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Gold, Crypto & Tweeting Twitter LIVE Its Saturday Night!!
Junius Maltby


Streamed live 8 hours ago
Even though it cuts out for a moment or two STAY WITH US! Discussing GOLD getting ready to LAUNCH and breakout - looking at the charts, we discuss world debt charts, we look at many things tonight! We also offer some Steem instruction an share some stories on people converting CRYPTO INTO PRECIOUS METAL!! Long night - we end up going on twitter and tweeting a storm. Welcome and thanks to all who joined in!

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Tim Warman: Gold and Cryptos Coming Together
The Daily Coin.org


Published on Jan 6, 2018
Thanks for watching/listening - Share, Subscribe, Listen

Please visit Tim Warman - Fiore Gold - http://fioregold.com
symbol Toronto Venture Exchange - F.V and the OTC FIOGF

Please visit Rory - The Daily Coin - https://thedailycoin.org
 

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2017 Lexicon: Bitcoin
RT


Published on Jan 7, 2018
Bitcoin has hit a financial milestone not reached in almost four centuries. It's taken over the title of "biggest bubble in history" from what was known as ‘Tulip Mania’ in the Netherlands.
 

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Naked Capitalism Links 01/07
https://www.nakedcapitalism.com/2018/01/links-1718.html

TBP - 10 Sunday Reads 01/07
http://ritholtz.com/2018/01/sunday-reads-119/

SA - Market News Live Feed 01/07
https://seekingalpha.com/market-news

AR - Sunday links: an inherent conflict 01/07
https://abnormalreturns.com/2018/01/07/sunday-links-an-inherent-conflict/

TRB - The Fatal Mistake Crypto Investors are Making Now 01/07
http://thereformedbroker.com/2018/01/07/the-fatal-mistake-crypto-investors-are-making-now/

SA - Weighing The Week Ahead: Should We Start Worrying About Inflation? 01/07
https://seekingalpha.com/article/4135741-weighing-week-ahead-start-worrying-inflation
 

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Year of the Octopus, Part 1


-- Published: Sunday, 7 January 2018 | Print | 2 Comments

By John Mauldin

Hunt: Chaotic System
Gavekal Trifecta
Kotok: A Permanent Shift Upward
Krugman: Return to Normalcy
Rosenberg: Pretty Late in the Game
Wien: Speculation Reaches an Extreme
Jet-Lagged in Hong Kong, Sarasota, and Boston

Greetings from Hong Kong, where the locals are preparing to welcome the new year on February 16. While 2018 is the Year of the Dog on the traditional Chinese calendar, on the nontraditional Mauldin calendar we call it the Year of the Octopus. I don’t know exactly what’s coming, but I’m pretty sure it has more than four limbs.


Photo: Getty Images

In last week’s letter, “Economy on a Roll,” I gave you my own fairly upbeat 2018 forecast. I think the US economy and markets will probably hold up well, thanks to tax cuts and deregulation – assuming the Federal Reserve gets no more hawkish than it already has. That assumption may be a stretch, given the Fed’s changing composition, but I’m feeling optimistic anyway.

The one real potential wrench in the works that I did not mention last week was Trump’s actually enacting significant tariffs or tearing up NAFTA, which would cost millions of jobs and cause significant backlash. I am hopeful that mistake won’t be made.

This week and next we’ll look at forecasts from some of my most trusted friends and colleagues. I have so many that our project may even stretch into a third week. Some disagree with my own views – and that’s perfectly fine. I want you to see all sides so you can make good decisions for your own family and portfolio. I’ll let these forecasters speak for themselves in longer quotes than I usually allow, then add my own comments.

Before we start the trek, I want to mention that we’re closing the doors to the Alpha Society soon – on January 15, to be exact. While my instinct is to always keep doors open, the Alpha Society needs to stay exclusive in order to thrive. I talked about it in a two-minute video we recorded over the holidays. Please do me a favor and watch here.

I am looking forward to meeting many of my Alpha Society and VIP members in Hong Kong this Sunday late afternoon/evening. I always find such times to be great learning experiences.

The Three-Body Problem.” Keeping it in mind as I read the various annual reports and year-ahead forecasts has proved quite helpful.

Ben’s wide-ranging essays are hard to summarize or excerpt in a way that captures their breadth and depth. I’ll give you a tiny snippet; but please, set aside some time this month to read the entire article. It is long but worth your while.

The Three-Body Problem is a famous example of a system which has no derivative pattern with any predictive power, no applicable algorithm that a human could discover to adapt successfully and turn basis uncertainty into basis risk. In the lingo, there is no “general closed-form solution” to the Three-Body Problem. (It’s also the title of the best science fiction book I’ve read in the past 20 years, by Cixin Liu. Truly a masterpiece. Life and perspective-changing, in fact, both in its depiction of China and its depiction of the game theory of civilization.)

What is the “problem”? Imagine three massive objects in space … stars, planets, something like that. They’re in the same system, meaning that they can’t entirely escape each other’s gravitational pull. You know the position, mass, speed, and direction of travel for each of the objects. You know how gravity works, so you know precisely how each object is acting on the other two objects. Now predict for me, using a formula, where the objects will be at some point in the future.

Answer: You can’t. In 1887, Henri Poincaré proved that the motion of the three objects, with the exception of a few special starting cases, is non-repeating. This is a chaotic system, meaning that the historical pattern of object positions has ZERO predictive power in figuring out where these objects will be in the future. There is no algorithm that a human can possibly discover to solve this problem. It does not exist.

And that of course is the basic problem we have in economics and investing. When we say that past performance is not indicative of future results, that aphorism is more than just legalese.

I’ve written before about chaos theory and complexity economics. Such ideas can easily discourage us from even thinking about the future. Ben Hunt explains why that’s not the right response. The real answer is to think about the future differently.

With that prelude, let’s move on.

http://www.cumber.com. We stick to that forecast.

(http://www.cumber.com/welcome-to-2018/)

That is considerably more bullish than most 2018 forecasts I’ve seen. Rather than argue with David, I’ll say this: Be ready for anything this year. The future is no more uncertain than it always is, but the consequences of a mistake are growing as the bull market and economic expansion grow long in the tooth. They will end at some point. That means you need a strategy that will let you both participate on the upside and defend yourself when the bear appears. I reiterate that you should be diversifying trading strategies, not just asset classes.

https://www.nytimes.com/2018/01/01/opinion/can-the-economy-keep-calm-and-carry-on.html)

That was from Krugman’s January 1 New York Times column, and his assessment is not far from my own view. I wrote the previous day that the economy is pretty good and will likely remain so until something makes it change course. Like Krugman, I don’t know when that will happen, or exactly how, but I’m sure it will.

The difference between us is that Krugman has made a remarkable turnaround since the imminent doom he predicted right after the election. In fairness, he utters a little mea culpa in this column, admitting that he let his political feelings distort his economic judgment. So I’m glad to welcome his Damascene conversion. I hope it sticks this time.

https://www.blackstone.com/media/press-releases/byron-wien-announces-ten-surprises-for-2018)

Whatever your predisposition, there’s plenty to both like and dislike in there. On #7, I think 10-year Treasury bonds at 4% or more will look like the end of the world to younger folks. It’s been more than a decade since we saw any such thing, and at that point they were falling, not rising. But if he’s correct that CPI pushes over 3%, then bond yields have to rise.

Personally, I think I would take the other side of that bet. I think the yield on the 10-year actually has a chance to fall.

On another note: If Byron is right that “speculation reaches an extreme,” the resulting correction will be a lot deeper than 10%. I don’t think we are there yet and probably won’t reach that point in 2018. But we will get there eventually.

All right, my stack of New Year’s predictions is barely any smaller, but we’ll stop here and pick up again next week.

Jet-Lagged in Hong Kong, Sarasota, and Boston

Shane and I are in Hong Kong, and the first 24 jet-lagged hours have been difficult, to put it mildly. But one soldiers on, and I did get my new shirts. This is the third time in six years I have visited the same tailor, and he was really surprised about the change in my neck size. It’s a full inch larger than it was two years ago. Now I again have shirts that I can button and wear a tie with.

When I get back I will spend one day in Sarasota (in and out) and then a few days in Boston.

I think I will forego making any personal remarks so I can relax a little before the evening’s activities begin. You have a great week.

Your hoping I can sleep tonight analyst,


John Mauldin
subscribers@MauldinEconomics.com

Copyright 2018 John Mauldin. All Rights Reserved.

http://news.goldseek.com/GoldSeek/1515333600.php
 

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farm talk sunday the 7th
Ag Talk In The Raw


Published on Jan 7, 2018
i am here to talk about farming and al that goes with it.
 

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Will Oil Majors Actually Sink Money Into America’s Waters?

January 5, 2018 by Bloomberg



Aerial view of the Auger Tension Leg Platform in the deep-water US Gulf of Mexico in foreground. Noble Jim Thompson drilling rig in background. Photo credit: Royal Dutch Shell


By Liam Denning (Bloomberg Gadfly) — Energy dominance begins at home, and that includes any beachfront property you might have.

The Interior Department unveiled on Thursday a draft proposal for leasing areas of the U.S. outer continental shelf for oil and gas drilling between 2019 and 2024. As five-year plans go, it’s an ambitious one, envisaging leasing on fully 25 out of 26 planning areas — from sea to shining sea, as it were:

ClearView Energy Partners (which provided the data for that chart) points out in a report published on Friday morning that the proposal is probably padded for a purpose. Interior knows the list will get whittled down over time, so it’s starting bigly.

For an oil and gas industry seeking new prospects, that makes the proposal at least partly a mirage.

It’s not that there aren’t potentially good prospects out there. Alaska and the Gulf of Mexico are obviously well-developed in certain areas already. The waters off southern California are also tempting. Meanwhile, using a little Pangaean jigsaw-puzzling, West Africa’s prolific fields suggest there may be similar riches off the Eastern Seaboard.

And it’s not like major oil companies are brimming with exploration prospects right now. The energy crash crushed spending on discoveries, with 2017 seeing the fewest on record, according to Rystad Energy, a consultancy. Another firm, Wood Mackenzie, estimates just $37 billion will be spent on exploration this year, down more than 60 percent from 2015.

There are two big complications when it comes to capitalizing on America’s federal waters, though: politics and time.

Kevin Book of ClearView Energy Partners says one of the biggest potential prizes is the eastern Gulf of Mexico. This is, roughly speaking, the area to the right of an imaginary line drawn down from the border of Alabama and Florida. These waters have the advantage of relative proximity to both the known geology and infrastructure of existing fields elsewhere in the Gulf.

Unfortunately for the oil industry, they also have proximity to Florida. On Thursday, Governor Rick Scott, not widely known as a bleeding heart, joined other state politicians in opposing the proposal. He has good reason to, given he is expected to challenge Democrat Bill Nelson for his Senate seat in November and the two will likely duke it out to see who can portray themselves as the more valiant defender of Florida’s beaches.

Furthermore, in keeping with the padding strategy in Interior’s proposal, the White House may well be willing to cut a deal that keeps the region out of bounds if it helps Scott win an extra Senate seat, given Republicans’ recent loss in Alabama took them to a razor-thin majority in the chamber. It may seem strange to join a set of dots that somehow link President Donald Trump, Steve Bannon, Roy Moore, and the continued absence of rigs in sight of Sarasota, but all I can say is: 2018, baby.

Unlikely Defender of Florida’s Beaches (Maybe)
Much of the East and West Coasts also constitute politically hostile, or at least difficult, territory. In theory, a driller could develop a prospect using a self-contained floating, production, storage and offloading vessel, dispensing with the need to secure state permission for pipelines and terminals to bring oil and gas ashore. In practice, that would be prohibitively expensive, even with oil having crept back above $60 a barrel.

Apart from absolute dollars of expense, it’s the risk premium that would deter a rush into many of these areas. An oil company bidding for a lease off the coast of, say, Georgia, would have to factor in the best part of a decade for exploration and development, even before factoring in the brake of legal challenges. And if a lot can change in just a year or so, then a hell of a lot can change in five or 10 years.

Exacerbating this timing issue is the industry’s own recent experience. As I wrote here, oil majors paid a heavy price for tying up capital in giant, multi-year projects, trashing their returns and threatening their dividends when prices crashed. Added to this, intimations of oil demand’s eventual mortality have crept into strategic thinking. Mega-projects are decidedly unfashionable at this point. Short production schedules — such as in shale — are hot.

You can see that in spending trends. While capital expenditure in North America by both independent exploration and production companies and oil majors fell heavily in 2016, the region accounted for the vast majority of extra spending last year. And most of it came from smaller E&P companies focused on shale:

Offshore spending isn’t dead. Some operators, such as Norway’s Statoil ASA, have worked hard to cut costs and shorten schedules to make projects work at lower prices.

In the Gulf of Mexico, William Turner of Wood Mackenzie authored a recent report forecasting oil and gas production to reach a record of 1.94 million barrels of oil equivalent per day in 2018.

However, he cautions that exploration spending there will remain flat this year and activity will focus on less-ambitious projects, such as those tying back to existing fields and infrastructure. Current energy pricing, and the renewed focus on staying nimble when it comes to deploying capital, are powerful restraints.

And these challenges would be magnified in new, relatively undeveloped areas. Turner points out, for example, that the swiftness of the Gulf Stream, a wide current running parallel to the Eastern Seaboard, could present big challenges to drilling on the Atlantic shelf.

These are the obstacles confronting the administration’s latest push to advance its “energy dominance” mantra, especially in the near term. Similar to what we’ve seen with efforts to revive coal in the face of cheap natural gas the immediate political gratification is obvious. Translating it into reality in the face of an implacable marketplace is altogether different.



This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Liam Denning is a Bloomberg Gadfly columnist covering energy, mining and commodities. He previously was the editor of the Wall Street Journal’s “Heard on the Street” column. Before that, he wrote for the Financial Times’ Lex column. He has also worked as an investment banker and consultant.
© 2018 Bloomberg L.P


Filed Under: Offshore News Tagged With: offshore drilling, offshore oil and gas, president trump

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Iranian Tanker Burns After Collision with Bulk Carrier Off China; 32 Missing

January 7, 2018 by Reuters


The Panama-registered Sanchi tanker is seen ablaze in open waters, after colliding with a Chinese bulk ship, January 7, 2018. Korea Coast Guard/Yonhap via REUTERS

By Meng Meng and Josephine Mason BEIJING, Jan 7 (Reuters) – A tanker carrying Iranian oil and run by the country’s top oil shipping operator was ablaze and spewing cargo into the East China Sea on Sunday after colliding with a Chinese bulk ship, leaving its 32 crew members missing, the Chinese government said.

