Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1153.30 down $1.90 (comex closing time)
Silver $15.29 down 14 cents.
In the access market 5:15 pm
Gold $1155.65
Silver: $15.36
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 309 notices filed for 1,545,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 245.96.17 tonnes for a loss of 57 tonnes over that period.
In silver, the open interest fell by a considerable 1002 contracts despite the fact that yesterday’s price was down by only 4 cents. The total silver OI continues to remain extremely high, with today’s reading at 186,300 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .931 billion oz or 133% 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. Today again, we had banker shortcovering.
In silver we had 319 notices served upon for 1,545,000 oz.
In gold, the total comex gold OI rests tonight at 454,296 for a gain of 8,268 contracts despite the fact that gold was down $2.50 yesterday. We had 0 notices filed for nil oz today.
We had no change in gold tonnage at the GLD / thus the inventory rests tonight at 709.07 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 no change in inventory at the SLV / Inventory now rests at 327.593 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 1421 contracts to 186,302 despite the fact that silver was up by 12 cents on Friday. We must have had considerable shortcovering by the bankers as they feared something was brewing in the silver arena. The OI for gold fell by another 2,842 contracts down to 446,028 contracts as the price of gold was down by $5.20 on Friday.
(report Harvey)
2 Today, 10 important commentaries on Greece
(zero hedge, BloombergReuters/)
3. One commentary on the agreement with Iran
(zero hedge)
4. Gold trading overnight
(Goldcore/Mark O’Byrne/)
5 Trading from Asia and Europe overnight
(zero hedge)
6. Trading of equities/ New York
(zero hedge)
7. USA stories:
i) Retail sales falter
ii) Business inventories rise/ratio of inventories to sales rise indicates recession
iii) small business optimism falters
iv/ Dave Kranzler on the Puerto Rico mess where Oppenheimer hedge funds have almost 14% of their entire assets in Puerto Rico bonds.
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 8,268 contracts from 446,028 up to 454,296 despite gold being down $2.50 in price yesterday (at the comex close). We are now in the next contract month of July and here the OI remained at 157 contracts. We had 0 notices filed yesterday and thus we gained 0 contracts or an additional nil ounces will stand in this non active delivery month of July. The next big delivery month is August and here the OI fell by 5,308 contracts down to 242,796 as the players start to roll into October or December. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 163,401. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 149,707 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI fell by a large 1,002 contracts from 187,302 down to 186,300 despite the fact that the price of silver was down by only 4 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 rose by 49 contracts up to 439. We had 24 notices served upon yesterday and thus we gained 73 contracts or an additional 365,000 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 33 contracts down to 174. The next major active delivery month is September and here the OI fall by 779 contracts to 126,755. The estimated volume today was very poor at 27,089 contracts (just comex sales during regular business hours). The confirmed volume yesterday (regular plus access market) came in at 42,151 contracts which is excellent in volume. We had 319 notices filed for 1,545,000 oz.
July initial standing
July 14.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
132.17 oz (Scotia,Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
157 contracts 15,700 oz
Total monthly oz gold served (contracts) so far this month
412 contracts(41,200 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
218,100.8 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 2 customer withdrawals
i) Out of Manfra; 32.15 oz (one kilobar)
ii) out of Scotia: 100.021 oz
total customer withdrawal: 132.170 oz
We had 0 customer deposits:
Total customer deposit: 0 ounces
We had 1 adjustment.
i) Out of Delaware: 96.45 oz was adjusted out of the dealer and this landed into the customer account of 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 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 (412) x 100 oz or 41,200 oz , to which we add the difference between the open interest for the front month of July (157) 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 (412) x 100 oz or ounces + {OI for the front month (157) – the number of notices served upon today (0) x 100 oz which equals 56,900 oz standing so far in this month of July (1.7698 tonnes of gold).
we neither gained nor lost any gold ounces standing in this non active delivery month of July..
