friday, taking the index modestly back into positive territory (+0.10%) YTD. Treasuries firmed throughout the session, with the benchmark 10y yield eventually finishing 2.8bps tighter at 1.962% while the Dollar, as measured by the broader DXY, was a touch lower (-0.15%). Despite a relatively muted market move, comments towards the end of the US session from the Fed’s Yellen attracted the bulk of the headlines. In comments at a conference in San Francisco, the Fed Chair said that given an improvement in economic conditions, an ‘increase in the target range for that rate may well be warranted later this year’’. Yellen went on to say that the ‘actual path of policy will evolve as economic conditions evolve, and policy tightening could speed up, slow down, pause, or even reverse course depending on actual and expected developments in real activity and inflation’, before going on to say that any move would be gradual (Reuters). Despite being balanced to the more hawkish side, the comments essentially reflected the previous FOMC statement by keeping open the option of a move, but highlighting the data dependency that will essentially determine the date and pace of liftoff.
Away from Yellen and on the data front, the third Q4 GDP reading was unchanged at +2.2% saar, although below expectations of +2.4%. Personal consumption meanwhile was revised up 20bps to +4.4% qoq as expected while the Core PCE print was unchanged at +1.1% qoq (as expected). The final March reading of the University of Michigan consumer sentiment reading was encouraging with the reading revised up 1.8pts to 93.0, a point ahead of expectations.
Elsewhere there was something of a reversal in oil markets on Friday, as WTI (-4.98%) and Brent (-4.70%) gave up most of Thursday’s gains to close at $48.57/bbl and $56.41/bbl respectively. The +4.94% weekly return for WTI in particular however did snap three consecutive negative weekly returns. Equity markets in the Middle-East closed firmer over the weekend, led by markets in Saudi Arabia (+1.9%) having been supported by comments from the Saudi King Salman who told a group of leaders in the region that the coalition would continue its offensive until stability is restored. Meanwhile, Reuters has reported further airstrikes overnight with key rebel military targets struck. The same article also quoted a Saudi spokesman as saying that the coalition would step up the pressure on the Houthis and their allies over the coming days and haven’t ruled out the potential for ground force. Despite a unified front from the coalition to restore some sort of stability, geopolitical risk remains high with the Iranian finance minister pleading for a stop to the airstrikes on Friday and the BBC reporting that Iran is alleged to be providing support to the rebel Houthis.
Moving on, it was a similar story in Europe on Friday with bourses a touch firmer at the close. Indeed, the Stoxx 600 (+0.24%), DAX (+0.21%) and CAC (+0.55%) all closed higher following a somewhat volatile week in which most major markets closed lower. Bond markets were largely mixed. 10y Bunds closed 0.8bps tighter at 0.206% while markets in Italy and Spain were 4bps and 6bps wider respectively. Data offered little in the way of surprises on the whole. French consumer confidence for March printed in line with consensus at 93 and at the highest level since November 2010. Elsewhere, Italian retail sales (+1.7% yoy vs. -0.3% expected) and the German import price index came in ahead of expectations (-3.0% yoy vs. -4.4% expected).
Wrapping up, it’s a busy calendar in a holiday-shortened week. We start in the UK this morning with mortgage approvals, money supply and net consumer credit data and follow this up with confidence indicators for the Euro-area as well as the preliminary March CPI reading out of Germany. It’s no less quiet in the US this afternoon where we get personal income and spending data, along with the PCE deflator reading, pending home sales and the Dallas Fed manufacturing activity reading. Tuesday kicks off in the Asia timezone where we get a host of readings for Japan including cash earnings, housing starts and private sector credit. Closer to home, the all-important advanced March Euro-area CPI print will be front and centre while we’ve also got French PPI and consumer spending, German unemployment and Q4 GDP in the UK to look forward to. Data in the US on Tuesday includes the ISM Milwaukee, S&P/Case Shiller, consumer confidence and Chicago PMI. We start the new month on Wednesday in Japan with the Tankan survey while the official and HSBC manufacturing print in China will also be due up. Manufacturing PMI’s dominate the data docket in Europe on Wednesday too with the final March prints for France, Germany and the Euro-area as well as the preliminary releases in the UK and Italy. The afternoon focus in the US will be on the ADP employment changed print, along with the final reading for the manufacturing PMI, ISM manufacturing and prices paid, vehicle sales and finally construction spending. The calendar takes a breather on Thursday with no releases due in Europe. Across the Atlantic however Challenger job cuts and initial jobless claims kick off the session, followed by the February trade balance, ISM NY and factory orders. With it being a public holiday for most markets on Friday, we’ve just got the services and composite PMI’s due in China and Japan in the morning. The likely main highlight of the week comes on Friday afternoon however in the US where we get the March payrolls number and associated employment indicators with it. Finally, there’ll be no shortage of Fedspeak this week with George, Lacker, Lockhart, Mester and Kocherlakota all due to speak.
end
A very important commentary from Raul Meijer who states that Greece knows that the dual mandate for the people of staying in the Euro and also less austerity will not work. The citizens must choose and only a referendum can decide
an extremely important piece
(courtesy Raul Meijer)
Greece Prepares To Leave
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
SATURDAY March 28.2015
Speculation and expert comments are thrown around once more – or still – like candy on Halloween. Let me therefore retrace what I’ve said before. Because I think it’s really awfully simple, once you got the underlying factors in place.
But first, if one thing has become obvious after Syriza was elected to form a Greek government on January 25, it’s that the party is not ‘radical’ or ‘extremist’. Those monikers can now be swept off all editorial desks across the world, and whoever keeps using them risks looking like an awful fool.
All Syriza has done to date, when you look from an objective point of view, is to throw out feelers, trying to figure out what the rest of the eurozone would do. And to make sure that whatever responses it got are well documented.
Because of course Greece (through Syriza) is preparing to leave the eurozone. Of course the effects and consequences of such a step are being discussed, non-stop. They would be fools if they didn’t have these discussions. And of course there will be a r