Good evening Ladies and Gentlemen:
First: your quote of the day!!@
The Brits still have a sense of humour. This looks like a London Underground message board.
Here are the following closes for gold and silver today:
Gold: $1162.90 down $0.40 (comex closing time)
Silver $15.35 up 20 cents.
In the access market 5:15 pm
Gold $1159.60
Silver: $15.40
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering 0 notices for nil ounces . Silver saw 38 notices filed for 190,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 248.23 tonnes for a loss of 55 tonnes over that period.
In silver, the open interest fell by a considerable 5,431 contracts despite the fact that Wednesday’s price was up by 20 cents. The total silver OI continues to remain extremely high, with today’s reading at 191,661 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .958 billion oz or 139% of annual global silver production (ex Russia ex China). 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 as they continue to raid as basically they have no other alternative. There can only be one answer as to how the OI of comex silver is now just under 1 billion oz coupled with a low price under 16.00 dollars: sovereign China through proxies are the long and they have extremely deep pockets.
In silver we had 38 notices served upon for 190,000 oz.
In gold, the total comex gold OI rests tonight at 453,498 for a gain of 1,353 contracts as gold was up $10.90 yesterday. We had 0 notices filed for nil oz today.
We had no change in tonnage at the gold inventory at the GLD; thus the inventory rests tonight at 709.65 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. I am sure that 700 tonnes is the rock bottom inventory in gold. Anything below this level is just paper and the bankers know that they cannot retrieve “paper gold” to send it onwards to China . In silver, we had a huge addition in inventory at the SLV to the tune of 1.337 million oz/ Inventory now rests at 326.542 million oz.
We have a few important stories to bring to your attention today…
1. Today, we had the open interest in silver fall by 5,431 contracts to 191,661 despite the fact that silver was up by 20 cents yesterday. We must have had considerable shortcovering by the bankers as they feared something was brewing in the silver arena. The OI for gold rose by another 1,353 contracts up to 453,498 contracts as the price of gold was up by $10.90 yesterday.
(report Harvey)
2 Today, 6 important commentaries on Greece
(zero hedge, Bloomberg/Deutsche bank/Reuters/Peter Cleppe)
3. Two commentaries on the collapse in the stock market in China
(zero hedge)
4.USA data tonight; jobless report/skyrocketing back towards 300,000
(1 commentary)
5. Gold trading overnight
(Goldcore/Mark O’Byrne/)
6. Trading from Asia and Europe overnight
(zero hedge)
7. Trading of equities/ New York
(zero hedge)
8. Bill Holter’s very important commentary tonight is titled:
“An Indication of Global PPT Failure?”
9. Dave Kranzler and Craig Roberts deliver also a very important commentary:
“Are big banks using derivatives to suppress bullion prices?”
10. Simon Black discusses Nigel Farage’s speech to the European Parliament where he states that the Euro experiment is one big failure and he likens the Euro to a “New Berlin Wall”
(Simon Black/Nigel Farage)
plus other important topics….
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 rose by 1,353 contracts from 452,145 up to 453,498 as gold was up $10.90 in price yesterday (at the comex close). We are now in the next contract month of July and here the OI surprisingly fell by 95 contracts to 146 contracts. We had 100 notices filed yesterday and thus we gained 5 contracts or an additional 500 ounces will stand in this non active delivery month of July. The next big delivery month is August and here the OI fell by 9110 contracts down to 270,287. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 149,941. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 185,958 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI fell by a huge 5,431 contracts from 197,092 down to 191,661 despite the fact that the price of silver was up by 20 cents in price with respect to yesterday’s trading. We continue to have our bankers pulling their hair out with respect to the continued high silver OI as today we have in all probability a huge shortcovering by the bankers as they sensed something was brewing in the silver arena. The next delivery month is July and here the OI fell by 280 contracts down to 623. We had 294 notices served upon yesterday and thus we gained 14 contracts or an additional 70,000 ounces of silver will stand for delivery in this active month of July. This is the first time in quite some time that we have not lost any silver ounces standing immediately after first day notice. The August contract month saw it’s OI fall by 94 contracts down to 169. The next major active delivery month is September and here the OI fall by a massive 6,108 contracts to 131,417. The estimated volume today was excellent at 51,726 contracts (just comex sales during regular business hours) with mucho help from the HFT traders. The confirmed volume yesterday (regular plus access market) came in at 79,619 contracts which is huge in volume. We had 38 notices filed for 190,000 oz
July initial standing
July 9.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
32.15 (1 kilobar)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
1,611.98 oz (Brinks)
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
146 contracts 14,600 oz
Total monthly oz gold served (contracts) so far this month
410 contracts(41,000 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
nil oz
Total accumulative withdrawal of gold from the Customer inventory this month
80,487.3 oz
Today, we had 0 dealer transactions
we had zero dealer withdrawals
total Dealer withdrawals: nil oz
we had 0 dealer deposits
total dealer deposit: zero
we had 1 customer withdrawal
i) Out of Manfra; 32.15 oz (1 kilobar)
total customer withdrawal: 32.15 oz
We had 1 customer deposits:
i) Into Brinks: 1611.98 oz
Total customer deposit: 1611.98 ounces
We had 0 adjustments.