Total dealer inventory 482,982.338 or 15.022 tonnes
Total gold inventory (dealer and customer) = 7,843,299.130 oz or 243.959 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.96 tonnes for a loss of 57 tonnes over that period.
end
And now for silver
July silver initial standings
July 14 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
1,902,357.07 oz (CNT, Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
482,103.800 oz (Scotia)
No of oz served (contracts)
319 contracts (1,545,000 oz)
No of oz to be served (notices)
120 contracts (600,000 oz)
Total monthly oz silver served (contracts)
3266 contracts (16,330,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
5,443,872.5 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 1 customer deposit:
i) Into Scotia: 482,103.800 oz
total customer deposit: 482,103.800 oz
We had 2 customer withdrawals:
i)Out of CNT: 100,143.970 oz
ii) Out of Scotia: 1,802,213.100 oz
total withdrawals from customer: 1,902,357.07 oz
we had 0 adjustments
Total dealer inventory: 58.96 million oz
Total of all silver inventory (dealer and customer) 180.743 million oz
The total number of notices filed today for the July contract month is represented by 319 contracts for 1,545,000 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 (3266) x 5,000 oz = 16,330,000 oz to which we add the difference between the open interest for the front month of July (439) and the number of notices served upon today (319) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
3266 (notices served so far) + { OI for front month of July (439) -number of notices served upon today (319} x 5000 oz ,= 16,930,000 oz of silver standing for the July contract month.
We gained 365,000 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 14.2015:no change in inventory/gold inventory rests at 709.07 tonnes
July 13.2015: a big inventory gain of 1.49 tonnes/Inventory rests tonight at 709.07 tonnes
July 10/ we had a big withdrawal of 2.07 tonnes of gold from the GLD/Inventory rests this weekend at 707.58 tonnes
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 14 GLD : 709.07 tonnes
end
And now for silver (SLV)
July 14.2015: no change in silver inventory/rests tonight at 327.593 million oz.
July 13./an inventory gain of 1.051 million oz/Inventory rests at 327.593 million oz
july 10/no change in silver inventory at the SLV tonight/inventory 326.542 million oz/
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 14/2015: tonight inventory rests at 327.593 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 9.5 percent to NAV usa funds and Negative 9.7% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.4%
cash .3%
( July 14/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to 1.74%!!!! NAV (July 14/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV falls to – .69% toNAV(July 14/2015
Note: Sprott silver trust back into positive territory at +1.72%
Sprott physical gold trust is back into negative territory at -.69%
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 for your overnight trading in gold and silver plus stories
on gold and silver issues:
(courtesy/Mark O’Byrne/Goldcore)
Greeks Can’t Tap Cash, Gold, Silver In Bank Safety Deposit Boxes
By Mark O’ByrneJuly 14, 20150 Comments
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– Greek capital controls also prevent access to contents of safe deposit boxes
– Restrictions on safe deposit access doesn’t protect banking system unless contents confiscated
– Readers should heed warnings by Marc Faber and Ian Spreadbury of Fidelity
– Important to own assets outside banking system and not in bank safe deposit boxes
– Own physical bullion in private safety deposit boxes and the safest private vaults
Capital controls have been in place in Greece since the start of the month to protect the banks from mass withdrawals by nervous Greeks. They have rightly been concerned about their savings, the collapse of the banking system and the loss of their savings in deposit confiscations or bail-ins.
Many Greeks were also withdrawing their cash because they fear the country might be forced back onto the drachma. However a little known fact is that, Greeks who had prepared for bank runs by withdrawing cash and buying gold and silver bullion and then lodging that bullion and indeed cash into safety deposit boxes have also been caught up in the draconian capital controls.
We have warned about this for many years and warned as recently as April this year that people should avoid using safety deposit boxes in banks.
“Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place”, Nadia Valavani, a Deputy Finance Minister in Greece told local television station according to a Reuters report.
The report (Greeks cannot tap cash in safe deposit boxes under capital controls) was little noticed at it was published on the less trafficked ‘Bonds’ section of Reuters.com on Sunday July 5th at 1:58 pm EDT or 6:58 pm GMT. Sunday afternoon and evening is a time when traders, investors and even eagle eyed news junkies are likely to be taking a well earned break.
The notion that safe deposit boxes – facilities that are used by many precious metals investors and others seeking to safeguard their wealth and valuables – need to come under capital controls to protect against bank runs is a dubious one.
This cash is not in the banking system – its withdrawal would have no negative impact on the system. Its availability to its owner might bring cash into circulation which would benefit the wider community.
The only reason to put access to safe deposit boxes under capital controls – measures which were agreed between the government and the banks – is because the banks and governments wish to retain the option of confiscating the contents of those boxes should the crisis deepen.