Thick clouds of dark smoke could be seen billowing out of the Sanchi tanker <c}ks7309492494>, engulfing the vessel as rescue efforts were hampered by bad weather and fire on and around the ship, Mohammad Rastad, head of Iran’s Ports and Maritime Organisation, told Iranian television.</c}ks7309492494>

The Sanchi collided with the CF Crystal <c}bo7309522955> about 160 nautical miles off the coast near Shanghai and the mouth of the Yangtze River Delta on Saturday evening, the Chinese Ministry of Transportation said in a statement.</c}bo7309522955>

The Panama-registered tanker was sailing from Iran to South Korea, carrying 136,000 tonnes of condensate, an ultra light crude. That is equivalent to just under 1 million barrels, worth about $60 million, based on global crude oil prices.

“Sanchi is floating and burning as of now,” the ministry said. “There is an oil slick and we are pushing forward with rescue efforts.”

State media CCTV showed pictures of the tanker ablaze and billowing plumes of thick dark smoke.

It had sent four rescue ships and three cleaning boats to the site by 9 a.m. (0100 GMT) on Sunday, it added.

South Korea also sent a ship and helicopter to help. A Korean Coast Guard official confirmed the tanker was still raging at 1 p.m. (0500 GMT). He declined to be identified as he was not authorised to speak to the media.

The tanker’s 32 crew members were all Iranian nationals except for two Bangladeshi nationals, the Chinese transport ministry said.

“There is a wide perimeter of flames around the vessel because of the spillage and search and rescue efforts are being carried out with difficulty,” Rastad said.

“Unfortunately, up to this moment, there is no news of the crew,” he said.

CF Crystal’s 21 crew members, all Chinese nationals, were rescued and the ship suffered “non-critical” damage, China’s transport ministry said.

It was not immediately clear how much environmental damage had been caused or the volume of oil spilled into the sea.

The last major oil tanker disaster was the sinking of the Prestige off Spain in November 2002, which caused one of Europe’s worst environmental catastrophes.

About 63,000 tonnes of fuel oil leaked into the Atlantic, damaging beaches in France, Spain and Portugal and forcing the closure of Spain’s richest fishing grounds.

MAJOR MARITIME INCIDENT
The incident also marked the first major maritime incident involving an Iranian tanker since the lifting of international sanctions on Iran in January 2016.

There was a collision involving an NITC-operated supertanker in the Singapore Strait in August 2016, but there was no loss of life or pollution.

The Chinese government gave no details of the size of the spill. The Foreign Ministry said in a separate statement that the cause of the incident was under investigation.

Reuters ship tracking data shows Sanchi was built in 2008 and was managed by the National Iranian Tanker Co (NITC). Its registered owner is Bright Shipping Ltd.

It was due to arrive at Daesan in South Korea from Kharg Island in Iran on Sunday, according to Reuters ship tracking.

The Sanchi tanker, leased by Hanwha Total Petrochemical Co Ltd, had “valid foreign insurance”, Iranian oil ministry spokesman Kasra Nouri told Iran’s state television.

Hanwha Total was not immediately available for comment.

Sanchi collided with CF Crystal, registered in Hong Kong, which was carrying 64,000 tonnes of grain from the United States to China’s southern province of Guangdong, the government said.

CF Crystal, which was built in 2011, was due to arrive in China on Jan. 10, according to Reuters ship tracking data.

(Reporting by Meng Meng and Josephine Mason; Additional reporting from Yuna Park and Jane Chung in SEOUL, Jonathan Saul in LONDON and Dubai Newsroom; Editing by Himani Sarkar/ Clarence Fernandez/Susan Fenton)

(c) Copyright Thomson Reuters 2018.

Filed Under: Maritime News Tagged With: sanchi tanker collision

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farm talk monday 8th
Ag Talk In The Raw


Published on Jan 8, 2018
i am here to talk about farming and al that goes with it.
 

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Euphoria Sends Global Stocks To New Record Highs, Korean Won Boosts Dollar With Overnight Fireworks

by Tyler Durden
Mon, 01/08/2018 - 07:02

Every day is "deja vu all over again" for global stock markets which hovered close to all-time highs on Monday as the best start to a year in eight years showed little sign of running out of steam, thanks to "goldilocks" - the combination of global growth and low inflation - which has sent risk appetites into overdrive

For traders returning from holiday, Wall Street last week posted its best start to a year in more than a decade; In yet another case of "bad news is again good news", Friday’s disappointing jobs report, while weaker than expected, encouraged hopes that "brisk growth and low inflation can be sustained this year." The MSCI world index was flat, just below record highs. It has gained 2.5% in the first five trading sessions of the year, its best start since 2010, according to Thomson Reuters data.

After surging every day last week, U.S. equity futures are little changed while European stocks followed Asian markets higher before the start of another earnings season that’s expected to produce strong profit outlooks. The euro and the pound retreated against the dollar which snapped a two-day drop as traders unwound stale short positions, while the euro slid under 1.20 after it failed to find support from data showing speculative long positioning on the common currency reached a record even as Euro-area economic confidence rose to a two-decade high; euro-area bonds and Treasuries were steady, with U.S. two-year yields within sight of psychological 2% level

European stocks climbed for a fourth day, rising to the highest levels since August 2015 and poised for their longest winning streak in two months. Europe's Stoxx Europe 600 Index added 0.2%, following a weekly gain of 2.1%, the best start to a year since 2013 and its biggest weekly advance since April. Miners and carmakers lead gains, with the latter poised for the highest level since May 2015. Novo Nordisk shares pushed marginally higher after they said they had made a bid for Belgian rival Ablynx, whose shares are yet to open but were indicated higher by as much as 45%. Commerzbank and Deutsche Bank are propping up the DAX after Cerberus said they oppose a merger between the two lenders.

Earlier, Asian markets inched towards all-time peaks. Australia's ASX 200 (+0.1%) and KOSPI (+0.4%) were positive ahead of inter-Korean talks which begin tomorrow. The tone for the rest of the Asia-Pac region was mostly reserved throughout the day amid the absence of Japanese participants due to public holiday. Chinese shares continued their strong start to the year, with property developers and energy stocks among the top gainers amid optimism over real estate sales and after the government said it would support mergers in the coal sector. The MSCI China Index climbed 0.7%, taking its advance this year to 6.3%; the gauge is at its highest in 10 years. The Hang Seng Index rises 0.3% for 10th straight gain, its best run since October 2012, while the Hang Seng China Enterprises Index rose +0.2%. The Shanghai Composite Index rose +0.5%; its seventh day of gains and the longest streak since March 2016. Real estate companies accounted for five of top 10 advancers on Hang Seng Index, as China developers listed in H.K. build on their best week since January 2015, while property subgauge outperforms in Shanghai. Of note: the PBoC refrained from liquidity operations for the 11th consecutive day, draining a net 40bn yuan in liquidity, amid reports of tighter shadow banking regulations, as well as PBoC researcher comments regarding scope for higher rates.

In an otherwise quiet FX session, South Korea’s won sharply dropped after the government warned it would take action to stem one-sided moves in the currency, which spurred speculation of central bank intervention.

The KRW climbed against the dollar early Monday before sharply reversing to sink as much as 0.7% as traders speculated that the government was in the market. In response to a request for comment from Bloomberg News on the move, an official at the nation’s FX authority said that South Korea will take steps "sternly" in the case of one-sided moves in the won as the dollar weakens globally. The currency had dropped to an intraday low of 1,069.80 per dollar, reversing an earlier gain to 1,058.80, with traders speculating that the swing was due to central bank intervention.



The won was Asia’s best-performing currency last year, climbing almost 13 percent, as its economy benefited from thriving exports and the central bank raised interest rates for the first time since 2011. The Korean government may find that room to act against further advances will increasingly be limited as talks to revise a free-trade agreement with the U.S. proceeds, according to Schroder Investment Management.

Losses in most other emerging Asian currencies accelerated through the trading day.

As emerging market assets advanced this year, other Asian governments including Thailand and the Philippines have also flagged that they would act to smooth volatility if needed. "Since the start of the year, Asian currencies backed by strong trade and current account surpluses, particularly the TWD, THB and KRW have continued to strengthen," said Heng Koon How, head of markets strategy, global economics and markets research at United Overseas Bank Ltd. "It’s not surprising that local authorities may act to stabilize FX markets in the interim and prevent excessive strength."

The dollar index rose for the first time in three days as the rally in the euro faded and options signaled bets on a weaker common currency according to Bloomberg; support also came from the Fed’s Williams who said in Reuters interview that three rate hikes in 2018 "makes sense". The dollar rose against all G10 peers on Monday, even as gains failed to push the Bloomberg Dollar Spot Index markedly away from a three-month low reached during Asian hours.

The greenback has been pressured since the start of the year amid doubts on the strength of the U.S. economic recovery and its impact on the pace of Federal Reserve policy tightening. Market players are focusing on riskier assets such as stocks, while persistent political worries in the U.S. have also weighed on the greenback.

"The dollar may recover in the short-term due to stale short positions and lack of any meaningful catalysts in other currencies to take the dollar another leg lower," said Viraj Patel, a currency strategist at ING Bank NV. "But this doesn’t mask the structural problems -- we think these political and protectionist risks for the dollar could be more evident ahead of President Trump’s State of the Union speech on Jan. 30." Elsewhere, the Australian dollar reverses gains made since Friday’s U.S. non-farm payroll miss as macro accounts short spot against both kiwi and dollar. The MSCI EM Asia Index gained for a fifth day.

In commodity markets, many commodities paused after the recent run-up in prices, supported by a broadly weak U.S. dollar and the rise in global growth expectations. WTI and Brent crude futures both modestly in the green near 3-year highs that were hit late last week as the rig count last week showed that drillers lowered the number of rigs by 5 in the latest week. Precious metals were slightly lower with silver falling from 6-week highs and gold pulled back 0.1% after rising for its fourth straight week last week.

Attention in the U.S. will turn to the quarterly earnings season, which kicks off this week with the Street expecting solid growth of around 10 percent. Analysts at Bank of America Merrill Lynch said that the global economy had entered 2018 “firing on all cylinders”. “This growth is keeping our quant models bullish and driving earnings revisions to new highs,” they added. “We stay long outside the U.S., with Asia ex-Japan and Nikkei our growth plays, Europe still for yield.”

Meanwhile, in Europe attention is returning to Germany’s struggle to form a government, restraining the single currency. The pound fell and U.K. stocks were flat following weak economic data and reports that Prime Minister Theresa May is considering creating a position for a minister in charge of contingency planning for a no-deal Brexit.

Expected data today includes only US consumer credit. Other things to watch this week include U.S. inflation data; Fed spearkers including San Francisco Fed President John Williams and head of the New York Fed Bill Dudley; China producer and consumer prices data are due Wednesday, while a reading on the country’s money supply is expected in coming days; U.S. firms announcing earnings this week include JPMorgan Chase & Co., Wells Fargo & Co. and BlackRock Inc.

Market Snapshot
  • S&P 500 futures little changed at 2,742.75
  • STOXX Europe 600 up 0.2% to 398.28
  • MSCI Asia Pacific up 0.2% to 179.67
  • MSCi Asia Pacific ex Japan up 0.3% to 589.26
  • Nikkei up 0.9% to 23,714.53
  • Topix up 0.9% to 1,880.34
  • Hang Seng Index up 0.3% to 30,899.53
  • Shanghai Composite up 0.5% to 3,409.48
  • Sensex up 0.6% to 34,370.28
  • Australia S&P/ASX 200 up 0.1% to 6,130.37
  • Kospi up 0.6% to 2,513.28
  • German 10Y yield fell 1.1 bps to 0.428%
  • Euro down 0.3% to $1.1989
  • Italian 10Y yield fell 0.9 bps to 1.737%
  • Spanish 10Y yield fell 2.0 bps to 1.502%
  • Brent futures up 0.3% to $67.80/bbl
  • Gold spot down 0.2% to $1,317.11
  • U.S. Dollar Index up 0.4% to 92.27
Top Overnight News
  • Stephen Bannon’s apology for his comments trashing Donald Trump’s family did little to tamp down the president’s anger at his former chief strategist, as aides describe the president demanding a stark choice from supporters of both men: you are either with Bannon, or with me
  • Angela Merkel’s own party bloc is making her life more difficult as hard-liners seek to force the German chancellor to shift to the right in talks on setting up a government, while she is also seeking a commitment this week from the rival Social Democrats to start formal negotiations on extending their governing alliance

  • U.K. PM Theresa May is starting the new year with a Cabinet reshuffle which will see her move her education and health ministers and create a post for a no-deal Brexit minister, according to newspaper reports
  • Berlusconi could end up holding the aces after Italy’s election
  • Merkel calls for deal as make-or-break government talks begin
  • China’s foreign-currency holdings rose $129 billion in 2017, posting the first annual gain since 2014 amid tighter capital controls, a stronger yuan and resilient economic growth
  • Euro-area January Sentix investor confidence at 32.9 vs 31.1 in December
  • Germany November factory orders fall 0.4% m/m; estimate unchanged m/m
Asia equity markets traded mostly higher as the positive tone seeped through from last Friday’s record performance on Wall Street where all major indexes printed at all time high levels despite the NFP miss, while the DJIA extended above the 25,000 level and posted its best start to the year in over a decade. As such, ASX 200 (+0.1%) and KOSPI (+0.4%) were positive in which with the latter outperformed ahead of inter-Korean talks which begin tomorrow. The tone for the rest of the Asia-Pac region was mostly reserved throughout the day amid the absence of Japanese participants due to public holiday, while Shanghai Comp. (+0.4%) and Hang Seng (-0.1%) were choppy after the PBoC refrained from liquidity operations and amid reports of tighter shadow banking regulations, as well as PBoC researcher comments regarding scope for higher rates. Opining in the China Daily, PBoC Deputy Head of Research Ji Min stated that there is room for a rate increase in the short-term, although he later reversed himself. On Monday, the PBoC skipped open market operations again today citing relatively high bank liquidity.