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts 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 July contract month, we take the total number of notices filed so far for the month (410) x 100 oz or 41,000 oz , to which we add the difference between the open interest for the front month of July (146) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the July contract month:
No of notices served so far (410) x 100 oz or ounces + {OI for the front month (146) – the number of notices served upon today (0) x 100 oz which equals 55,600 oz standing so far in this month of July (1.729 tonnes of gold).
we gained an additional 500 oz of gold standing in this non active delivery month of July. somebody was badly in need of physical gold today.
Total dealer inventory 493,204.734 or 15.34 tonnes
Total gold inventory (dealer and customer) = 7,980,912.60 oz or 248.23 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 248.23 tonnes for a loss of 55 tonnes over that period.
end
And now for silver
July silver initial standings
July 9 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
92,527.15 oz (CNT,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
38 contracts (190,000 oz)
No of oz to be served (notices)
585 contracts (2,925,000 oz)
Total monthly oz silver served (contracts)
2745 contracts (13,725,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
2,805,306.4 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 0 customer deposits:
total customer deposit: nil oz
We had 2 customer withdrawals:
i) Out of CNT: 1,983.000 oz???? (exact weight???)
ii) Out of Scotia: 90,544.15 oz
total withdrawals from customer: 92,527.15 oz
we had 1 huge adjustment
i) Out of CNT:
we had 1,186,143.09 oz of silver leave the dealer at CNT and this landed into the customer account of CNT
Total dealer inventory: 58.96 million oz
Total of all silver inventory (dealer and customer) 180.879 million oz
The total number of notices filed today for the July contract month is represented by 38 contracts for 190,000 oz. To calculate the number of silver ounces that will stand for delivery in July, we take the total number of notices filed for the month so far at (2745) x 5,000 oz = 13,725,000 oz to which we add the difference between the open interest for the front month of July (623) and the number of notices served upon today (38) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
2745 (notices served so far) + { OI for front month of July (623) -number of notices served upon today (38} x 5000 oz ,= 16,650,000 oz of silver standing for the July contract month.
We gained another 70,000 ounces standing in this active delivery month of July. Somebody, again, was in great need of physical silver today.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.comorhttp://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:
July 9/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 8/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 7/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 6/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 2/we had a huge withdrawal of inventory to the tune of 1.79 tonnes/rests tonight at 709.65 tonnes
July 1.2015; no change in inventory/rests tonight at 711.44 tonnes
June 30/no change in inventory/rests tonight at 711.44 tonnes
June 29/no change in inventory/rests tonight at 711.44 tonnes
June 26./it did not take our bankers long to raid the GLD. Yesterday they added 6.86 tonnes and today, 1.75 tonnes of that was withdrawn/Inventory tonight rests at 711.44 tonnes.