The low level war on cash and gold looks set to intensify, and governments look likely to wish to prevent savers and investors taking their cash out of the bank and putting them in safe deposit boxes.
This draconian move may be part of an endeavour to do that.
Safety deposit boxes are a convenient facility to store a small quantity of precious metals. However – as the Greek situation demonstrates – the convenience of ease of access to a local safe deposit box can be offset by the fact that governments and banks can lay claim to their contents at the stroke of a pen.
It would be unwise to view Greece as an exceptional case.
Such complacency is not shared by respected economic historian Marc Faber who recently warned Bloomberg viewers that “Greece is coming to your neighbourhood very soon” because “the world is over-indebted”.
This view has been echoed by many well placed observers from HSBC, Goldman Sachs and Fidelity in recent months. Most recently Fidelity’s Ian Spreadbury made the highly unorthodox recommendation that savers should keep some precious metals and cash “under the mattress”.
What happens next in Greece will determine the fate of the deposit box holders and indeed all citizens in Greece and indeed the wider Eurozone.
The ECB, reneging on its duty of lender of last resort, has put Syriza in an untenable position. It should be remembered that Mario Draghi came to the ECB from Goldman Sachs despite the fact that Goldman were found to have aided the previous Greek government in order to cook the books in order to borrow €1 billion that it could not afford in 2008 and indeed to join the monetary union. Indeed it is alleged the Draghi himself helped cook the books but he denies this and says Goldman did this prior to his joining.
The Telegraph’s AEP writes, “The Greek banks are on the verge of collapse. There is not enough cash left to cover ATM withdrawals of €60 billion each day through this week, or to cover weekly payments of €120 to pensioners and the unemployed – that is the to say, the tiny fraction of the jobless who receive anything at all.”
In the run up to the referendum former Finance Minister Varoufakis had made assurances that the EU had no legal power to expel Greece from the euro – a statement which likely encouraged the electorate to vote “No”. True though this may be, the EU institutions have instead created the conditions whereby Greece either capitulates completely or is forced to leave the euro of its own accord.
The “deal” which Tsipras must now get through parliament in Athens may save the banking system for now – or not, depending on the reaction of the public to the deal – but at great cost to Greece.
Pensions will will be slashed, Value Added Tax (VAT) or sales tax will be imposed on goods and services.
Vital elements of Greece’s infrastructure will be sold off to businesses with close links to the financial institutions who played a key role in creating the crisis – and yet have only benefitted from the repercussions – following the typical IMF template for debt colonialism.
Whatever the outcome with regards to the contents of safe deposit boxes in Greece – while not forgetting that there are far more pressing issues at stake for the people of Greece and Greek society – there is a clear lesson from recent events.
As we consistently warn gold, silver and cash stored within the financial and banking system is in no way secure in the event of a crisis.
Investors should hold some physical gold and silver outside of the banking system in secure and private safe deposit boxfacilities. Precious metals should also be held in jurisdictions with a reputation for respecting private property such as Switzerland, Hong Kong and Singapore.
Must Read Guide: 7 Key Gold Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,153.20, EUR 1,046.89 and GBP 745.27 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,154.95, EUR 1,043.13 and GBP 741.59 per ounce.
Silver in USD – 5 Years
Gold fell $5.10 or 0.44 percent Friday to $1,157.90 an ounce. Silver slipped $0.08 or 0.51 percent to $15.50 an ounce.
Gold in Singapore for immediate delivery ticked lower and gold in Switzerland also weakened despite considerable uncertainty regarding the Greek “deal”.
Gold prices are down for a second day after ending yesterday down half a percent in dollar terms but 1% higher in euro terms as the euro fell on international markets. Support is at $1,155 and that level is holding for now.
Asian shares were mixed and future contracts tracking China’s key stock indexes fell sharply, suggesting a three-day rebound may be losing momentum.
European stocks are lower today on concerns that Tsipras may not be able to get the debt deal over the line in the Greek parliament. Even if he does, his government may not last long thereafter and a subsequent Greek government may elect to honour the will of the Greek people and rip up what most fair minded people see as a very unfair and completely impractical “bail out”.
Euro zone finance ministers will hold a telephone conference to discuss Greek bridge financing tomorrow, Austria’s finance minister said on today. It does not necessarily need a euro group summit to agree on bridge financing, Hans Joerg Schelling said. “If a reasonable proposal comes up, the euro zone finance ministers probably can decide about it in a conference call,” Schelling said.