Top Asian News
  • China’s Currency Reserves Bounced Back Last Year Amid Cash Curbs
  • China Insurer Up $101 Billion Trades Like a Technology Stock
  • Aramco Joins Saudi Companies Boosting Pay After Royal Orders
  • Won Swings to Loss as Korean Government Warns of Stern Steps
  • Won’s Whipsaw May Be a Warning to Emerging-Market Currency Bulls
  • Asia Stocks Extend Rally on Earnings, Korea Talks Outlook
  • Macron Calls for China-EU Relationship to ‘Enter 21st Century’
  • China’s Richest Woman’s Wealth Rose by $2 Billion in 4 Days
European equity markets continued their march higher on Monday with all the major indices trading in positive territory. With little major macro news over the weekend, equity markets continued where they left off in the US where all the major indices closed at record highs. In individual equity news, Novo Nordisk shares pushed marginally higher after they said they had made a bid for Belgian rival Ablynx, whose shares are yet to open but were indicated higher by as much as 45%. Commerzbank and Deutsche Bank are propping up the DAX after Cerberus said they oppose a merger between the two lenders. A firm rebound in core bonds, and the recovery started on Eurex where Germany’s 10 year debt future caught a bid ahead of nearest chart support below 161.50. Market contacts noted light buying amidst a paring of Dax gains and then more of an intraday short squeeze once the opening peak was breached. Bunds have now been up to 161.80 (+21 ticks vs -20 ticks at worst), and last
Friday’s 161.87 session high is next on the radar, although firmer than forecast Eurozone retail sales may stall further upside. Gilts have also reversed early Liffe losses to trade at 124.82 (+17 ticks vs -24 ticks at one stage), awaiting news from UK PM May on her new Cabinet Ministers/posts.

Top European News
  • German Factory Orders Dip But Economy Continues Upward Trend
  • May Emerges Stronger in 2018, Ready to Finally Reshuffle Cabinet
In FX markets, the USD is higher against most of its major counterparts after initially trading lower at the beginning of Asia-Pac trade. The turnaround appeared to be intervention from South Korea who were said to buying dollars to weaken the KRW. GBP/USD trades lower as markets await a cabinet reshuffle from UK PM Theresa May although no major changes are expected. AUD/USD is back down below 0.7850, with the AUD undermined by a marked slowdown in Australia’s construction index and Government forecasts for a sharp 20% decline in iron ore prices this year.

In commodities, WTI and Brent crude futures both trade relatively flat and near 3-year highs that were hit late last week as the rig count last week showed that drillers lowered the number of rigs by 5 in the latest week. Precious metals were slightly lower with silver falling from 6-week highs and gold pulling back after rising for its fourth straight week last week. Markets will be looking out for comments from Fed speakers later in the session on the future path of Fed policy given the its sensitivity to rate hikes. Australia's government sees iron ore prices dropping 20% this year to an average USD 51.50/ton, due to increasing global supply and moderating Chinese demand.

Looking at the day ahead, the November consumer credit numbers are due. The Fed’s Williams and Rosengren speak at an Inflation targeting conference, while the Fed’s Bostic will also speak on monetary policy and the US economic outlook. Elsewhere, France’s President Macron arrives in China today for a three day state visit.

US Event Calendar
  • 3pm: Consumer Credit, est. $18.0b, prior $20.5b
  • 12:40pm: Fed’s Bostic Speaks on Economic Outlook in Atlanta
  • 1:35pm: Fed’s Williams Speaks at Inflation Targeting Conference
  • 4pm: Fed’s Rosengren Speaks at Inflation Targeting Conference
DB's Jim Reid concludes the overnight wrap

If you’ve just come back to work from holidays today, you’ve missed a bit of a melt up in risk assets so far in 2018 with US equities climbing every day this year (S&P500 +2.60% so far) and Europe increasingly getting in on the act (Stoxx +2.10% YTD) after a hesitant start on an initially surging Euro. Basically the year has started as a turbo charged version of 2017 with many of the same themes still present. Data on both sides of the Atlantic has generally been strong but we’re yet to see signs of elevated inflation pressures with Friday’s US average hourly earnings ‘only’ in-line and with a 0.1ppt downward revision to the prior month.

In a relatively quiet week for data the main highlight has to wait until Friday with the latest US CPI report due. Last month’s release was another miss (the 7th in 9 months) with one of the standout contributors a 1.3% fall in apparel prices, the third largest drop in history and the largest since 1998. Our economists expect the change in apparel prices to largely unwind and, as such, core CPI (+0.2% forecast, +0.2% consensus vs. +0.1% previously) should come in relatively healthy as a result. A print in line with DB’s expectation would see YoY core CPI slip two basis points to 1.69% but the six-month annualised change would rise about 17 basis points to 2.08% and the three month annualised change would rise almost twice that to 2.19%, providing some evidence of core inflation firming. With the price of most refined energy products falling in December, headline CPI (+0.1% vs. +0.4% previous) should moderate correspondingly.

A reminder that our credit view is positive in Q1 based on assumption of still subdued inflation and still contained government yields in the early part of the year. However we think both will move higher from around Q2 and exhibit more volatility and will thus create more headwinds for credit from then, albeit at tighter spreads than today’s levels. If we’re wrong on inflation though the carry trade will likely last longer as growth looks very solid at the moment.

Staying with inflation, we also see US PPI data on Thursday and China CPI and PPI on Wednesday. Outside of the data, US Q4 earnings kicks off from Tuesday, with Friday seeing results from Wells Fargo, JP Morgan and Blackrock.

Back to credit, as mentioned at the top, on Friday my team produced the review of 2017 in Euro HY (link) and a report “Capitalising on the CDS-Bond Basis and Term Structure of Credit Spreads” which analyses the CDS-bond basis and curve steepness in EUR and USD corporate credit. Cash bonds have richened to CDS meaningfully since the ECB announced corporate bond purchases in early 2016. Michal Jezek expects this to reverse as they prepare for exit in 2018. At the same time credit curves are too steep and are expected to flatten, particularly in the CDS space as structured credit activity intensifies. The report provides macro credit trade ideas to take advantage of these dislocations and discusses the implications for hedging bond portfolios.

Over in China, December foreign exchange reserves rose for the 11th consecutive month to US$3.14trn (vs. $3.13 trn expected) amid tighter capital controls and resilient economic growth. This morning in Asia, markets are trading modestly higher. The Kospi and China’s CSI 300 are up 0.47% and 0.65% respectively, while the Nikkei is closed for a national holiday. The Hang Seng and China’s RMBUSD are marginally lower as we type with the former looking to extend a winning run to a tenth day.

Moving on now to the various central bankers speak from Friday and over the weekend. On rates, the Fed’s Williams expects unemployment to fall to 3.7% this year, but he is “not worried about inflation suddenly taking off” and suggested that “something like three rate hikes makes sense to me”. Conversely, the Fed’s Harker who is not a FOMC voter this year, believes two rate hikes will be appropriate in 2018 and “want to be slow and steady with any additional rate increases”. Although he sees the flat yield curve “worries so far have been a little inflated and don’t think the situation we’re in now is analogous to the inversion…. (seen) in the 70’s and ‘80’s”.

On potential impacts from the tax cuts, Mr Williams expect it to have a “modest, positive effect” on GDP growth and that the US economy will be in a very positive place two years from now, with “inflation at 2% and around 4% unemployment”.

Similarly, Mr Harker didn’t expect tax cuts to have a large impact on US economic growth. Elsewhere,the White House Chief economist Kevin Hassett noted the administration’s own analysis suggests the tax cuts should not alter the Fed’s projection of three rate hikes in 2018, in part as “if you have supply side stimulus, then it doesn’t put upward pressure on prices”. Finally, the Fed’s Bullard was more optimistic, he noted “there is some possibility that (tax cuts) could light a fire under investment and really drive growth higher…I have some sympathy for this idea...”

Following on, the Bundesbank’s Weidmann reiterated his views that setting a clear end for ECB’s QE bond buying program is justifiable and that “even after the end of net purchases, monetary policy will remain very expansive”. Elsewhere, the Fed’s Mester said US monetary policy should remain focused on price stability and maximum employment and “not be given a third objective of financial stability”.

Now recapping other markets performance from Friday. The S&P rose 0.70% to fresh highs with only two sectors marginally in the red (energy and utilities). European markets were all higher, with the Stoxx 600 up 0.93% back near its 2.5 year high and all sectors in the green. Across the region, gains were by led the DAX (+1.15%) and CAC (+1.05%), while the FTSE was the relative laggard (+0.37%).

Government bonds weakened with core 10y bond yields up c1-2bp (Bunds +0.4bp; Gilts +1.1bp; UST +2.4bp). Across the pond, Canada’s 10y bond yields rose 7.2bp after its December unemployment rate came in below expectations at 5.7% (vs. 6%) and to the lowest since 1976. In currencies, the US dollar index and Sterling gained 0.10% and 0.15% respectively, while the Euro weakened 0.32%. Elsewhere, precious metals softened (Gold -0.26%; Silver -0.04%) and other base metals also fell modestly (Zinc -0.06%; Aluminium -0.76%; Copper -0.98%).

Away from the markets and onto Germany, where Ms Merkel and the SPD have begun exploratory talks on Sunday to form the next coalition government. Rhetoric appears to be cautiously optimistic, with SPD leader Mr Schulz noting “we aren’t laying down any red lines”, while Ms Merkel noted “I’m going into these talks with optimism, though it’s clear to me that a huge amount of work lies ahead”. Both sides want to finish initial talks by Thursday and if there are enough common grounds, formal negotiations could start from late January.

We wrap up with other data releases from Friday. In the US, the macro data was mixed. The December change in nonfarm payrolls was lower than expectations at 148k (vs. 190k), but the six-month average gain of 166k was still slightly ahead of the 12-month average of 161k. The labour market remains tight with the unemployment rate in line at 4.1% and steady mom at a record 17 year low. The growth in average hourly earnings was in line at 2.5% yoy. Elsewhere, the ISM non-mfg composite was below market at 55.9 (vs. 57.6 expected) but still above the long term average, while the headline November factory orders was above market at 1.3% mom (vs. 1.1% expected). Finally, the final reading for November durable and capital goods orders was broadly in line at 1.3% mom and -0.2% mom respectively, while the November trade deficit was slightly wider than expectations at -$50.5bln (vs. - $49.9bln). Factoring in the above, the Atlanta Fed’s GDPNowestimate of 4Q GDP growth is now at 2.7% saar, down from 3.2% previously.

In Europe, the macro data ranged from broadly in line to above market expectations. Firstly on the CPI, the Eurozone’s headline CPI was in line at 1.4% yoy, but core was a tad softer at 0.9% (vs. 1.0%) – steady for the third consecutive month. Across the countries, France’s CPI was in line at 1.3% yoy but Italy was below at 1% yoy (vs. 1.1% expected). Elsewhere, Germany’s November retail sales was materially above market at 4.4% yoy (vs. 2.3% expected), along with France’s December consumer confidence at 105 (vs. 103 expected) – a level exceeded in only two months in the last 15 years. Finally, the Eurozone’s November PPI was also above market at 2.8% yoy (vs. 2.5% expected).

Looking at the day ahead, Germany’s November factory orders will be out as this note hits inboxes. Then we get a range of confidence indicators for the Eurozone, including the January Sentix investor confidence along with the December economic, consumer and business confidence stats. Elsewhere, the Eurozone’s retail sales and the UK’s December Halifax house price index are due. Over in the US, the November consumer credit numbers are also due. Onto other events, the Fed’s Williams and Rosengren speak at an Inflation targeting conference, while the Fed’s Bostic will also speak on monetary policy and the US economic outlook. Elsewhere, France’s President Macron arrives in China today for a three day state visit.

https://www.zerohedge.com/news/2018...time-highs-korean-won-boosts-dollar-overnight
 

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Key Events In The Coming Week: All Eyes On Inflation And Retail Sales

by Tyler Durden
Mon, 01/08/2018 - 09:18


This week's post payrolls data calendar is pretty modest: the US reports consumer credit today, small business optimism tomorrow, but attention is reserved for CPI and retail sales on Friday.



Elsewhere around the globe, SocGen summarizes that we get Eurozone consumer and business confidence data today (it hit a 2 decade high), unemployment tomorrow the ECB ‘account' on Thursday; The UK has a cabinet re-shuffle today, industrial production tomorrow and trade on Wednesday; Chinese CPI data are due Wednesday.

Data and events ahead

In Euro area, the unemployment rate is expected to decline to 8.7% (8.8% prev), and German GDP (Thurs) to rise 2.6% (prev 1.9%). In UK, we forecast Industrial Production on Wed to be1.8% (3.6%, prev) and Manufacturing Production to be 2.8% (3.9% prev). We also have Non-monetary policy's ECB meeting on Tues, ECB Monetary Policy Meeting Accounts and Bank of England Credit Conditions & Bank Liabilities Surveys on Thurs.

In China, we have producer and consumer price index (Wed). Banks expects CPI inflation to inch up to 1.9% yoy in Dec from 1.7% in Nov. PPI inflation has likely eased to 4.8% in Dec from 5.8% in Nov, mainly due to a higher comparison base last year.

In US, core CPI is expected to grow 0.2% mom in Dec, leaving yoy inflation at 1.7% on Fri. Market consensus for retail sales is a 0.40% increase vs the previous release of 0.80%. We will hear from a number of Fed speakers, including NY Fed Pres Dudley on Thurs.



Deutsche Bank's Jim Reid breaks down key events day by day:
  • Monday: November factory orders will be out as this note hits inboxes. Then we get a range of confidence indicators for the Eurozone, including the January Sentix investor confidence along with the December economic, consumer and business confidence stats. Elsewhere, the Eurozone’s retail sales and the UK’s December Halifax house price index are due. Over in the US, the November consumer credit numbers are also due. Onto other events, the Fed’s Williams and Rosengren speak at an Inflation targeting conference, while the Fed’s Bostic will also speak on monetary policy and the US economic outlook. Elsewhere, France’s President Macron arrives in China today for a three day state visit.
  • Tuesday: The November unemployment rate for the Eurozone and Italy are due, along with Germany’s IP. Then the trade and current account balance stats for France and Germany are also due. Over in the US, there is the December NFIB small business optimism index and JOLTS job openings. Onto other events, the Fed’s Kashkari speaks at a moderated panel. Elsewhere, North and South Korean delegates will meet for the first time since 2015.
  • Wednesday: In early morning, China’s December CPI and PPI are due. The November IP and manufacturing production for the UK and France are also due, followed by the UK’s November trade balance. Over in the US, there is the November wholesale inventories along with December stats on exports and imports. Onto other events, the Fed’s Evans discusses the economy and policy outlook. Elsewhere, the US Chamber of Commerce CEO Donohue will deliver his annual address and the South Korean President will host a New Year’s news conference.
  • Thursday: The Eurozone’s November IP and Italy’s retail sales are due, along with the December reading for the Bank of France industrial sentiment index. Over in the US, there is the December PPI as well as the weekly initial jobless and continuing claims. Onto other events, the minutes for the ECB December meeting will be out and the Fed’s Dudley will speak on the US economic outlook. Elsewhere, the BOE will publish its 4Q credit conditions survey and China begins a three-day annual meeting to set the agenda for its anti-corruption work in 2018.
  • Friday: Japan’s outright buying of foreign bonds and China’s December current account balance along with imports and exports stats will be out in early morning. In Europe, Italy’s November IP and the final reading of France’s December CPI are due. Over in the US, there is the December CPI and retail sales along with the November business inventories. Onto other events, the Bundesbank’s Weidmann and the Fed’s Rosengren will speak. Elsewhere, Wells Fargo, JP Morgan and Blackrock will release its results.
Finally, here is Goldman's take on just the US, together with consensus forecasts: The key economic releases next week are CPI and retail sales on Friday. There are several scheduled speaking engagements by Fed officials this week.