June 25/a huge addition of 6.86 tones of inventory at the GLD/Inventory rests tonight at 713..23 tonnes
June 24/ a good addition of.900 tonnes of gold into the GLD/Inventory rests at 706.37 tonnes
June 23/no change in gold inventory/rests tonight at 705.47 tonnes
June 22/ a huge increase of 3.27 tonnes of gold into GLD/Inventory tonight: 705.47 tonnes
July 9 GLD : 709.65 tonnes
end
And now for silver (SLV)
July 9/ a huge increase in inventory at the SLV of 1.337 million oz. Inventory rests tonight at 326.542 million oz
July 8/no change in inventory at the SLV/rests at 325.205
July 7/no change in inventory at the SLV/rests at 325.205 tonnes
July 6/we have a slight inventory withdrawal which no doubt paid fees. we lost 137,000 oz/Inventory rests tonight at 325.205 million oz
July 2/ no change in inventory at the SLV/rests tonight at 325.342 million oz
July 1/ we had an addition of 1,624,000 oz into the SLV inventory/rests tonight at 325.342 million oz
June 30/we lost another 621,000 oz of silver from the SLV/Inventory rests at 323.718 oz (somebody must be in great need of physical silver)
June 29/ a monstrous loss of 4.777 million oz of silver from the SLV/Inventory rests tonight at 324.339 million oz
June 26/today we had another addition of 198,000 of silver/Inventory rests at 329.116 million oz
June 25/ a huge increase of 1.242 million oz of silver into the SLV inventory/Inventory rests at 128.918 million oz
June 24/no change in inventory/rests tonight at 326.918 million oz
June 23/we had a small withdrawal of 956,000 oz/Inventory tonight rests at 326.918 million oz
July 9/2015: tonight inventory rests at 326.542 million oz
end
And now for our premiums to NAV for the funds I follow:
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 9.1 percent to NAV usa funds and Negative 9.4% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.4%
cash .3%
( July 9/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to 2.59%!!!! NAV (July 9/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV rises to – .38% toNAV(July 7/2015
Note: Sprott silver trust back into positive territory at +2.59%
Sprott physical gold trust is back into negative territory at -.38%
Central fund of Canada’s is still in jail.
Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:
SII.CN Sprott formally launches previously announced offers to CentralGoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *
end
And now overnight trading in gold/silver from Europe and Asia/plus physical stories that might interest you:
First: Goldcore’s Mark O’Byrne
(courtesy Goldcore/Mark O’Byrne)
Growth of Chinese Margin Accounts Drove Bubble – Now Drives the Crash
By Mark O’ByrneJuly 9, 20150 Comments
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– Restrictions on borrowing to speculate were eased in 2010
– Middle class savers gradually saturated the market trading on leverage
– Market crash began as government tried to reign in leverage in overheated markets
– Leverage amplified gains on the up-leg, amplifies losses on down-leg forcing further sell offs
– Policy u-turns could not halt crash
Chinese markets bounced last night following drastic intervention by the state when it banned large players from selling their shares in listed companies – arresting the over 30% decline of the past four weeks.
By definition, a market ceases to be a market if selling is prohibited so it is far from clear at this point if the government can bring stability back into the system.
At the heart of the problem is the use of credit by “investors” to take up larger positions than they might have if they were gambling only with their savings. It was this trading on leverage which ignited the bubble and it is this same dynamic which is now applying downward force.
Until 2010 trading on leverage was tightly regulated in China – only those who could afford to lose could use it. Since that time, however, restrictions have been gradually eased although speculators still have to put up 50% of their own cash.
As momentum grew more middle class speculators entered the market which led to the mania of the past twelve months. In that time the value of shares listed on stock markets more than doubled to $10 trillion. Bloomberg estimate that the surge was financed by $339 billion of new credit.
From the start of this year the government – seeing the emergence of another massive bubble – attempted to rein in margin trading by raising the minimum level of cash required and closing of loopholes that allowed speculation on higher margins. Then on June 12th, when the crash began, the government put a limit on the use of margin trading itself.
When trading on leverage, at the officially sanctioned 2:1 ratio, small time middle class speculators were making double the gains as the market rose encouraging them to take on further debt for speculation and encouraging those on the sidelines to get involved.
However, as the market has plummeted they have made double the losses causing them to liquidate positions, forcing stock prices down and further liquidations.
The Chinese government was forced to change policy again, easing margin requirements, to try to shield investors from margin calls and to kick-start the markets but it appears that many investors had already learned a very painful lesson and as the Chinese securities regulator said a “panic sentiment” had overwhelmed the market.