The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rise 1.5 tonnes on Monday, its first inflow since June 25.
Silver’s underperforming, down 1%, putting it on track for a fourth straight week of losses – if it ends this week in the red, it will have fallen in eight out of the last nine weeks.
Platinum and palladium are also marginally weaker, after both bucked the falling trend in gold and silver yesterday to rise 0.3% and 1.2% respectively.
Breaking News and Research Here
end
(courtesy James Turk/Kingworldnews/Eric King)
Latest bailout of Greece piles debt on unpayable debt, Turk tells KWN
Submitted by cpowell on Tue, 2015-07-14 00:53. Section: Daily Dispatches
8:50p ET Monday, July 13, 2015
Dear Friend of GATA and Gold:
More debt on top of the debt it already can never repay is no solution for Greece, GoldMoney’s James Turk tells King World News tonight, adding that since the latest bailout is all conjured money, it will only devalue the currency of the lenders. The comments made by Turk, a GATA consultant, are excerpted at the KWN Internet site here:
http://kingworldnews.com/greek-tragedy-coming-to-a-bank-near-you-as-tsip…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Lawrence Williams/Mineweb/GATA)
MineWeb’s Lawrence Williams: GATA’s evidence of gold-price suppression is ‘conclusive’
Submitted by cpowell on Tue, 2015-07-14 00:45. Section: Daily Dispatches
8:45p ET Monday, July 13, 2015
Dear Friend of GATA and Gold:
GATA’s evidence that central banks and their bullion bank agents are suppressing the gold price is “conclusive,” MineWeb’s Lawrence Williams writes tonight.
“GATA’s arguments,” Williams writes, “have been treated with scorn by the gold-sector establishment for the most part and by the mainstream media, although its arguments do seem to be being taken a little more seriously by the latter more recently. Scorn and contempt have always been the weapons the establishment has employed to try to suppress unwelcome fact and theory.”
Williams’ commentary is headlined “Gold Price Manipulation: Who Really Calls the Tune?” and it’s posted at MineWeb here:
http://www.mineweb.com/news/gold/gold-price-manipulation-who-really-call…
Williams’ tin-foil hat with first gold nugget cluster is in the mail.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
And now your overnight trading in bourses, currencies, and interest rates from Europe and Asia:
1 Chinese yuan vs USA dollar/yuan weakens to 6.2088/Shanghai bourse red and Hang Sang: red
2 Nikkei closed up by 295.56 points or 1.47%
3. Europe stocks all in the red /USA dollar index down to 96.64/Euro down to 1.1028
3b Japan 10 year bond yield: rises to 47% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.38
3c Nikkei still just above 20,000
3d USA/Yen rate now just above the 123 barrier this morning
3e WTI 51.13 and Brent: 56.78
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
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to .84 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate rises to 27.08%/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: 12.44%
3k Gold at 1154.00 dollars/silver $15.33
3l USA vs Russian rouble; (Russian rouble down 1/4 in roubles/dollar in value) 56.85,
3m oil into the 51 dollar handle for WTI and 56 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 .9455 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0428 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 4 year German bund remains in negative territory with the 10 year moving closer negativity at +.85%
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”. Greece agrees to more austerity even though 79% of the populace are against.
4. USA 10 year treasury bond at 2.44% early this morning. Thirty year rate above 3% at 3.22% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
end
Stocks Get Second Thoughts About Greek Deal: Turn Red From China To Europe
One day after the Greek “pre-deal” was announced and the world breathed a sigh of relief, sending US stocks soaring and Greek halted stocks, well, tumbling (via ETFs and ADRs), things are oddly quiet and in fact quite red in Europe, with futures in the US modestly lower, following both China’s first red close in several days (SHCOMP -1.2%), and a Europe which is hardly looking very euphoric at this moment: it is almost as if the algos finally got to read the fine print of the Greek deal after trading all day on just the headlines.