Monday, January 8
  • 12:40 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Bostic will give a speech on the U.S. economic outlook and monetary policy to the Rotary Club of Atlanta. Audience and media Q&A is expected.
  • 01:35 PM San Francisco Fed President Williams (FOMC voter) speaks: San Francisco Fed President Williams will participate in a panel discussion on the topic “Should the Fed stick with the 2 percent inflation target or rethink it?” at the Brookings Institution in Washington D.C.
  • 03:00 PM Consumer credit, November (consensus +$17.8bn, last +$20.5bn)
  • 04:00 PM Boston Fed President Rosengren (FOMC non-voter) speaks: Boston Fed President Rosengren will take part in a panel titled “Next steps: Learning from the Bank of Canada” at the Brookings Institution in Washington D.C.
Tuesday, January 9
  • 06:00 AM NFIB small business optimism index, December (consensus 108.3, last 107.5)
  • 09:00 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Kashkari will take part in a moderated Q&A session at Cargill Headquarters in Wayzata, Minnesota. Audience Q&A is expected.
  • 10:00 AM JOLTS job openings, November (last 5,996k)
Wednesday, January 10
  • 08:30 AM Import price index, December (consensus +0.4%, last +0.7%)
  • 09:00 AM Chicago Fed President Evans (FOMC non-voter) speaks: Chicago Fed President Evans will discuss the economic and monetary policy outlook at a breakfast event hosted by the Lake-Forest-Lake Bluff Rotary Club.
  • 09:10 AM Dallas Fed President Kaplan (FOMC non-voter): Dallas Fed President Kaplan will participate in a moderated Q&A session. Audience and media Q&A is expected.10:00 AM Wholesale inventories, November final (consensus +0.7%, last +0.7%)
  • 01:30 PM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President Bullard will give a speech on the US economic outlook at the Missouri Athletic Club in St. Louis.
Thursday, January 11
  • 08:30 AM PPI final demand, December (GS +0.2%, consensus +0.2%, last +0.4%); PPI ex-food and energy, December (GS +0.1%, consensus +0.2%, last +0.3%); PPI ex-food, energy, and trade, December (GS +0.2%, consensus +0.2%, last +0.4%): We estimate a 0.2% increase in headline PPI in December, reflecting an uptick in gasoline prices. We expect a smaller 0.1% increase in in the PPI ex-food, energy, and trade services category. In the November report, the producer price index firmed more than expected, reflecting firmness in core measures, particularly in upstream input prices.
  • 08:30 AM Initial jobless claims, week ended January 6 (GS 250k, consensus 248k, last 250k); Continuing jobless claims, week ended December 30 (consensus 1,920k, last 1,914k): We estimate initial jobless claims were unchanged at 250k in the week ended January 6, reflecting elevated claims in Puerto Rico and a possible boost from end-of-year seasonal volatility. Continuing claims – the number of persons receiving benefits through standard programs –appear to have stabilized after rebounding in November and early December.
  • 02:00 PM Monthly budget statement, December (consensus-$49.0bn, last -$138.5bn)
  • 03:30 PM New York Fed President Dudley (FOMC voter) speaks: New York Fed President Dudley will give a speech on the U.S. economic outlook at an event hosted by the Securities Industry and Financial Markets Association event. Audience and media Q&A is expected.
Friday, January 12
  • 8:30 AM CPI (mom), December (GS +0.17%, consensus +0.2%, last +0.39%); Core CPI (mom), December (GS +0.22%, consensus +0.2%, last +0.12%); CPI (yoy), December (GS +2.11%, consensus +2.1%, last +2.2%); Core CPI (yoy), December (GS +1.71%, consensus +1.7%, last +1.7%): We estimate a 0.22% increase in December core CPI (mom sa), which would leave the year-over-year rate unchanged at +1.7%. Our forecast reflects additional post-hurricane strength in used car prices, a rebound in lodging away from home, and a possible rebound in airfares. On the negative side, we expect imputed utilities costs to continue to weigh on the owners’ equivalent rent category. We estimate a 0.17% increase in headline CPI, reflecting higher food quotes but mixed consumer energy prices in December.
  • 08:30 AM Retail sales, December (GS +0.5%, consensus +0.5%, last +0.8%); Retail sales ex-auto, December (GS +0.4%, consensus +0.3%, last +1.0%); Retail sales ex-auto & gas, December (GS +0.4%, consensus +0.5%, last +0.8%); Core retail sales, December (GS +0.4%, consensus +0.4%, last +0.8%): We estimate core retail sales (ex-autos, gasoline, and building materials) rose at a firm 0.4% pace in December, reflecting indications of a solid end to the holiday shopping season. However, we also expect a partial reversal of the boost from the iPhone launch in last month’s report (iPhone X on November 3). Given the further rise in (sa) gasoline prices and the modest uptick in auto SAAR, we estimate 0.4% and 0.5% respective increases in the ex-auto and headline measures.
  • 10:00 AM Business inventories, November (consensus +0.4%, last -0.1%)
  • 04:15 PM Boston Fed President Rosengren (FOMC non-voter) speaks: Boston Fed President Rosengren will give the keynote speech at a conference on “Money, Models, and Digital Innovation” at the University of California San Diego. Audience Q&A is expected.
Source: SocGen, BofA, Deutsche, Goldman

https://www.zerohedge.com/news/2018-01-08/key-events-coming-week-all-eyes-inflation-and-retail-sales
 

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Silver, Cryptos, and the "Moonshot"
Silver Fortune


Published on Jan 8, 2018
Why is it that some silver and gold buyers are now switching to cryptocurrencies such as Bitcoin, and what it says about their investment philosophy
 

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Ira Epstein's Metals Video 1 8 2018
Ira Epstein


Published on Jan 8, 2018
 

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Ira Epstein's End of the Day Agriculture Video 1 8 2018
Ira Epstein


Published on Jan 8, 2018
 

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Ira Epstein's End of the Day Financial Video 1 8 2018
Ira Epstein


Published on Jan 8, 2018
 

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Gold Seeker Closing Report: Gold and Silver End Slightly Lower
By: Chris Mullen, Gold Seeker Report
Gold fell $5.70 to $1314.80 in Asia before it bounced back to $1321.00 in London and then drifted back lower in morning New York trade, but it then bounced back higher into the close and ended with a loss of just 0.04%. Silver fell to as low as $17.04 and ended with a loss of 0.47%.
 

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Stocks Smash More Records As Global Melt Up Accelerates; BOJ, PBOC Surprise Traders

by Tyler Durden
Tue, 01/09/2018 - 07:02


The global market melt up continues, with Asian and European stocks rising, sending the MSCI all-country world stocks index to another record high as Europe’s main markets shrugged off a tech wobble in Asia and instead cheered Christmas trading updates and more forecast-beating data from Germany.

The MSCI Asia Pacific Index rose 0.3 percent on optimism earnings and economic growth prospects in the region support the stocks trading near record highs. Japan’s Nikkei closed at its highest since November 1991, catching up to the previous session’s gains as markets reopened after a holiday on Monday. Most equity benchmarks in the region rose except those of South Korea, Malaysia, Indonesia and Pakistan, while Taiwan was little changed. Offsetting Japan's euphoria, South Korea’s Kospi erased its gains and slipped 0.1 percent, dragged lower by a 3.1% drop in shares of Samsung Electronics Co. Samsung’s guidance fell short of market expectations despite a forecast for a record fourth-quarter profit, as a strong won and one-off staff bonuses offset surging DRAM prices.

European stocks likewise climbed as traders focused on strong economic data in Germany and a chaotic cabinet reshuffle in the U.K. that may bode ill for its government’s ability to navigate the next stage of Brexit talks. The Stoxx Europe 600 Index was up 0.3%, led by miners and telecommunications stocks. The U.K.’s FTSE 100 Index rises 0.4% as sterling weakens after the cabinet reshuffle. Altice NV is the Stoxx 600’s biggest gainer after the company said it will spin off its U.S. cable-television business

While stocks continue their smooth levitation day after day, there were some fireworks in FX, where first the Yen surged after the BOJ trimmed its purchases of long-dated government bonds, reducing buying of 10-to-25 year debt by 10 billion yen to 190 billion, the first cut in the sector since Dec. 28, 2016, and also scaled back purchases of bonds maturing in more than 25 years by 10 billion yen to 80 billion, stoking speculation it could start to wind down its stimulus policy this year, and resulting in a sharp move higher in the Yen against all its G-10 peers.




Investors sold the USDJPY, with bids on bank platforms hit hard by Tokyo-based leveraged accounts following the BOJ operation, according to Bloomberg. The Japanese currency rose against all of its Group-of-10 peers, while yields for government bonds advanced.

"BOJ’s operation was a trigger for yen gain as it came amid a lack of fresh factors and as people were getting cautious about buying in the 113 levels," said Hiroshi Yanagisawa, chief analyst at FX Prime by GMO in Tokyo. "FX markets had not paid attention to BOJ last year but there may be some expectations that the situation may be changing a bit this year."

As central banks in the U.S. and Europe start to normalize monetary policies, attention is turning to Japan to see if the BOJ will follow suit, even if inflation has yet to reach its 2 percent target. The

... followed by the PBOC announcing it was suspending its countercyclical buffer, which in turn resulted in the biggest drop in the offshore yuan since September.



Both moves took analysts by Surprise: since it adopted its yield-curve-control policy in 2016, the BoJ has occasionally tweaked its buying, but some market players seemed to take Tuesday’s move as a signal. “It shouldn’t be perceived as a monstrous signal of the end of monetary easing but it shows that even the tiniest announcement on a quiet day can have a reaction,” said Societe Generale’s global head of currency strategy Kit Juckes. “And it shows that when they start turning their ship around from this policy, the yen is going to go miles.”

Commenting on the PBOC's move, Goldman's MK Tang said that it would suggest that "the authorities are ready to allow the CNY to be more market-determined... The recent bout of CNY appreciation before today’s move—which had taken the currency’s strength against the CFETS basket close to the Sep ’17 peak—might also have been viewed as too rapid."

The dollar, meanwhile, rose for the second day against most other major currencies.

The euro - which last week approached three-year highs - slipped further away from $1.20 to a 10-day low of $1.1941. That was despite the biggest increase in German industrial data since September 2009 and suggested investors were becoming more cautious after a rally that has pushed “long” euro positions to records.

“I don’t think right now levels substantially above $1.20 are justified,” Reichelt said. “I know the market is very optimistic about the euro, but if you look at the data and the central bank, the ECB (European Central Bank) is still on an expansionary path.” Nevertheless, euro zone bond yields rose, with traders also making room for new supply from three of the bloc’s best-rated countries at relatively attractive levels. The yield on the region’s benchmark, German 10-year debt, climbed to 0.44 percent, well above the mid-December level of 0.30 percent.

In geopolitical developments, a North Korea delegation head said that inter-Korean talks were expected to go well and that he hoped to achieve precious results. Furthermore, it was later reported after discussions finished, that North Korea is to send a delegation of high-ranking officials, athletes and cheering squad to the Olympics. The news comes as the WSJ reported on Monday that US Secretary of State Tillerson and Secretary of Defense Mattis are reportedly trying to hold President Trump back from striking North Korea, while National Security Adviser McMaster is in favour of a "bloody nose" attack.

In rates, US 10Y Treasuries come under pressure, with the yield curve steepening following decline in Japanese government bonds as focus turns to heavy global bond supply due this week. As a result, 10-year TSY yields rose as much as 2.4bps to 2.504%, the highest level since March.



In commodities, the focus remained on oil. U.S. crude prices hit their highest since 2015 on Tuesday amid OPEC-led production cuts and a dip in American drilling. WTI crude futures were at $62.16 a barrel at 0951 GMT - 43 cents, or 0.7 percent, above their last settlement. They earlier matched a May 2015 high of $62.56 a barrel.

Beyond equaling that 2015 high, which was a short intra-day spike, Tuesday’s high was the strongest for WTI since December, 2014, at the start of the oil market slump. “Speculators continued to increase their net long in ICE Brent ... According to exchange data, speculators increased their position by 4,175 lots to leave them with a record net long of 565,459 lots,” ING bank said. Meanwhile, Brent crude futures were at $68.11 a barrel, 33 cents, or 0.5 percent, above their last close. Brent touched $68.27 last week, its highest since May 2015.