Speculating with borrowed money played a key role in the 2008 crisis which nearly collapsed the global economy. It would appear that the entire world is hopelessly addicted to debt. The global debt ponzi scheme grows ever more fragile and with the consequences of this crash – the evaporation of trillions of dollars worth of debt on China’s banking system – yet to be seen, we may be entering a new phase of crisis.
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,162.10, EUR 1,053.96 and GBP 755.37 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,154.25, EUR 1,045.61 and GBP 749.46 per ounce.
Gold climbed $3.00 or 0.26 percent yesterday to $1,158.80 an ounce. Silver rose $0.04 or 0.26 percent to $15.14 an ounce.
Gold in Singapore for immediate delivery was up 0.6 percent at $1,164.30 an ounce an ounce near the end of the day, while gold in Switzerland was at $1,163.50 an ounce. U.S. gold futures for August delivery were off 60 cents an ounce at $1,162.90 an ounce.
The yellow metal touched $1,146.75 an ounce earlier earlier this week, only a few dollars from its low for the year, a key support level.
The release of the Fed minutes from the June 16-17 meeting showed that the central bank continues to falter with its plan to raise rates, in the wake of mixed economic data domestically and global market turbulence abroad.
UBS has slashed its price forecasts for both platinum and palladium this year because a decline in investor sentiment and a greater supply of the metals.
In late morning European trading gold is up 0.49 percent at $1,162.35 an ounce. Silver is up 1.59 percent at $15.35 an ounce and platinum is up 0.98 percent at $1,032.00 an ounce.
Breaking News and Research Here
end
Roberts and Kranzler: Are big banks using derivatives to suppress bullion prices?
Submitted by cpowell on Thu, 2015-07-09 17:23. Section: Daily Dispatches
By Paul Craig Roberts and Dave Kranzler
Wednesday, July 8, 2015
We have explained on a number of occasions how the Federal Reserve’s agents, the bullion banks (principally JPMorganChase, HSBC, and Scotia) sell uncovered shorts (“naked shorts”) on the Comex (gold futures market) to drive down an otherwise rising price of gold. By dumping so many uncovered short contracts into the futures market, an artificial increase in “paper gold” is created, and this increase in supply drives down the price.
This manipulation works because the hedge funds, the main purchasers of the short contracts, do not intend to take delivery of the gold represented by the contracts, settling instead in cash. This means that the banks that sold the uncovered contracts are never at risk from their inability to cover contracts in gold. At any given time, the amount of gold represented by the paper gold contracts (“open interest”) can exceed the actual amount of physical gold available for delivery, a situation that does not occur in other futures markets.
In other words, the gold and silver futures markets are not where people buy and sell gold and silver. These markets are where people speculate on price direction and where hedge funds use gold futures to hedge other bets according to the various mathematical formulas that they use. That bullion prices are determined in this paper, speculative market, and not in real physical markets where people sell and acquire physical bullion, is the reason the bullion banks can drive down the price of gold and silver even though the demand for the physical metal is rising. …
… For the remainder of the commentary:
http://www.paulcraigroberts.org/2015/07/08/big-banks-using-derivatives-s…
end
And now, Bill Holter with an extremely important piece:
(courtesy Bill Holter/Holter-Sinclair collaboration)
An Indication of Global PPT Failure?
Forget about Greece, they didn’t matter yesterday as the NYSE shut down for nearly four hours. Greece does matter and certainly will matter in the weeks to come. Before getting to yesterday’s very peculiar “glitch”, I do want to mention something quite humorous about Greece. Ambrose Evans-Pritchard wrote yesterday the referendum actually backfired! When Tsipras called for the referendum, he apparently expected a “yes” vote (and so did the banksters running the show!). The “plan” was after the yes vote, Tsipras would hang his head and agree to more austerity and thus kick the can one more time.
The “cradle of democracy” threw an absolute monkey wrench in these plans! How can Tsipras now do any deal with the Troika without being lynched in the public square? One can only hope the Greeks stand up for themselves and not allow anyone to sell them out. As I wrote Tuesday, I believe their best bet is to follow in an Icelandic model and default, start issuing the drachma at a fair exchange rate and exit the Eurozone. In this manner they start over and have some very interesting trade opportunities from their east. We will see what they choose and exactly how bad the fallout is shortly!