As Bloomberg’s Richard Breslow summarizes, with so much economically important news coming tomorrow, equity markets opened today trading yesterday’s events. Stock markets from Japan to Australia gapped higher on their open getting in on the rallies in Europe and North America that followed the Greece news. Interestingly, China and India, open late enough to benefit from yesterday’s events, showed a lack of conviction today, mirroring E-Mini, down a bit in a tight range, and Euro Stoxx 50 futures that failed to keep an opening bid and have sagged since
Breslow notes, and we agree, that the most notable market so far today has been Italy, underperforming the rest of Europe with a .7% decline right from the get go. Peripheral bond yields are also underperforming core on the open and EURCHF flirted with 1.0400 after spiking above 1.0500 on the early Greek headlines.
Chinese equities had a bit of a roller coaster of a day with the Shanghai Composite opening down, rallying 1.6% after strong money supply figures only to sag all afternoon before a rally and swoon near the end left the index down 1.2% on the day. Money market rates also increased, with the catalyst for the equity drop according to some was the PBoC injecting less liquidity. More companies have resumed trading, leaving still about one-quarter of mainland listed companies frozen. The market closed before it was announced that China is considering allowing another 1 trillion yuan ($161 billion) of local government debt swaps. Yet another policy to aid the economy. Tomorrow GDP and IP will be released.
Japanese equities opened strong and pretty much stayed that way, with both the Topix and Nikkei 225 closing up about 1.5%. Headlines about Greece dominated the coverage. Tomorrow the BOJ is expected to stay on hold but is likely to downgrade its economic assessment
European equities have sagged from the opening but so far are trading fairly quietly. The DAX remains above its 55-DMA (11,367), which it gapped above yesterday is the pivot level to watch . Italian shares which also rose yesterday have crossed back below their 55-DMA (23,025), and that too is an important pivot to watch. How these two indices perform will be an important clue as to optimism within Europe. U.K. equities are pretty much flat and out performing the rest of Europe, as CPI and factory output prices were pretty benign and on expectation. Tomorrow unemployment will be released.
In FX, GBP (+107 pips) saw a fairly muted reaction to the in-line with expectation CPI data (Y/Y 0.0% vs. Exp. 0.0% Prey. 0.1%), but did strengthen significantly after BoE’s Carney stated that a rate hike is moving closer, while ZEW Survey Expectations (29.7 vs. Exp. 29) failed to see a reaction in EUR, which trended higher from the European open. The USD index heads into the US session lower by around 0.2% weighed on by EUR/USD as the pair trades back above 1.1000. FX markets have seen weakness in commodity currencies including CAD, NOK and RUB as a consequence of lower oil prices due to the Iranian nuclear deal with INR and TRY notable stronger this morning, as the net importers of oil set to benefit from lower prices.Looking ahead, this afternoon sees US retail sales advance, BoE’s Miles and ECB’s Mersch.
In commodities, WTI (USD -1.01) and Brent Crude (USD-1.04) futures traded lower during the first half of the European trading session after it was announced that Iran have come to an agreement regarding their ongoing nuclear deal, meaning eventually sanctions will be listed, with Iran then able to supply more oil to global markets. However, the trade embargo is not to be lifted until countries are satisfied it has fulfilled its obligations and this will take many months, while several major investment banks have estimated it will be 6-12 months before production returns to 2012 levels of around 500kbpd. While the metals complex saw gold trade slightly lower overnight amid a dampening of safe haven demand, while copper traded flat to remain near yesterday’s lows and Dalian iron ore rose by more than 1% in tandem with the recovery in steel rebar prices.
U.S. equity futures are down small and doing very little. Retail sales will be released later today and are expected to soften from last month’s strong upside surprise. Tomorrow will be about Chai Yellen before Congress
In summary: European shares remain lower with the autos and financial services sectors underperforming and food & beverage, health care outperforming. Iran reaches nuclear agreement. Greek Prime Minister Alexis Tsipras faces two days of parliamentary maneuvering in Athens to secure approval for bailout package. U.K. June inflation rate falls to zero matching median est. Carney says time for BOE rate increase is moving closer. German ZEW above estimates. China said to consider extra 1 trillion yuan debt-swap quota. Singapore 2Q GDP below estimates. The Italian and Spanish markets are the worst-performing larger bourses, the Swiss the best. The euro is stronger against the dollar. Greek 10yr bond yields rise; U.K. yields increase. Commodities decline, with WTI crude, Brent crude underperforming and soybeans outperforming. U.S. small business optimism, retail sales, import price index, business inventories due later.