Bulletin headline summary from RanSquawk
  • USD is extending recent recovery gains to just over 92.500 amid reports that the PBoC is planning to suspend the counter-cyclical factor in CNY fixes
  • Global European equities are trading higher across the board (Eurostoxx 50 +0.2%) with all sectors (ex-energy) in
  • the green
  • Highlights include APIs, Fed’s Kashkari and supply from the Netherlands, Austria, Germany, UK and the US
Market Snapshot
  • S&P 500 futures unchanged at 2,747.00
  • STOXX Europe 600 up 0.3% to 399.66
  • MSCI Asia up 0.2% to 180.15
  • MSCi Asia ex Japan down 0.1% to 589.21
  • Nikkei up 0.6% to 23,849.99
  • Topix up 0.5% to 1,889.29
  • Hang Seng Index up 0.4% to 31,011.41
  • Shanghai Composite up 0.1% to 3,413.90
  • Sensex up 0.4% to 34,479.65
  • Australia S&P/ASX 200 up 0.09% to 6,135.81
  • Kospi down 0.1% to 2,510.23
  • German 10Y yield rose 0.4 bps to 0.435%
  • Euro down 0.2% to $1.1940
  • Italian 10Y yield fell 2.2 bps to 1.715%
  • Spanish 10Y yield fell 1.8 bps to 1.464%
  • Brent futures up 0.2% to $67.88/bbl
  • Gold spot down 0.4% to $1,314.76
  • U.S. Dollar Index up 0.2% to 92.53
Top Overnight News
  • Negotiators from North Korea and South Korea met on Tuesday for talks aimed at making the Olympics a success, a move that could lead to broader discussions on Kim Jong Un’s nuclear program
  • North Korea to send athletes, officials to Winter Olympics; says wants to resolve Korean peninsula issues through dialogue and negotiations
  • Britain should be granted the “Canada plus plus plus” trade deal that Brexit Secretary David Davis has called for, Italian Economic Development Minister Carlo Calenda said in an interview
  • The Bank of Japan is considering raising its economic growth forecast for the fiscal year beginning in April at its policy meeting ending on Jan. 23, Kyodo news reported, without citing its source
  • European fund managers have cut their 2018 investment research budgets by 20 percent as they scale back the number of providers they use in response to MiFID II, according to a survey by U.S. consulting firm Greenwich Associates
  • Fed’s Bostic says ’two to three’ hikes 2018 base case, need higher inflation to justify 3-4 hikes; caution if yield curve inverting
  • Fed’s Williams says U.S. economy has fully recovered from recession; Rosengren says worth assessing if 2% inflation goal still warranted
  • U.K. December BRC like-for-like retail sales 0.6% vs 0.3% estimate
  • Japan November labor cash earnings 0.9% vs 0.6% estimate
  • Australia November building approvals 11.7% vs -1.3% estimate
Asian equity markets traded mostly higher as the region mirrored the tone seen in US, where all majors posted fresh record highs but the DJIA still snapped its New Year streak. ASX 200 (+0.1%) and Nikkei 225 (+0.6%) were positive in which commodity names led in Australia and the Japanese benchmark outperformed as it played catch up on return from the extended weekend. However, some of the gains in Japan were later pared on tapering concerns after the BoJ reduced its Rinban announcement for longer dated bonds. Elsewhere, KOSPI (-0.1%) was dampened after index-heavyweight Samsung Electronics missed on Q4 preliminary results, while both Hang Seng (+0.4%) and Shanghai Comp. (+0.1%) also gained despite initial cautiousness on further inaction by the PBoC which resulted to a net daily drain of CNY 130bln. Finally, 10yr JGBs were lower by about 15 ticks on concern of BoJ tapering after the Rinban announcement saw a reduction of buying in 10yr-25yr maturities to JPY 190bln from JPY 200bln, as well as the amount in 25yr+ maturities which was cut to JPY 80bln from JPY 90bln. As reported earlier, the Yuan tumbled after China announced it would suspend the counter-cyclical factor in the CNY fix. Earlier,the PBoC skipped open market operations again for the 12th day.

Top Asian News

• Richest Asian Banker Plans a Family Office But Spurns Crypto
• UBS Says Investors Won’t Make Money on Indian Stocks This Year
• Geely Auto Expects Full-Year Profit to Double as Sales Surge
• Ruyi Is Said to Lead Bidding for Swiss Luxury Brand Bally

Global European equities are trading higher across the board (Eurostoxx 50 +0.2%) with all sectors (ex-energy) in the green. Performance is relatively broad-based with some slight outperformance in material names. Focus has also been on the UK supermarket sector after the latest trading update from Morrisons (+2.6%) sent their shares to the top of the FTSE alongside the latest Kantar and Nielsen reports. Elsewhere, focus has also fallen on UK homebuilders with Persimmon shares initially supported by upbeat guidance before upside momentum then dissipated. British American Tobacco shares have been supported after stating that the impact of new US tax legislation would result in a benefit of 6% to FY 2018 EPS. A somewhat belated and limp uptick in Bunds and Gilts given the well-received German and UK supply offerings with the only slight fly in the ointment perhaps coming via the 2027 DMO average yield. The rather muted price moves suggest more supply related topside pressure looming ahead of the start of US refunding and with plenty of EU issuance still to come this week, not to mention corporate deals. US Treasuries also seem to have supply in mind with a steeper bias across the maturity curve, and the 10 year yield just crossing 2.5% again.

Top European News
  • German Industry Output Rebounds on Strong Investment Demand
  • Spanish Emblem of Real-Estate Bust Returns to Market With IPO
  • Sweden Has ‘Crazy’ Surplus as Soaring Tax Revenue Swells Coffers
  • U.K. Scrimps at Department Stores to Fund Holiday Feasts
  • World’s Biggest Covered-Bond Market Tests Extreme Rate Territory
In FX, USD is extending recent recovery gains to just over 92.500, with the Greenback getting a boost from reports that the PBoC is planning to suspend the counter-cyclical factor in CNY fixes, which saw USD/CNH spike to 6.51520 from 6.50340 following the earlier 6.4968 USD/CNY mid-point setting. JPY firmer and the G10 outperformer on reduced Rinban activity overnight which alongside monthly BoJ data suggests a concerted slowdown in JGB buying. USD/JPY down to 112.50 from 113.00+ at one stage, but bids around the low held and broader US Dollar gains now nudging the pair back up towards 113.00 again. EUR is still on the back foot across the board as more long positions are trimmed, with EUR/USD now under 1.1950 and eyeing stops said to be in place at 1.1925. AUD/CAD/NZD all off best levels vs their US counterpart, with AUD/USD above 0.7850 on much better than expected Aussie building approvals data overnight, but now back down under 0.7825, USD/CAD looking firmer over 1.2400 after another dip below the figure (another uptick in oil prices and solid BoC business outlook survey supporting the Loonie) and NZD/USD down around 0.7170 having almost touched 0.7200.

In the commodities complex, WTI and Brent crude prices were initially trading in close proximity to recent highs in a continuation of sentiment yesterday after expectations of a draw of 4.1mln bbls for this week’s inventory data. Furthermore, OPEC officials suggested that the Iran situation was being monitored, and output will only be raised in the event that there is a significant and sustained disruption to output. However, prices then began to be dragged lower after comments from the Iranian energy minister who claimed that OPEC does not want oil prices above USD 60/bbl. In metals markets, the recovery in the USD placed some weight on precious metals (Silver tested USD 17.00/oz to the downside) after a relatively uneventful Asia-Pac session. Elsewhere, Chinese iron ore futures were seen higher overnight as production cutbacks in China continues to sway sentiment. Iran oil minister Zanganeh says OPEC does not want oil prices above USD 60/bbl. Indian Trade Ministry official says comprehensive gold policy will likely be prepared by March and that there is also a likelihood for the recommendation of lower import tax on gold.

Looking at the day ahead, the November unemployment rate for the Eurozone came in (8.7%, Exp. 8.7%, Last 8.8%), along with Germany’s IP (3.4%, Exp. 1.9%, last -1.2%). Over in the US, there is the December NFIB small business optimism index and JOLTS job openings. Onto other events, the Fed’s Kashkari speaks at a moderated panel.

US Event Calendar
  • 6am: NFIB Small Business Optimism, est. 107.8, prior 107.5
  • 10am: JOLTS Job Openings, est. 6,025, prior 5,996
  • 10am: Fed’s Kashkari Speaks on Moderated Panel
DB's Jim Reid concludes the overnight wrap

The eyes of the holders of US equities continue to stream tears of joy at the moment, as yesterday marked the 5th up day out of 5 so far this year for the S&P (+2.77% so far). Since 1928 we’ve only seen the first 5 days of the year to be consecutively up 7 times and this is the first occurrence since 2010. When the first 5 days are up, the average price return for the year is +13.44%, with the low of +2.03% and high of 20.09%. Notably, the longest streak was in 1976 and 1987 when the S&P rose for 7 consecutive days at the start of the year.

Staying in the US, in a quiet week for data leading up to Friday’s CPI, Fed speakers grabbed the headlines yesterday. The Fed’s Bostic seemed dovish and noted “I’m comfortable continuing with a slow removal of policy accommodation”, but “I would caution that doesn’t necessarily mean as many as three or four moves per year”. On inflation, his main concern is that inflation expectations risk becoming anchored below 2% and if this happened, “it would be increasingly difficult for the Fed to hit our 2% target”. In terms of impacts from the tax cuts, he is making a “positive, but modest boost” to his near term GDP growth profile for the coming year, but is treating a more substantial breakout of tax reform related growth as a “upside risk” to his outlook.

Elsewhere, at the Inflation targeting conference, the Fed’s Rosengren said his “own view is that we should be focused on inflation range (rather than the 2% target), with flexibility to move within the range as the optimal inflation rate changes”. He added that a range of 1.5%-3% could provide flexibility and “don’t think most people are going to notice”. The former Fed governor Bernanke also noted there will be “some pretty serious discussions” on monetary policy frameworks over the next 18 months under the new Fed leadership.

Turning to the US’s 4Q17 earnings season kicking off today, our equity strategists expect the S&P’s 4Q EPS growth to rise to near a 6-year high of 14.6% (vs. 3Q: 7.8%), with earnings supported by stronger US and foreign economic growth, a weaker USD, higher oil price and a dissipation of hurricane related losses. On a sector basis, median growth is expected to be led by the energy (+138%), tech (+18.6%) and financial (+16.6%) sectors while growth from industrials is the relative laggard at 4.8%, impacted by GE. Looking to 2018, our team expect the aggregate S&P effective tax rate to fall from 27% to 19%, with all sectors to benefit but the bigger relative beneficiaries are energy, retailing and telco sectors, while the laggards are Pharma, insurance and tech companies. The new 2018 S&P target is 3,000 (c9% above current levels).

Over in Europe, our Economists have published a note posing five key questions for the Euro area in 2018. The first question is whether the euro area’s growth will reach new cyclical highs in 2018? Their answer is “possibly”, as their forecast for CY18 of 2.3% is close to the 2.3%-2.4% that they estimate for CY17, and they see the risks around their forecast as broadly balanced but skewed to the upside in early 2018. Moving on, the team expect 2018 to be a year in which market perceptions of inflation improves, albeit that normalisation may be slow, complicated by rigid inflation regimes in some countries, structural changes and the appreciation of the EUR more recently. Notably, the German wage settlements could influence such perceptions as one third of employees are up for renegotiations in 2018 (in metalwork our team expect a settlement clearly above 3%). Elsewhere, our team also pose questions on: iii) will the ECB be able to engineer a soft landing for financial conditions iv) will “integration” or “exit” be the dominant political theme and v) whether the EU27 and the UK will reach a deal in 2018. For more details, please refer to their report.

This morning in Asia, markets continue to be modestly higher. The Nikkei is up 0.53% after trading resumed post yesterday’s holiday, Hang Seng is up 0.24% while Kospi pared early gains to be down 0.51% as we type. Elsewhere, the North and South Korean delegates have started their first high level talks time since 2015, with discussion topics such as North Korea joining next month’s Winter Olympics.

Now recapping market performance from yesterday. The S&P (+0.17%) and Nasdaq (+0.29%) recovered from earlier losses and edged higher for the fifth consecutive day, while the Dow dipped 0.05%. Within the S&P, modest gains in the utilities and real estate sectors were partly offset by losses in healthcare and financials. European markets were broadly higher, with the Stoxx (+0.27%) and DAX (+0.36%) up modestly, while the FTSE (-0.36%) was weighed down by profit downgrades in the tech and healthcare space.

In government bonds, core 10y European bond yields fell c1bp (Bunds & OATs -0.7bp; Gilts -0.8bp) while treasuries were broadly flat. Peripherals outperformed with Portugal’s 10y yields down 6.7bp, in part due to a reversal of weakness back in the end of 2017. Turning to currencies, the US dollar index gained for the second consecutive day (+0.44%), while Sterling and the Euro weakened 0.04% and 0.52% respectively. In commodities, WTI oil rebounded 0.47% to $61.73/bbl.

Elsewhere, precious metals (Gold +0.06%; Silver -0.55%) and other base metals were mixed, but little changed (Copper +0.04%; Zinc +0.79%; Aluminium -0.47%). Away from markets, an unnamed White House official has told Bloomberg that President Trump is close to making a decision on who to nominate to be the next Vice Chairman for the Fed. Elsewhere, Politico has reported that President Trump’s administration is preparing to unveil an aggressive trade crackdown in the coming weeks that is likely to include new tariffs aimed at countering China and other economic competitors’ alleged unfair trade practices.

In the UK, PM May has reshuffled her cabinet with key posts such as Foreign Secretary Johnson, Brexit Secretary Davis and Chancellor Philip unchanged, but the Education Secretary Justine Greening has quit after the PM has offered her an alternative role – the work and pensions portfolio. Health minister Hunt also persuaded her to change her mind about being moved from his position. Mrs May seemed to start the year with a little bit of momentum but most of the British press has seen yesterday’s reshuffle as shambolic and reflective of her weak political position.

Elsewhere the latest ECB holdings were released yesterday, but there was little relevant info as it only contained a few days of secondary purchases data. Net CSPP purchases last week were €0.3bn and Net PSPP purchases €2.5bn. This left the CSPP/PSPP ratio at 12.4% last week (vs. 11.5% before QE was trimmed in April 2017). We expect more meaningful data from next week when we get the first clues to the PSPP/CSPP taper split post January’s QE cut.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November consumer credit data rose the most in 16 years, with total credit up $28.0bln (vs. $18bln expected), mainly driven by strong credit card spending which rose the most in 12 months. The confidence indicators for the Eurozone were broadly above market. The December economic confidence index was above expectations at 116 (vs. 114.8) and to the highest since October 2000, with the rise due to an improvement in the outlook for industry and services. The January Sentix investor confidence was also above market at 32.9 (vs. 31.3 expected) - slightly below the 10 year high back in November. Elsewhere, the final reading of consumer confidence was in line at 0.5 while the November retail sales print was above expectations at 2.8% yoy (vs 2.4%). Over in Germany, November factor orders fell 0.4% mom (vs. 0% expected), but prior revisions meant the annual growth remained solid at 8.7% yoy (vs 7.8% expected). In the UK, the December Halifax house price index fell for the first time in six months (-0.6% mom vs. +0.2% expected), so annual growth for the past quarter slowed to 2.7% yoy (vs 3.3% expected).

Looking at the day ahead, the November unemployment rate for the Eurozone and Italy are due, along with Germany’s IP. Then the trade and current account balance stats for France and Germany are also due. Over in the US, there is the December NFIB small business optimism index and JOLTS job openings. Onto other events, the Fed’s Kashkari speaks at a moderated panel.

https://www.zerohedge.com/news/2018...al-melt-accelerates-boj-pboc-surprise-traders
 

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Asian Metals Market Update: January-9-2018
By: Chintan Karnani, Insignia Consultants
Gold and silver will see a sell off if they fail to break key resistances of $1327 and $1740. Copper needs to trade over $318.40 for the rest of the week to prevent a sell off. Crude oil looks headed for $65.00. Crypto currency volatility (I will not call it a sell off) should be positive for bullion. Chinese demand will zoom in bullion before their New Year next month.
 