So what exactly happened yesterday with the New York Stock Exchange? It was certainly a peculiar day because “glitches” turned up everywhere! First it was United Airlines having to ground all of their flights, then both The Wall Street Journal and Zerohedge websites went down. I also heard of many New York subway cars being halted. Then of course the NYSE was halted for four hours. Was all of this “coincidence”? Or was it just “glitchy”? Let’s call this scenario number one of what I believe are three possibilities.
Then we have scenario number two, yesterday was the result of Eastern cyber attacks. The theory goes like this, China is angry because “we topped” and rolled their markets over in a crash like fashion. Maybe yesterday was a test to see what they could actually do? You may pooh pooh this if you will but it only took 15 minutes for the talking heads on CNBC to deny any scenario except the “glitch”. It wasn’t China, it wasn’t a hack, it was not terrorism we were carefully told. I personally have believed in the theory Mr. Putin would release some sort of “truth bomb” calling BS on various false flags, fraudulent dealings and the Western Ponzi scheme in general. I still believe this will come as the U.S. looks surely to square off with Russia/China/(even ROW) at some point in the not to distant future. I believe there is some merit to this scenario but let’s leave it at that for the moment and then revisit at the end.
Scenario number three seems to me to be the meatiest. I spoke to Jim Sinclair while the market was in closure to see what his take was. He immediately said to me; “it’s like if in a casino and everyone starts winning, mysteriously either the lights go out of someone pulls a fire alarm …no more gambling! I think the PPT knew they were going to be overwhelmed, if this were the case and I was the chairman of the NYSE, I would run upstairs and pull the plug out of the wall. …Problem solved …for now!”.
Let’s look at this a little closer. There are without any doubt “plunge protection teams” all over the world. In the U.S., it is by an executive order signed in 1988 by Ronald Reagan. The Bank of Japan has openly said they buy everything including equities. China, who has been having very serious (25%-42% drops in just 16 trading days) market problems. In fact, it could be said China has already crashed. They are making it illegal for institutions to sell, the PBOC has actively been in their markets and everything they have tried has not worked until today. Then we have Europe and Mr. “we’ll do anything necessary” Draghi. Strangely, even though he is a politician, this is something out of his mouth I believe.
That said, I have a question. Is it possible that we are seeing a global PPT failure? You see, the “fires” are no longer compartmentalized, they have jumped borders! It is this “crossing of borders” I believe which is causing problems. For example, if we look at currencies, what happens if both the ECB and the Fed are trying to support their own currencies, aren’t they actually trading against each other? Another thing to ponder is this, if one market closes (yesterday it was China), will this bring “trapped sellers” into the next market that opens and thus on the shoulders of their plunge protection team?
My personal take on these three differing scenarios is the truth lies as a combination of numbers two and three, I guess I’m just too cynical to fall for the “glitch excuse”. Whether you want to believe it or not, we (the U.S.) are at war with the East and desperately hanging on to the dollar remaining as king. This has been going on for years, only now it is becoming obvious. Would one country try to electronically harm another country financially? Is the Pope Catholic? I do believe there is something to yesterday being either a trial run or a test, maybe even a “shot across the bow”. I also believe the plug was pulled on purpose. Maybe it had to be or was forced, I do not know. I do believe we are watching as the various PPT’s fail to hold the lines. I’m pretty sure we will find the answers out and shortly. The real answers may not be pleasant!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome bholter@hotmail.com
end
And now your overnight trading in bourses, currencies, and interest rates from Europe and Asia:
1 Chinese yuan vs USA dollar/yuan strengthens to 6.2087/Shanghai bourse green and Hang Sang: green
2 Nikkei closed up by 117.86 points or 0.60%
3. Europe stocks all in the green /USA dollar index up to 96.51/Euro down to 1.1032
3b Japan 10 year bond yield: rises to 45% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 121.39
3c Nikkei still just above 20,000
3d USA/Yen rate now just below the 122 barrier this morning
3e WTI 52.47 and Brent: 57.79
3f Gold down /Yen up
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 up for WTI and up for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to .69 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rise to 57.67%/Greek stocks this morning: stock exchange closed again/ still expect continual bank runs on Greek banks /Greek default to the IMF in full force/
3j Greek 10 year bond yield rises to: 19.29%
3k Gold at 1162.50 dollars/silver $15.35
3l USA vs Russian rouble; (Russian rouble up 3/5 in roubles/dollar in value) 56.81,
3m oil into the 52 dollar handle for WTI and 57 handle for Brent/Saudi Arabia increases production to drive out competition.