Market Wrap
S&P 500 futures down 0.1% to 2093
Stoxx 600 down 0.3% to 395.2
US 10Yr yield down 1bps to 2.45%
German 10Yr yield up 1bps to 0.87%
MSCI Asia Pacific up 0.7% to 143.4
Gold spot down 0.3% to $1154.3/oz
3 out of 19 Stoxx 600 sectors rise; food & beverage, health care outperform, autos, financial services underperform
22.2% of Stoxx 600 members gain, 75.3% decline
Eurostoxx 50 -0.5%, FTSE 100 -0.4%, CAC 40 -0.3%, DAX -0.6%, IBEX -0.6%, FTSEMIB -0.9%, SMI +0.1%
Asian stocks rise with the ASX outperforming and the Shanghai Composite underperforming; MSCI Asia Pacific up 0.7% to 143.4
Nikkei 225 up 1.5%, Hang Seng down 0.4%, Kospi down 0.1%, Shanghai Composite down 1.2%, ASX up 1.9%, Sensex down 0.3%
Euro up 0.33% to $1.1038
Dollar Index down 0.39% to 96.58
Italian 10Yr yield up 2bps to 2.13%
Spanish 10Yr yield up 3bps to 2.14%
French 10Yr yield up 0bps to 1.26%
S&P GSCI Index down 1.1% to 409.2
Brent Futures down 1.8% to $56.8/bbl, WTI Futures down 1.9% to $51.2/bbl
LME 3m Copper down 0.9% to $5540.5/MT
LME 3m Nickel down 1.7% to $11550/MT
Wheat futures up 0.5% to 578.8 USd/bu
Bulletin Headlines from RanSquawk and Bloomberg
Iran’s nuclear deal has weighed on energy with WTI residing near the USD 51 handle while commodity currencies have also seen weakness as a result of the deal.
European Equities trade in the red in a paring of yesterday’s sharp gains as the initial positive sentiment regarding the provisional Greek deal dampens.
Looking ahead, this afternoon sees US retail sales advance, earnings from JP Morgan, Johnson & Johnson and Wells Fargo and comments from BoE’s Miles and ECB’s Mersch.
Treasuries gain as Greek PM Tsipras faces Syriza rebellion against austerity measures, Iran and six world powers reach nuclear accord to end sanctions.
Tsipras is set to submit a bill to parliament today containing sales-tax increases and pension cuts that go against his party’s pledges; with dozens of Syriza lawmakers saying they will rebel, Tsipras must rely on opposition support
Greece’s last-ditch bailout requires the country to sell EU50b of assets, an ambition it hasn’t come close to achieving under previous restructuring plans
Tsipras’s government is considering stepping down after Wednesday’s parliamentary vote, Bild Zeitung reports, without saying how it obtained the information
Germany’s Schaeuble proposed Greece could issue debt certificates to pay part of its domestic bills in coming weeks, Handelsblatt reports, citing people who took part in meeting of Eurogroup finance ministers
The nuclear deal with Iran, if approved by the U.S. Congress, promises to end a 12-year standoff that has crippled Iran’s economy and drawn threats of military action from the U.S. and Israel
Accord could eventually reshape global oil markets; Iran’s oil minister says country can increase exports by 500k bbl/day as soon as sanctions lifted, additional 500k/day in following six months
German investor confidence fell to 29.7, from 31.5 in June
Bank of England Governor Mark Carney said officials are edging closer to tightening policy as the economic recovery continues
China’s broadest measure of new credit increased the most since January after the government stepped in to boost provincial finances and the central bank accelerated monetary easing
Sovereign 10Y bond yields mixed; Greek 10Y yield +48bp to 12.496%. Asian stocks mixed, European stocks mostly lower, U.S. equity-index futures flat. Crude oil, gold and copper lower
We conclude with the overnight recap by DB’s Jim Reid
So it seems the Europeans are going to be babysitting Greece for a long period to come and although we always felt a Greek deal was by the smallest margin the most likely option all the way through its fair to say that we didn’t expect anything like the anguish it has taken to get us here or the heavy conditionality. The risk is that the economy will have seen enough damage that problems will arise much earlier in any new deal than had it been struck a few weeks or better still a few months ago. After speaking to George Saravelos last night my interpretation is that we’ve probably removed almost all of the risks over the remainder of the summer but that the autumn could bring fresh elections, ESM squabbling and a wider understanding of the recent damage done to the domestic economy.