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Supertanker Earnings Fall Victim to OPEC Oil Cuts

January 9, 2018 by Bloomberg


By Firat Kayakiran (Bloomberg) — OPEC’s strategy to end a worldwide crude glut is causing havoc for a vital link in the oil industry’s supply chain: the fleet of supertankers that shuttle fuel between continents.

The ships’ average earnings plunged last year by more than half to levels not seen since 2009 and far below what shipping analysts had been predicting. Now, the producer group’s extension of output cuts throughout 2018 is adding to the downturn.

“These cuts reduced the number of cargoes from the Middle East to Asia significantly at a time when a large amount of newly-built vessels are being delivered,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said in a phone interview.

Oil supertankers, known in the industry as very large crude carriers, or VLCCs, can measure a quarter of a mile in length and haul about 2 million barrels of crude. Since the beginning of 2017, the Organization of Petroleum Exporting Countries and its allies have sought to reduce oil production by almost 1.8 million barrels a day, curbing exports and business for tankers on key trade routes. The group in June plans to revisit the cuts, which currently run through the end of the year.

Crude exports from OPEC’s Persian Gulf members last month dropped below 18 million barrels a day for the first time since August, tanker-tracking data compiled by Bloomberg show. In particular, observed shipments declined to China and Japan from Saudi Arabia, Iran and the United Arab Emirates.

Meanwhile, the global supertanker fleet is expected to expand by 4 percent this year, after growing 5.3 percent last year and 7.4 percent in 2016, Clarkson Research Services Ltd. estimates. Shipping rates have tumbled in recent months, a time of year when they often strengthen.

“If OPEC lifts the output cut in its revision in June, the rates would improve as more oil will be pumped to the market,” said Jakob. “But if it doesn’t then the rates would suffer the whole year.”

Rate Rout
Earnings for the vessels slumped by 57 percent to $17,794 a day on average last year, the lowest since at least 2009, Clarkson data show. Analysts surveyed by Bloomberg had anticipated an average of $25,000 a day for 2017.

Oil prices and tanker earnings often move in opposite directions. In 2013, a year when Brent crude reached almost $120 a barrel, supertankers earned an average $18,621 a day, according to Clarkson. Two years later, amid the oil-price slump, daily returns jumped to an average $64,846.

Since June, Brent futures have soared more than 50 percent to the highest level in more than three years. They traded at $67.92 a barrel as of 1:53 p.m. in London. Earnings on a key supertanker route from the Persian Gulf to Asia plummeted 69 percent in 2017 to end the year at about $16,000 a day, well below the December seasonal average, Baltic Exchange data show.

The rate rout has affected some of the world’s largest tanker companies. Shares of Bermuda-based DHT Holdings Inc. declined to a 2017-low of $3.55 on Dec. 20, though they have risen slightly in recent days. Frontline Ltd.’s shares dropped 39 percent last year.

Fleet growth and inventory drawdowns, which reduce the amount of fuel for export, are “the dominant reason for the weak tanker market we have experienced during the last 12 months,” Robert Hvide Macleod, chief executive officer of Frontline’s management business, said by email. The OPEC cuts have been offset by an increase in trade flows elsewhere, including the Atlantic Basin and from the U.S. to Asia, he said.

Amid the market turbulence, Antwerp-based Euronav NV on Dec. 21 said it would acquire Gener8 Maritime Inc. of New York, creating an independent tanker operator with a fleet of 75 crude tankers, including 44 VLCCs. Euronav declined to comment because the transaction hasn’t been completed yet. A Gener8 Maritime spokesman didn’t respond to a request for comment.

‘Double Whammy’
“The crude tanker market has a double whammy: reduced OPEC exports and too many new ships,” said Burak Cetinok, head of research at Arrow Shipbroking Group in London. “We expect volatility in the rates this year but overall a challenging market.”

In addition, crude is now trading in a structure called backwardation, when near-term contracts are at a premium to later-dated ones, an indication that the market is re-balancing and the attraction of storing oil — particularly at sea — is diminishing.

“That frees the ships tied-up for storing oil, adding to the vessel glut,” Petromatrix’s Jakob said.

The second half of this year may provide a turning point for supertankers as demand for OPEC crude increases and fleet growth slows, according to shipping analyst Eirik Haavaldsen at investment bank Pareto Securities AS.

“The first half will be weak though, and probably weaker than the first half of 2017,” he said.

© 2018 Bloomberg L.P

Filed Under: Maritime News Tagged With: tanker news, tankers

http://gcaptain.com/supertanker-earnings-fall-victim-to-opec-oil-cuts/
 

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Shares in Kodak leap 100 percent after announcing its own cryptocurrency - KodakCoin - which will be used by photographers for trading and licensing online
  • Stock prices for Eastman Kodak Co were up more than 100 percent on Tuesday
  • It is launching a cryptocurrency called 'KODAKCoin' for photographers
  • Kodak systems will allow photographers to register work that they can license and then receive payment
  • The company is the latest to jump on the cryptocurrency bandwagon


Read more: http://www.dailymail.co.uk/news/article-5252747/Kodak-stock-soar-KodakCoin-announcement.html#ixzz53mOsq0Pz
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Treasurys Tumble, Futures Slide On Report China "To Slow Or Halt" Treasury Purchases

by Tyler Durden
Wed, 01/10/2018 - 06:02

The treasuries complex has sold off aggressively across the curve after the following flashing red Bloomberg headline:

- CHINA OFFICIALS ARE SAID TO VIEW TREASURIES AS LESS ATTRACTIVE.
- CHINA OFFICIALS SAID TO RECOMMEND SLOWING OR HALTING TSY BUYING


As Bloomberg reports, "Officials reviewing China’s FX holdings have recommended slowing or halting purchases of US Treasuries, according to people familiar with the matter."

The reasoning given is that the market for US government bonds is becoming less attractive relative to other assets, while trade tensions with the US may provide a reason to slow or stop buying American debt.

As Bloomberg further notes "The people didn’t specify why trade tensions would spur a cutback in Treasuries purchases, though foreign holdings of US securities have sometimes been a geopolitical football in the past."

The news has been interpreted as Beijing wanting to send a signal to the US that it is willing to use financial means to respond to any shifts in US policy on issues such as trade.

Amusingly, with the GOP selling out, at least one deficit hawk remains: China.

The investment strategies discussed in China’s review don’t concern daily purchases and sales, said the people. The officials recommended that China closely watch factors such as the outlook for supply of U.S. government debt, along with political developments including trade disputes between the world’s two biggest economies, when deciding whether to cut some Treasury holdings, the people said.

While there is no official confirmation, this understandably has fixed income spooked. China is the single biggest foreign holder of Treasuries with $1.2 trillion in notional, so this report - if true - has massive implications.



As a consequence, US yields have more than retraced intraday losses, with the 30y trading to 2.92% and the 10y up 2bps. The rest of fixed income has followed through, with a similar spike in European yields.

The kneejerk reaction in fixed income was fast and furious, as over 35,000 10-year futures traded in the one-minute period after the news broke according to Bloomberg, sending 10Y yields as high as 2.59%, the highest since March 2017.




As a reminder, according to Jeff Gundlach once the 10Y hits 2.63%, not only is the selloff set to accelerate, it is also the level where the selling in TSYs finally hits equities too.

The news has also hit U.S. stock-index futures which have tumbled on the news, following declines in Europe.

• E-Mini futures on S&P down 0.4%
• E-Mini futures on Dow Jones down 0.4%
• E-Mini futures on Nasdaq 0.5% lower
• S&P 500 up 0.1% Tuesday, rising for 6th day to a fresh record
• VIX Index trading 1.8% higher

Meanwhile, the USD is selling off across the board following the sharp move lower in Treasuries, and FX markets are now responding. This has been perceived as a USD negative development, and as such the greenback is on sale. The Bloomberg Dollar index, BBDXY extends its drop and falls as much as 0.5% to 1,151.90.

As Bloomberg notes, the dollar initially pared losses on knee-jerk reaction to news that officials reviewing China’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries. However, it then quickly lost momentum and deepened its losses for the day even as 10-year U.S. Treasury yield rose to fresh high at 2.5917% after a report saying China may be looking to change its FX reserves strategy.

EUR/USD snaps a three-day decline, trades near 0.6% higher at 1.2011, jumping almost 70 pips while the CHF has rallied 40 pips, although as some desks note, volumes remain low; liquidity may be exacerbating extent of recent move.

USD/JPY remains offered, drops by as much as 1.2% to 111.30, the most since May 17 and at the lowest level since Nov. 28.



Of course, for the USD, the Fed's normalization process will naturally be affected, as monetary conditions will tighten and as noted above, has seen the USD falling away against all of its counterparts, with the heavily trade weighted EUR/USD rate swiftly back to 1.2000, but contained here for now.

The only asset which has welcomed the news so far, is gold.



Some notes of caution on the news here from Citi's trading desk, which notes that it is not surprising that the knee-jerk reaction has been lower in USD. However, it brings up the following three points:

1. Sourcing on the Bloomberg article is unclear, citing only ‘Officials reviewing China’s foreign-exchange holdings’. Comments to this effect in the past have sometimes come from officials outside the main policymaking circles. As a theme, this is not surprising, but given unclear sourcing, this may not signal imminent shifts in policy.

2. It is hard to shift holdings. Shifts in reserves portfolios are tectonic and this partly comes down to the fact that USD selling by sovereigns reinforces broad downward pressure on the dollar, which can run counter to bigger policy aims. It is clear that the long-term trend is towards reductions of overweight USD positions among sovereigns, but in practice shifts are by several percent over several years. Indeed, the only way to begin a very rapid shift in holdings might be to abandon previous exchange rate policy entirely, but this looks unlikely.

3. Foreigners (overall) have already been paring back on purchases of Treasuries relative to other securities for some time but this has not always been well correlated with USD moves.

USD could extend its losses simply on the basis of the tailwind for losses in the broader macro-environment, but we do not view these comments by Chinese authorities as a convincing catalyst in and of themselves. Indeed, if there is any lasting signal from the comments it is that tensions around trade and financial issues may be ratcheting up and we view this as risk negative. This means that currencies such as EUR may outperform risky currencies should market focus on this issue persist.

https://www.zerohedge.com/news/2018...rt-china-said-slow-or-halt-treasury-purchases
 

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Frontrunning: January 10

by Tyler Durden
Wed, 01/10/2018 - 07:01


  • China May Halt Purchases of U.S. Treasuries (BBG)
  • Berkshire Hathaway Expands Board Size (WSJ)
  • Gundlach Says S&P 500 Will Have Negative Return for 2018 (BBG)
  • Judge blocks Trump move to end DACA (Reuters)
  • Bitcoin Powers Big Returns for a Pair of ETFs (WSJ)
  • U.S. oil hits highest since 2014, worries grow of overheated market (Reuters)
  • With U.S. Aid Cut, Pakistan Drifts Closer to China (WSJ)
  • Taxes, Trading and Bitcoin: What to Watch For in Wall Street’s 2017 Numbers (BBG)
  • Iran could greatly increase uranium enrichment, says spokesman (Reuters)
  • What the Tax Law Will Do to Bank Earnings (WSJ)
  • Breitbart-Bannon Rift Gives Conservative Rivals an Opening (BBG)
  • Catalan parties propose self-exiled former leader as president (Reuters)
  • ‘Bad Brexit’ Would Hurt the U.K. Economy for More Than a Decade (BBG)
  • Marijuana taxes and a surplus expected to boost California budget (Reuters)
  • Michael R. Bloomberg: A Seven-Step Plan for Ending the Opioid Crisis (BBG)
  • Saudi Aramco working to raise cheap loans before IPO - banking sources (Reuters)
  • Traders Aren’t Falling for Crypto Name Changes But Love Them Anyway (BBG)
  • Explosion on Iranian oil tanker forces rescue team to retreat (Reuters)
  • Mohammed bin Salman’s Next Saudi Challenge: Curtailing Ultraconservative Islam (WSJ)


Overnight Media Digest

WSJ

- Apple Inc is facing new questions from government officials in the U.S. and France about its handling of battery-related performance issues on iPhones, a sign that controversy over the problem continues despite the technology giant's apology last month. on.wsj.com/2mlaSdP

- Wag Labs Inc, the startup behind a popular dog-walking smartphone app, inadvertently exposed webpages showing customer information including addresses and lockbox codes that could have enabled thieves to break into homes. on.wsj.com/2miLe9F

- The Trump administration told Florida's governor it won't consider new oil and gas drilling off the state's coast, backtracking on plans to expand offshore drilling all around the U.S. and bowing to pressure from fellow Republicans in the state. on.wsj.com/2ml3XkK

- Boeing Co said it delivered a record 763 jetliners in 2017 and secured net orders for 912 planes, as surging airline traffic continues to fuel a multi year boom for the airline and aerospace industries. on.wsj.com/2ml7IGS

FT

Apple Inc has been forced to pay an extra 136 million pounds tax bill in the United Kingdom after “an extensive audit” by HM Revenue & Customs in the latest crackdown affecting the U.S. tech giant. The payment was shown in the accounts of Apple Europe, one of the group’s UK subsidiaries, which said “this payment of additional tax and interest reflects the company’s increased activity”.

Burger chain Byron said on Tuesday 20 of its 67 outlets across the UK, which employ about 1,800 people, could be closed as part of a sweeping restructuring plan, known as a company voluntary agreement.

Britain’s counter-terrorism police chief Mark Rowley was to step down, in a move that risks complicating the struggle against extremist violence amid a sharp upturn in the threat. Rowley, Assistant Commissioner for Specialist Operations of the Metropolitan Police, was leaving policing to “pursue other challenges,” the Metropolitan Police Service said.

British retailer Marks and Spencer Group Plc, which is battling to turn itself around, said it would cut its technology bill by reducing suppliers and focus its IT business on India’s Tata Consultancy Services Ltd as principal technology partner.

Rio Tinto has accepted an offer for its Dunkerque aluminium smelter, Europe’s biggest producer of the lightweight metal, from acquisitive UK industrialist Sanjeev Gupta. The planned purchase, which could be announced as soon as Wednesday, is the latest in a spree of deals by Gupta.