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/China may be forced to do QE!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9505 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0483 well below the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p Britain’s serious fraud squad investigating the Bank of England/
3r the 3 year German bund remains in negative territory with the 10 year moving closer to negativity at +.63%
3s The ELA is frozen now at 88.6 billion euros. The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.
4. USA 10 year treasury bond at 2.24% early this morning. Thirty year rate above 3% at 3.03% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
China Soars Most Since 2009 After Government Threatens Short Sellers With Arrest, Global Stocks Surge
Here is a brief sample of some of the measures the Chinese government and the PBOC have unleashed in just the past ten days to prop up the crashing market include:
a ban on major shareholders, corporate executives, directors from selling stock for 6 months
freezing more than half (1400 at last count per Bloomberg) of the listed companies from trading,
blocking fund redemptions, forcing companies to invest in the market,
halting IPOs,
reducing equity transaction fees,
providing daily bailouts to the margin lending authority,
reducing margin requirements,
boosting buybacks
endless propaganda by Beijing Bob.
The measures are summarized below.
But it wasn’t until last night’s first official threat to “malicious” (short) sellers that they face charges (i.e., arrest), as Xinhua reported yesterday:
[Ministry of Public Security in conjunction with the recent Commission investigation of malicious short stock and stock index clues ] correspondent was informed on the 9th morning , Vice Minister of Public Security Meng Qingfeng led to the Commission , in conjunction with the recent Commissioninvestigation of malicious short stock and stock index clues show regulatory authorities to the operation of heavy combat illegal activities.
… that the wall of Chinese intervention finally worked. For now.
And since this is all about one thing, the stock, market, it is worth noting that the Shanghai Composite Index had dropped as much as 3.8% to a 4 month low before the news that the cops were going to arrest anyone who used a wrong discount rate in their DCF, when everything suddenly took off, and the SHCOMP closed a “Dramamine required” 5.8% higher, the biggest daily increase since March 2009!
“As China beefs up its efforts to rescue the market, with even the public security ministry involved, market sentiment is recovering slightly from a panicky stage earlier,” Shenyin Wanguo analyst Qian Qimin says by phone
This is how some other Chinese markets fared: CSI 300 +6.4% led by industrials, consumer staples; the Shenzhen Composite Index +3.8%; all ChiNext shrs trading today were limit up a day after virtually the entire market was locked limit down.
The best and briefest summary comes from China Southern Fund Management chief strategist Yang Delong, who said that the government efforts “hit the right spot.” Well, yes, when you threaten to arrest sellers, it does tend to have a short-term effect. The only escalation from there is arresting anyone who doesn’t buy which in turn would promptly lead to this.
Elsehwere in Asia, the Nikkei 225 closed +0.60% after tumbling 3.2% earlier in the day, as the Chinese “anti-selling measures” spread and “inspired’ confidence, with the ASX 200 unchanged and weighed by materials as iron fell to a record low. Across the board equities did pull off worst levels as gains in Chinese stocks sparked an improvement in confidence, which also weighed on JGBs, with losses exacerbated by a weak 30-year JGB auction which drew the lowest b/c since 2004.
The Chinese gain promptly rippled through Europe as well, which now appears more focused on Asia than on Greece, and European shares rose most since July 1. Ironically, for all the talk of an imminent deal, overnight none other than famous Grexitologist, Citi’s Willem Buiter allowed us a 2011 deja vu when he joined JPM in saying that Greece’s exit from Eurozone is now the “base case” and most likely outcome, either via short-term exit in next few months or over next 1-3 years.
Curiously the Greek bond market seems to agree as can be seen by the price action in Greek 2 year bonds.