Indeed it was 17 consecutive hours of talks which finally saw us arrive at agreement with a set of highly detailed milestones which Greece will now need to deliver upon to secure financing. The overall size of the program has been set at €82-86bn and IMF participation will stay. George notes that there are three major components to the new agreement. The first is the set of detailed milestones which will now need to be passed through Greek parliament, inclusive of VAT and pension reform which will then allow for the national parliamentary approval processes to take place. Different sets of legislation will then need to be delivered by Greece over the next few weeks which in turn will allow for disbursements to be made under the bridge financing arrangements and ESM negotiations to proceed. The second component is a framework of debt relief with the statement referencing the potential for additional official sector debt restructuring through longer debt maturities and interest holidays. This is set to be subject to Greece delivering on its commitments by the conclusion of the first review of the ESM program after September however. The third component is the agreement to the creation of a new privatisation fund in Greece, believed to be as much as €50bn. It’s expected that €12.5bn of this will be used for paying back ESM funds used for bank recap, €12.5bn for growth initiatives and €25bn for debt repayments. George thinks that given the experience of the last few years’ privatisation programme, these targets appear overly optimistic and serve as a signalling mechanism of the government’s commitment to privatisation more so than a meaningful source for bank recap, growth and debt reduction.
So looking at the timeline from now, a Wednesday deadline for the Greek parliament vote has been set. Assuming this passes, focus will be on the ECB and whether they adjust the ELA cap (there was no change in the cap yesterday). Attention will then turn to the European parliamentary approval process with Reuters suggesting the Bundestag is set to vote on Friday. This will allow for formal negotiations to start and discussions of bridge financing which will likely cover July and August obligations before more proposals will need to be passed in September allowing for a full ESM program.
For now though the focus will be on the Greek parliamentary vote. Tsipras’s coalition partners the Independent Greeks, as well as the Left Platform faction of Syriza have already voiced their objection and so it’s looking likely that Tsipras will need to rely on opposition votes. George ultimately believes that a minority government or government of national unity will be the most likely outcome with a major cabinet reshuffle.
So an obvious positive step forward but implementation risks remain high and in the meantime the Greek economy will face significant pressure on the back of fiscal tightening and a bank recap program. It’s also likely that we see a significant change in the political landscape in Greece which could remain a persistent source of risk as the year progresses.
Now let’s try to move on with our lives (a little) as it’s a big week ahead of important US data, the first part of Yellen’s testimony tomorrow, German/UK inflation data today and JP Morgan being the first big US bank to report also today. We’ll come back to this at the end but let’s look at the latest in China and Asia. Equity bourses are mixed in China although it’s been a fairly volatile session with the Shanghai Comp (-0.32%) reversing an earlier gain but the Shenzhen (+2.32%) remaining fairly upbeat. Meanwhile the latest aggregate financing data in the region showed a 1.86tn CNY print, well above the 1.4tn expected and to the highest level since January. Elsewhere there’s a generally positive start in markets in Asia with the Nikkei (+1.69%), ASX (+1.97%) and Kospi (+0.08%) all up. S&P 500 futures are currently unchanged while 10y Treasuries are 1.5bps lower at 2.439%.
Back to yesterday, there was an unsurprisingly better tone in markets on the whole. European equity markets rose although the move up in the Stoxx 600 (+1.97%) was actually smaller than the moves we saw on Thursday and Friday last week. The DAX (+1.49%), CAC (+1.94%), IBEX (+1.70%) and FTSE MIB (+1.00%) also moved higher while the better sentiment filtered over into the US session with the S&P 500 (+1.11%) and Dow (+1.22%) both ending firmer. There were gains also for credit markets as we saw Crossover close 17bps tighter (its tights for the session) and CDX IG move 2bps tighter. In the FX space the Euro initially jumped a fairly modest +0.5% as the agreement headlines broke, only to then sell off as the day wore on as focus quickly shifted to what this meant for Fed rate tightening expectations with the single currency eventually finishing -1.43% versus the Dollar at $1.100. There was a similar turnaround in sovereign bond markets with 10y Bunds initially jumping nearly 9bps in yield to hit 0.984%, only to then rally back and close 4.2bps lower at 0.852% at the close. 10y Treasuries were also choppy, but held on to the move higher in yields to close +5.7bps at 2.455%. A rally across the Greek curve helped support a tightening for Sp