NYT

- Toyota Motor Corp and Mazda Motor Corp are expected to announce on Wednesday that they have chosen a location in northern Alabama, near Huntsville, for the $1.6 billion car plant the Japanese automakers are planning to build together. nyti.ms/2Fn2PVA

- AT&T Inc walked away from a deal to sell the Huawei smartphone, the Mate 10, to customers in the United States just before the partnership was set to be unveiled, two people familiar with the plans said on Tuesday. nyti.ms/2Erhs9b

- President Trump's longtime lawyer, Michael Cohen, filed a defamation lawsuit on Tuesday in federal court against Fusion GPS, the firm behind a salacious and largely unsubstantiated dossier that purported to lay out how Russia had aided the Trump campaign. nyti.ms/2CXgp3D

Canada

THE GLOBE AND MAIL
** The federal ethics commissioner has dismissed opposition accusations that Bill Morneau benefited from insider trading, but has yet to rule on whether the finance minister was in a conflict of interest when he introduced pension legislation. tgam.ca/2AHT3tV

** Ontario is investigating reports of businesses that have allegedly violated workplace rules after the hike to the minimum wage, and the province's Labour Minister says he's hiring up to 175 new inspectors to enforce the law. tgam.ca/2maiK0R

** Loblaw Companies Ltd offer of free $25 gift cards to make amends for fixing bread prices over 14 years is "a misleading and deceitful public relations" campaign designed to benefit the grocer, says a complainant seeking to launch a class-action lawsuit against the retailer. tgam.ca/2qKRgnV

NATIONAL POST
** In an email, the Department of National Defence told Postmedia the decision to hold off on the $20 million military spending. Construction on the vessels, at Seaspan Shipyards in Vancouver, is supposed to start this year, but the project's timing now appears uncertain. bit.ly/2CWTxSU

Britain

The Times

- The chief executive of Persimmon Plc, Jeff Fairburn, has defended a bonus scheme that is set to pay him more than 110 million pounds ($148.83 million) amid a row that prompted the chairman to resign and sparked condemnation from parliamentarians. bit.ly/2qMQXJn

- Companies are facing skill shortages at critical levels that will restrain economic activity this year unless the issue is addressed, the British Chambers of Commerce has warned. bit.ly/2qNix9q

The Guardian

- British chancellor Philip Hammond and Brexit secretary David Davis have made a direct appeal to German business leaders to help them forge a Brexit deal to secure the future of Britain's financial services. bit.ly/2qJrtg1

- Financial markets are complacent about the risks of sharply higher interest rates that could be triggered by better than expected growth in the global economy this year, the World Bank has warned. bit.ly/2qMNM4z

The Telegraph

- British Taxpayers may be on the hook for tens of millions of pounds a year in extra payments to underperforming rail operator Govia even though older trains will now be used for longer. The National Audit Office said a delay to the delivery of new Class 700 trains for Govia's Thameslink services meant the company would be unlikely to have the amount of new trains which had been planned when the contract was first struck. bit.ly/2qNjtKY

- The energy industry's largest suppliers should be forced to sell off a slice of their customer base to new entrants in order to reset competition in the market, according to a veteran industry regulator Stephen Littlechild. bit.ly/2qNRU43

Sky News

- Tesco Plc was named the best major supermarket performer in the run-up to Christmas as shoppers splashed out an extra 1 billion pounds ($1.35 billion) across the sector, according to industry data from Kantar Worldpanel. bit.ly/2qMANjh

- The European Union has said it is "surprised" Brexit Secretary David Davis complained the bloc is planning for a no-deal Brexit. bit.ly/2qI6RES

The Independent

- UK drivers were hit with a 4 percent price hike on their car insurance premiums in the last three months of 2017 compared with the previous quarter, research by MoneySuperMarket has revealed. ind.pn/2qI8Hpg

https://www.zerohedge.com/news/2018-01-10/frontrunning-january-10
 

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Singapore Uncovers Large Oil Heist at Shell’s Biggest Refinery

January 9, 2018 by Reuters


FILE PHOTO: Storm clouds gather over Shell’s Pulau Bukom oil refinery in Singapore January 30, 2016. REUTERS/Edgar Su/File Photo

By John Geddie and Henning Gloystein SINGAPORE, Jan 9 (Reuters) – Eleven men were charged in a Singapore court on Tuesday in connection with a large-scale oil theft at Shell’s biggest refinery, while police said they were investigating six other men arrested in a weekend raid.

Police in the island-state said on Tuesday they had detained 17 men, whose ages ranged from 30 to 63, and seized millions of dollars in cash and a small tanker during their investigations into theft at the Pulau Bukom industrial site, which sits just south of Singapore’s main island.

Oil refining and shipping have contributed significantly to Singapore’s rising wealth during the past decades. But the case underlines the challenges the industry faces in a region that has become a hotspot for illegal oil trading.

The investigation began after Shell contacted the authorities in August 2017, police said in a news release. After “extensive investigations and probes,” the Criminal Investigation Department, Police Intelligence Department and Police Coast Guard launched a series of simultaneous raids across Singapore, which led to the arrests.

Nine Singaporeans were immediately charged in the theft, of which eight were employees of the Singapore subsidiary of Royal Dutch Shell Plc, court documents showed. Two Vietnamese nationals were charged with receiving stolen goods on a small tanker named Prime South (IMO: 9452804), the documents showed.

Shell confirmed on Tuesday that eight of the 11 men charged were current or former employees at Shell Eastern Petroleum (Pte) Ltd.

Shipping data from Thomson Reuters Eikon showed the Prime South had been shipping fuel between Ho Chi Minh City, Vietnam, and Singapore for the past 30 days.

GRANDER SCHEME?
Tuesday’s cases could be just the first insight into a grander scheme.

The charges seen so far allege three incidents of gasoil theft: on Nov. 21, 2017, of more than 2,322 tonnes valued at S$1.277 million ($958,564.78); and on Jan. 5 and 7 this year of a combined 2,062 tonnes of gasoil, valued at S$1.126 million.

The Vietnamese nationals were charged with receiving gasoil in the early evening hours of Jan. 7, at wharf 5 at the heart of Shell’s operations on Bukom island, the documents show.

Meanwhile, police say the other six men arrested remain under investigation.

During raids on Sunday, police said they seized S$3.05 million in cash and the 12,000-deadweight-tonne tanker. They have also frozen suspects’ bank accounts.

Shell said on Tuesday it anticipated “a short delay” in its supply operations at Bukom, its largest wholly owned refinery in the world in terms of crude distillation capacity. It declined to say the total amount of oil stolen.

It is the second high-profile case of wrongdoing at companies in Singapore to hit headlines in recent weeks, after Keppel Corporation Ltd’s rig-building business agreed in December to pay more than $422 million to resolve charges it bribed Brazilian officials.

OIL TRADING HUB
Singapore is one of the world’s most important oil trading hubs, with much of the Middle East’s crude oil passing through Singapore before being delivered to the huge consumers in China, Japan and South Korea.

Singapore is also Southeast Asia’s main refinery hub and the world’s biggest marine refuelling stop.

Shell is one of the biggest and longest established foreign investors in Singapore. Its oil refinery on Bukom island can process 500,000 barrels per day.

Illicit oil trading is widespread in Southeast Asia. In some cases, oil has been illegally siphoned from storage tanks, but there have also been thefts at sea, including whole ships being seized for the oil cargo.

The Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) says that siphoning of fuel and oil at sea in Asia, including through armed robbery and piracy, saw sharp increases between 2011 and 2015.

There has been a modest decline since then, although the organisation said in a quarterly report that oil theft was still “of concern,” especially in the South China Sea, off the east coast of Malaysia.

The stolen fuel is generally sold across Southeast Asia, offloaded directly into trucks or tanks at small harbours away from oil terminals.

($1 = 1.3322 Singapore dollars)

(Reporting by John Geddie and Henning Gloystein; Additional reporting by Florence Tan and Fathin Ungku; Editing by Gerry Doyle)

(c) Copyright Thomson Reuters 2018.

Filed Under: Maritime News Tagged With: shell, Singapore

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Yemen’s Houthis Threaten to Block Red Sea Shipping Lane

January 9, 2018 by Reuters


Photo: By Tomasz Kozal / Shutterstock


By Aziz El Yaakoubi DUBAI, Jan 9 (Reuters) – Yemen’s armed Houthi movement threatened to block the strategic Red Sea shipping lane if the Saudi-led coalition it is fighting keeps pushing towards the port of Hodeidah it controls, the Houthi-run SABA news agency reported.

Yemen lies beside the southern mouth of the Red Sea, one of the most important trade routes in the world for oil tankers, which pass near Yemen’s shores while heading from the Middle East through the Suez Canal to Europe.

While SABA gave no details on how Houthis could carry out any such move, the Bab al-Mandab strait, where the Red Sea meets the Gulf of Aden in the Arabian Sea, is only 20 km (12 mile) wide, making hundreds of ships potentially an easy target.

“If the aggressors keep pushing towards Hodeidah and if the political solution hits wall, there are some strategic choices that will be taken as a no return point, including blocking the international navigation in the Red Sea,” Houthis’ Ansarullah political council chief, Saleh al-Samad, was quoted saying.

“Their ships pass by our waters while our people starve,” Samad was quoted as saying while he met U.N. officials.

U.N. officials have been trying to get the two sides back to the negotiating table after talks collapsed 2016. Samad said his movement was ready to give concessions in any political talks in order to stop the bloodshed.

Yemen, one of the Arab world’s poorest countries, is embroiled in a proxy war between the Houthi armed movement, allied with Iran, and a U.S.-backed military coalition headed by Saudi Arabia.

Some 8 million people are on the brink of famine, more than 10,000 have been killed and tens of thousands of others are struggling with cholera, diphtheria and other diseases.

The Saudi-led coalition has been trying since the start of the war in March 2015 to capture Hodeidah, Yemen’s biggest port, which receives 80 percent of Yemen’s imports, and has in recent weeks launched a ground campaign and intensified air strikes.

On Tuesday, the United Arab Emirates minister of state for foreign affairs, Anwar Gargash, said on Twitter the threats were another proof of “the terrorist nature of the Houthi militias,” especially as Samad was meeting a U.N. delegation. UAE is a major partner of the military coalition fighting the Houthis.

“The Houthi who decimated crops and seeds, destroyed Yemen, betrayed his ally and partner, is now threatening the international navigation; we are facing a terrorist gang that the end of its existence in Yemen is nigh,” Gargash said. (Reporting by Aziz El Yaakoubi; Editing by Alison Williams)

(c) Copyright Thomson Reuters 2018.

Filed Under: Maritime News Tagged With: yemen

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Trump Yanks Florida From Offshore Drilling Plan After Objections

January 10, 2018 by Bloomberg


Photo: By curraheeshutter / Shutterstock

By Jennifer A. Dlouhy (Bloomberg) — The Trump administration is ruling out plans to sell new drilling rights off the coast of Florida, including eastern Gulf of Mexico waters coveted by oil companies, amid pressure from Republican Governor Rick Scott.

The about-face came just five days after the Interior Department said it was considering selling oil and gas leases in more than 90 percent of U.S. coastal waters, including on all sides of Florida — the straits in the south, the Atlantic Ocean and the Gulf of Mexico.

Scott had angrily denounced the plan, suggesting last week that it could jeopardize Florida’s natural resources. He demanded an immediate meeting with Interior Secretary Ryan Zinke to argue against the proposal.

Zinke announced the change in a post on Twitter, saying it followed a meeting with Scott. Florida’s senators — Bill Nelson, a Democrat, and Marco Rubio, a Republican — as well as other lawmakers from the state joined Scott in raising concerns.

“President Trump has directed me to rebuild our offshore oil and gas program in a manner that supports our national energy policy and also takes into consideration the local and state voice,” Zinke said in an emailed statement.

“I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver. As a result of discussion with Governor Scott’s and his leadership, I am removing Florida from consideration for any new oil and gas platforms,” Zinke said.

Read my full statement on taking #Florida off the table for offshore oil and gas. Local voice matters. pic.twitter.com/fJhv0p0CDC

— Secretary Ryan Zinke (@SecretaryZinke) January 9, 2018



Nelson, who has long fought efforts to drill near Florida’s coasts, suggested the move was politically motivated, and designed to allow Scott to claim a victory in a potential campaign for the Senate seat Nelson now occupies.

“I have spent my entire life fighting to keep oil rigs away from our coasts. But now, suddenly, Secretary Zinke announces plans to drill off Florida’s coast and four days later agrees to ‘take Florida off the table,’” Nelson said in an emailed statement. “I don’t believe it. This is a political stunt orchestrated by the Trump administration to help Rick Scott, who has wanted to drill off Florida’s coast his entire career.”

Scott, who cannot run for governor again this year because of term limits, is expected to challenge Nelson, but has not announced his candidacy. His representatives did not immediately respond to a request for comment.

President Donald Trump compelled the Interior Department to develop a new five-year plan for selling oil and gas leases in U.S. coastal waters last April, with an eye on auctioning rights chiefly in the Atlantic and Arctic oceans. Federal law lays out eight factors the Interior Department must consider when developing those leasing plans, including the views of local officials and residents.

The administration’s master plan — which is likely to shrink further over the coming year as a final leasing blueprint is developed — has stoked opposition from coast to coast. More than 140 municipalities on the East Coast have already lodged their opposition to new drilling in the Atlantic Ocean. And the three governors representing the states on the West Coast also say they will fight efforts to sell new drilling rights in the Pacific Ocean.

More than three dozen Democratic senators asked the administration Tuesday to abandon efforts to rewrite and replace its 2017-2022 offshore leasing plan, which schedules 11 auctions, including 10 of territory in the Gulf of Mexico and one in Alaska’s Cook Inlet.

The eastern Gulf of Mexico was believed to be the most tempting new prospect for oil companies in the expansive Trump administration draft, because it is close to existing pipelines and processing facilities — not to mention the refineries in Texas and Louisiana.

There’s also little mystery about whether those eastern Gulf waters contain oil and gas. Energy companies already discovered a jackpot of natural gas roughly 30 years ago — at least 700 billion cubic feet and as much as 3 trillion cubic feet — in the Destin Dome, located about 25 miles south of Pensacola, Florida. And the same geological trends that have yielded major oil discoveries in other parts of the Gulf could be replicated in its easternmost reaches.

But opposition from Florida politicians concerned about oil spills fouling beaches as well as crippling the state’s tourism economy helped put that area off limits long ago, and a federal law now blocks new leasing through 2022.

© 2018 Bloomberg L.P

Filed Under: News Tagged With: offshore drilling, president trump

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Productivity: A Question of Focus, Health, Politics And Money



-- Published: Wednesday, 10 January 2018

By Axel Merk

Last week, I asked, “What would make 2018 more productive for you? Please email me the first thing that comes to your mind.” Before I summarize the responses, a big thank you to the 800+ people who sent me personalized responses. Someone pointed out that asking the question itself already helped because it motivated her to review her plans and targets.

My question had been intentionally open, and as such, I received feedback on productivity ideas pertaining to both personal and professional life. In some ways, answers were all over the place, including numerous answers that I had no idea were somehow related to productivity. That said, as themes emerged, at times, I could sense some respondents have their productivity initiatives under control with others strugganling. I’ll touch on the main themes below.