In any event the euphoria over Chinese central planners threatening with bodily harm in what is clearly one of the last steps before all control is lost, is enough to offset the unpleasant encroaching of reality. One wonders just what measures the US itself will take when faced with China’s bursting-bubble predicament.
For now, however, after US stocks tumbled yesterday just before the NYSE “unexpectedly” closed for nearly 4 hours a day after 70% of Chinese stocks were frozen from trading, futures right now are set for a 1% open.
Somehow we doubt the NYSE will break today.
Newsflow has been relatively light in today’s European session, thereby seeing equities (Euro Stoxx: 1.8%) take their lead from their Asian counterparts. In terms of US specific equity news, yesterday saw Alcoa officially kick off earning season after reporting Q2 Adj. EPS USD 0.19 vs. Exp. USD 0.22 and Q2 revenue USD 5.90bIn vs. Exp. USD 5.80bIn. Looking ahead to today, notable US earnings include Pepsi and Walgreens. With the state of play in Greece seeming to be on hold ahead of the weekend, Bunds have been relatively unmoved this morning, with fixed income markets seeing little price action and today’s only notable auction a US USD 13bIn 30yr bond auction.
FX markets have seen a reversal of yesterday’s moves in key pairs, with EUR and JPY weaker this morning, seeing USD/JPY retake 121.00 to the upside in an unwinding of safe haven flows after Chinese equities recovered some of yesterday’s losses. The USD has also seen a reversal of yesterday’s losses to trade higher this morning by around 0.2%.
Improved Chinese sentiment boosted the commodity complex with WTI (+0.73), Brent Crude (+0.59), with metals also benefitting from the improved Chinese sentiment to rebound from recent weakness. This gold trading higher (+0.2%) as it bounced back from March 17th lows and copper (+0.9%) also benefitting after reaching its lowest level since 2009 yesterday. UBS have revised its avg. platinum price forecast for 2015 to USD 1160 /oz vs Prey. USD 1280 /oz and its Palladium avg. price forecast to USD 770 /oz vs Prey. USD850 /oz. UBS also lowered their long term Platinum price forecast to USD 1600 (RTRS).
Looking ahead, the rest of the day sees the BoE rate decision, US weekly jobs numbers and comments from Fed’s Kocherlakota, Brainard and George.
In summary: European shares extend gains, rise most since July 1, with autos, financials outperforming; U.S. equity futures rise along with gold, oil, dollar. Asian stocks rise most since June 23. Iberian, Italian, French stocks lead outperformers among European bourses; yields on Dutch, German, Greek, U.K. 10-yr bonds rise; Spanish, Portuguese yields fall. U.S. jobless claims, continuing claims, Bloomberg consumer comfort due later
Market Wrap
S&P 500 futures up 1% to 2059.3
Stoxx 600 up 1.5% to 378.6
US 10Yr yield up 5bps to 2.24%
German 10Yr yield up 2bps to 0.69%
MSCI Asia Pacific up 0.7% to 140.7
Gold spot up 0.3% to $1162.4/oz
Eurostoxx 50 +1.7%, FTSE 100 +1.1%, CAC 40 +1.7%, DAX +1.6%, IBEX +2%, FTSEMIB +1.7%, SMI +1%
Asian stocks rise with the Shanghai Composite outperforming; MSCI Asia Pacific up 0.7% to 140.7
Nikkei 225 up 0.6%, Hang Seng up 3.7%, Kospi up 0.6%, Shanghai Composite up 5.8%, ASX up 0%, Sensex down 0.4%
Euro down 0.39% to $1.1034
Dollar Index up 0.23% to 96.51
Italian 10Yr yield down 5bps to 2.17%
Spanish 10Yr yield down 6bps to 2.17%
French 10Yr yield down 0bps to 1.12%
S&P GSCI Index up 0.8% to 412.6
Brent Futures up 1.2% to $57.7/bbl, WTI Futures up 1.5% to $52.4/bbl
LME 3m Copper up 1% to $5577.5/MT
LME 3m Nickel up 2.6% to $11240/MT
Wheat futures up 0.6% to 581 USd/bu
Bulletin headline summary from RanSquawk and Bloomberg:
Chinese markets staged a relief rally to see the Shanghai Composite post its largest one day gain since 2009 following a slew of additional measures by Chinese officials to curb losses coupled with encouraging CPI data.
Improved Chinese sentiment boosts the commodity complex, with gold and copper coming off their multi month lows.
Today sees the BoE rate decision, US weekly job numbers, EIA NatGas Storage change, comments
from Fed’s Kocherlakota, Brainard and George as well as earnings from Pepsi and Walgreens.
Treasuries decline amid gains in stocks and commodities, Greece headlines; week’s supply concludes with $13b 30Y bonds, WI 3.020% vs 3.138% in June.
The selloff in China’s stock markets halted after regulators late Wednesday banned major stockholders from selling stakes; more than half the country’s listed companies have been suspended from trading
Templeton Emerging Markets Group called the stock sale ban an act of “desperation”; UBS Wealth Management labels it “extreme”; Wells Fargo Funds Management says it just “postpones the inevitable”
China’s securities regulator suspended reviews of IPOs and other share sales, people familiar with the matter said
With a cacophony of voices predicting a possible exit of Greece from the currency, Tsipras has until Thursday midnight to present an economic plan that includes spending cuts in exchange for a new bailout
Merkel is doubtful he’ll deliver, and is now willing to accept a Greek exit, according to two govt officals familiar with her strategy who asked not to be named
Draghi suggested the Greek debt crisis is getting increasingly hard to fix, speaking hours before the ECB maintained its freeze on extra aid for the country’s banks
An agreement to curb Iran’s nuclear program could create a bonanza for U.S. defense contractors who already are benefiting as the Obama administration tries to assuage Israeli and Gulf Arab concerns by cutting deals for more than $6b in military hardware
Sovereign 10Y bond yields mostly higher; Greek 10Y yields 19.439%. Asian stocks mostly higher. European stocks and U.S. equity-index futures fall. Crude oil, gold and copper higher
DB’s Jim Reid completes the overnight event summary
If anyone was under any illusions that we’re living in free global markets then China’s recent policy actions should be a reminder that we’re not and haven’t really been for several years. Global financial markets are not really operating under capitalism but then again I’m not really sure I know what you’d call the system we are currently living under.
A simplistic analysis of the problems over the last couple of decades is that bubbles are repeatedly being inflated by policy action and then never allowed to deflate properly when they turn. Whether that be a huge Greek government debt pile that the authorities have been too scared to see default over the last few years or whether that be a Chinese equity market in apparent free-fall, there is a link. These and numerous other examples in recent years leaves huge sub-optimal resource allocation issues throughout the global economy and a need for more and more stimulus to retain stability. To be fair China is only doing what the West did a few years ago when they banned the shorting of things like various company equities and sovereign CDS. However China does seem to be raising the bar in terms of intervention techniques. One such example came yesterday after the China close with the news that the China Securities Regulatory Commission has banned major shareholders (with stakes of more than 5%), corporate executive and directors from selling stakes in listed companies for six months. A truly breathtaking initiative.
For us the China situation is more potentially worrying than Greece for global markets but overall it fits with our view of intervention and high liquidity being needed across the globe for many years to come. Don’t be surprised by more Chinese major policy initiatives over the coming days. If Greece does go towards the exit door, expect the ECB to further aggressively intervene.
Looking at the follow through this morning, there’s been more volatility but there are perhaps some signs of the various measures of the last couple days having an effect with the Shanghai Comp (+1.30%), Shenzhen (+2.93%) and CSI 300 (+2.43%) currently in positive territory. The Shanghai Comp in particular initially opened nearly 4% lower only to then swing to a 2.5% gain in the space of an hour before then settling down. According to Bloomberg over 1400 companies are still suspended from trading on the mainland exchanges. Data for the region was almost overshadowed with so much of the focus on the equity moves. However, China’s CPI print for June showed a modest +0.2% rise to 1.4% yoy and was slightly above market expectations. PPI continues to remain under pressure however, with the June reading moving even lower to -4.8% yoy (vs. -4.6% expected) from -4.6%.
As we discussed over the last few days, the sell-off in China has also had a knock on impact on parts of the commodity market. Although rebounding slightly yesterday, Copper had struck a 9-year low on Tuesday, falling as much as 18% off the highs of early May. Iron ore has been another casualty of the se