First off, to the classic definition of productivity. A lot of respondents mentioned they wanted more time:

My first thought was more time – but then I quickly realized that is the wrong answer - as it is not possible - and productivity is “return on time” not time itself

Well, there is no “wrong answer” and, as many indicated in their responses they were half joking about wanting more time in the day and/or week. The biggest time sucker judging by the lashing out by respondents appear to be social media enabled smart phones:


  • Great question and my answer is cutting back on my "time saving" devices, especially my phone. I'm dealing with teenagers spending too much time on their devices as well so I'm leading by example. I've found my productivity is up when I'm not checking it constantly and things are better in our family when we are unplugged.

  • Warmer weather and cutting off social media.

  • I already took the Facebook app off my phone. I'm hoping it helps me use my free time (including my 45-min commute) for reading books and magazines and listening to high-quality podcasts.

  • Everyone putting their phones down!

  • My main thought is more quiet time without interruptions, not any gadget.
To all those that indicated they want to get rid of their iPhone, I have bad news: someone responded he had an old flip phone and still received too many messages. High on the list was email management, with many hoping to receive fewer or more concise emails, less spam and, yes, fewer surveys such as the one I sent. But it’s not just in the INBOX, there is simply too much junk out there:


  • Making sure my emails don't manage my day

  • 2018 would be more productive for me if I had a better strategy for taming my inbox.

  • One work day without e-mail per week

  • If I could get a ""bot"" to answer my email, I'd love it!

  • An EMP attack would make a nice break from email for 2 or 3 years

  • A better curating process for the information I consume

  • I think spending less time online would probably have the largest effect. ...the multitude of various channels signaling "hey look here" today -- it didn't use to be like that. It's getting too distracting even for a guy who's been exposed to the net for decades.
A thoughtful response explained we are victims of our own success in being more efficient at many daily tasks:


  • …take business travel: 15 years ago, I called my travel agent and told her that I needed to go to Geneva on a specific date and needed a hotel. She would comply and come up with a complete (probably ridiculously expensive) itinerary. Who is using travel agents any more these days? I can do it myself and better, choose among the best flights etc and the whole package probably is a lot cheaper than a trip arranged by a travel agent.

  • ... admin work that used to be done by assistants ... now is being done by a more and more limited group of people within an organization. It is more effective ..., but ..in spite of digitalization and automation I spend more and more time doing “these admin” things and I have less time doing what I really should be doing: being creative and interact with clients
In that context, and going back to more traditional interpretations of productivity, there were calls to increase focus. There appears to be desperation to cut through the noise when it comes to any type of information:


  • Focus, Strategy and Discipline.

  • More focused, less distracted…

  • focusing on fewer things

  • Be better at doing the important tasks first, instead of the urgent

  • Better filters to figure out what not to work on, including those areas of such general interest, that we are very unlikely to attain an analytical edge.

  • More disciplined time management (stick to allotted times for meetings etc ). Having more time to think of really deeply about key issues, rather than just coping. Committing to a ‘mental reset’ session at least three times a week (sport, mediation, etc). Having a morning routine and end day routine (first hour, last hour) with no media, technology interference to allow focus

  • The ability to tune out "noise" both societal and in the investment world.

  • The confidence to pay less attention to Washington DC news

  • Regarding general time management:

  • Give up some of things that I like in order to focus on the things that I love.

  • Uninterrupted long-form blocks of time for reading and thinking.

  • My goal is to read more books and have more patience with myself when working on bigger ideas that may take longer to deliver (and could fail), but will have more impact than a quick effort.

  • Getting Things Done (GTD) philosophy from David Allen’s book of the same name
There were multiple calls for administrative assistants; some included the call for an assistant at home:


  • An administrative assistant would make my life more productive.

  • A butler, a PA (home and office) and a personal trainer.
While many looked for ways to squeeze more time out of a day:


  • 2018 would be more productive for me if I spent less time in bed.

  • If I could get by with less sleep
Many more pushed in the opposite direction. The “mindfulness” bucket was large. More sleep was explicitly mentioned in many emails as a way to get more productive:


  • Productivity comes from a healthy brain, every decision comes from it. So cherish your brain and cut the sugars, alcohol and go to bed an hour earlier every day. And don't forget to exercise.
Talking about health, those with health issues (or knowing someone with health issues), realized that good health is key to productivity; here a selection of the responses:


  • Getting more sleep and staying healthy.

  • Maintaining good health, in mind, and body.

  • A healthy back.

  • Continue maintaining good health

  • Healthier life style, (sleep better, eat healthier, exercise and channel positive energy)

  • More trips in the running shoes and more trips to the Gym. Good health equals a clear head and an efficient means to focus on key concise nuggets of information and avoids delays in acting upon that information.

  • Eating healthy foods and taking my vitamins regularly... it increases my energy, which allows me to be more productive.

  • Health! Physical integrated with mental and is circular both ways!
Talking about health, lifestyle is on people’s mind:


  • A life partner!

  • Finding myself

  • Loving things as they are would make me more productive in 2018 and beyond. When “bad” things happen, I can resist reality (“This can’t be happening!”) or I can accept that they have occurred and move on from there. When I take the latter path, I have a greater chance of learning how to prevent the “bad thing” in the future. And, even if that’s not possible, I can tackle the mess from a more reasonable perspective (“OK. This happened. Now what can I do?”). I’ve been working on this for decades, but there’s always more to learn.

  • My solution is to focus on being more mindful - living in the moment

  • Being what I really love!

  • My focus is on other matters such as personal growth

  • Hope for more peace than hate

  • Investing in oneself

  • More time for myself, my family and my friends

  • If I can become much more consistent about meditation.

  • One small positive thought in the morning can change your whole day

  • I think I should try getting an extra hour of sleep everyday for greater productivity. Currently get 6-7 hours.

  • And some time to goof off.
While health in itself would get people to be more productive, several responded a job in healthcare would do the trick for them. A new job, a new challenge within a firm, a job at all, or more “gigs” for independent contractors were mentioned, with a few asking whether we had any job openings (no, we aren’t hiring, but if you have ideas how you can join us as a revenue rather than cost center, I’m always listening).

The “new job” bucket of responses was closely related to responses that suggested more revenue would increase their productivity; some sought to pursue specific marketing initiatives. And just as some asked me whether we had job openings, some smart cookies pitched their products to me as the appropriate response as to how they can increase their productivity.

For some, an increase in productivity requires an increase in revenue; many need cash for capital expenditures to make that happen. Indeed, many thought they could increase their productivity if they had a higher salary; several if they were able to raise money for a venture. And, of course, some suggest less conventional ways to raise money:


  • A winning lottery ticket so I could expand my business without debt.
My query went out to people with a variety of backgrounds; notably, my circle of contacts includes many investment professionals, but also many who are not, but for whom investing is on top of their minds (at least when they get an email from me). Staying on the topic of money, many investment professionals indicated they would be more productive if volatility in the markets were to go up and, with it, equity prices were to fall. For those not in the industry, the reason is rather straightforward: investment professionals have a difficult time adding value when indices go up in a straight line. When it came to non-professional investors, several had very specific requests for the performance of what they were invested in, with many requesting the price of gold or silver to go higher. Beyond that, there was significant disagreement. Some want Bitcoin to soar, others want it to crash. And there were also those that wanted equity prices to be higher and volatility to remain low.

Many suggested their productivity would increase if there was less government interference in the markets; this covered the whole spectrum from low interest rates distorting asset prices to outright government interference and alleged manipulation in markets:


  • What would make 2018 more productive for me would be for the markets to cease being a political tool and return to being a 'free' market. Let me know if you see this happening, ever. Otherwise, the markets will remain a ... tool of the elite and participants in the Greater Fool School of investing.
In a multitude of ways, people requested to find clarity. There were lots of requests for high quality information, both for general news, but many specifically related to investing:


  • Improving the quality of my information sources. This means paying for the best research presented in the most intellectually clear, dense format. The free sources tend to be bloated with excess advertisements and coy “come ons” to join their pay service. I can understand that. I can relate to that. But it’s a time swamp that dissipates focus and distracts me from identifying core themes and crafting action plans to take advantage of the operational situation.

  • For me, it'd be a comprehensive single-stop, source for news and analysis. There's long been a bias in media, but after our most recent presidential election, it's hard to really get an unbiased and analytical perspective on current events and even business-related news.

  • An understanding of the Federal Reserve's monetary policy roadmap for 2018.

  • A service that makes specific sector recommendations on a regular basis (perhaps weekly or monthly?), along with brief rationale. I know lots of newsletters offer this, but I don't trust them. I read a lot of macro analysis, but I have trouble putting it into action.

  • A quarterly chartbook of key market/economic indicators would be helpful. We see lots of these data books but we are always open for another one - particularly one that focuses on the most relevant or key signals for asset allocators like us.

  • More relevant market insights

  • Any insights you have on inflation, inflation data, or expectations in the coming year

  • Insight on the yield curve.

  • It would help to be able to listen to your commentaries while driving, as podcasts, instead that having to read them, as I always do.

  • Knowing the 10 best data points the most successful investors use (and how they combine them) to understand the global macro environment.

  • Continued analysis of "if this happens, then do that" with respect to the market. No one can forecast the market but we can be prepared to respond to situations.

  • Effective tail risk hedging.

  • From an investment standpoint, more concise one stop summary of what market or stocks are high recommendations

  • Having more all- weather strategies available (lower returns/risk profiles with ability to make money in different markets).
Some are working on or desire investment software:


  • Better investment technology.

  • A better investment algorithm

  • Getting my current trading systems completely automated and integrated is priority one right now.

  • I'd be more productive if I could get my hands on some investment stochastic modelling software.
Talking about distractions: politics appears to be a major one. If our politicians stopped bickering, many respondents write they would be more productive. Some are genuinely concerned about North Korea and say they are less productive because of it. Some of the juiciest comments I received lashed out at President Trump, arguing that the noise created by his comments are a distraction; that said, as you might imagine, not everyone agrees, and others see their productivity increase through the President’s actions. Either way, please don’t shoot the messenger, I’m merely reporting.


  • Let’s take a step back and look and answers addressing general office efficiency:

  • Quicker meetings.

  • A limit on the number of meetings that can be scheduled in a week.

  • Thank you for including me in this survey! My 2018 will be more productive as I streamline my onboarding process and clarify expectations with new and old clients.

  • A better way to incorporate new tasks that arise when out of the office into the workflow

  • Less bureaucracy and administration with our group of companies. Easier access to the relevant information and people to reduce the energy and time.

  • For head hunters and lead selling companies to not bother me.

  • I would have to say work on getting rid of unnecessary tasks on my to-do list or consolidating tasks!

  • More efficient onboarding of new client accounts comes to mind first as my firm's biggest issue.

  • The biggest thing would be my own office. we have an open architecture plan, which is great for ... communicating with each other but makes it hard for me to work...

  • Spending more time with clients as a result of improvements in our service platform
Only one person chose what might have been a common answer some years ago: cleaning up his desk.

Learning new skills, or through technology, including:


  • I'd appreciate better productivity tools and software to help organize my thoughts better. Maybe a new notepad

  • Better use of technology, it’s always the best way to become more productive.

  • New technology that works together

  • If I trained myself to use the technology I have better

  • Completing the automation of the software on which my RIA is based.

  • AI and search

  • Better software (and a Bloomberg terminal)

  • Better integration of my software. Access to my CRM via iPhone app.

  • As an RIA, more efficiency from our custodian brokerage firm would help the most. RIAs are very dependent on their custodians and they are very helpful, the investing world evolves quickly and anything they can do to better keep up, helps immensely.

  • Make better use of tech tools like Evernote

  • Adoption of a new laptop/tablet/device to increase capability of mobile updates and unchain me from my desktop.

  • My request for 2018: Better telecommuting technology. I spend an hour and a half in the car everyday to get to and from work. I can work from home and complete all of my daily tasks from there, but I miss out on the ease of collaborating in person. I would love to be able to FaceTime my colleagues desk phones and to have cost effective video conferencing technology in every conference room.
Better infrastructure:


  • Better transport infrastructure in greater NYC

  • A shorter commute

  • better broadband
That said, more technology for the sake of it isn’t always wanted:


  • Less technology , not more ... ... ... too cluttered

  • Software vendors stop changing their formats/skins. I learn to do things quickly, then they change something and I have to relearn or find a work around.

  • One thing that comes to mind is not having to cope with various web site "improvements." The less time I have to spend on re-learning how to use a web site, the more time I will have in 2018 for other things.
I should not forget to mention compliance overhead. Given that many of my contacts work in the investment industry, one of the key impediments to their productivity is complying with regulatory overhead – if you haven’t heard of the acronyms used below, consider yourself fortunate:


  • Less regulation burden frees resources that are very expensive.

  • Less regulation...

  • Dodd Frank, EMIR, now MIFID II have created an enormous drain on resources. No new regulation will allow us to focus on the business once again.

  • More changes in DOL requirements for 401K and IRA etc. accounts-so far small accounts$25m or less are disadvantaged, paperwork for others is too cumbersome and investment guidelines are wrong.

  • Repeal DOL

  • My 2018 would be more productive if we could reach a final decision/outcome on the "fiduciary rule" for financial advisors (i.e., is it ever going to be fully implemented or not?).

  • Clarity around regulation would increase my productivity.

  • Less compliance documentation requirements

  • A removal of the barriers that stand between products and buyers to allow all ETF providers to be on equal footing

  • Government clarity!

  • More regulatory clarity in our industry, which could include a re-visit to Glass Steagall. It feels like the Wild West again coupled with redundant documentation required by regulations. Glass Steagall might clear the ever rising financial ambiguity in financial regulation by reducing the investment banking money flow to banks with depository accountability, as the gambling in housing etc continues. Regulation only mucks it up, and never clears up or enforces the root bad behavior, but a law dividing the banking industry into depository and investment banks again would reduce overlapping regulation, and give me more time to work with my clients.

  • Less bureaucracy (read: stupid regulations from Mifid II).

  • Less paperwork!

  • Reduction in the overwhelming regulatory oversight from government and it’s trickle down and interpretation at firm level.
Some emphasized working less to achieve more:


  • Get rid of difficult clients - Get rid of them quickly - Oil and water does not mix

  • A reduction of my work load/stress

  • More vacation

  • Give up a couple of titles!

  • Less travel!!!

  • More productive for me would be less time spent on business travel.

  • Longer holidays

  • 6 hour workdays….it works for the Swede’s

  • Take all my paid leave
I had four respondents reference religion to improve their productivity. And some pushed back altogether, arguing that increasing their productivity is not on their agenda for the year.

Finally, some think big:


  • A flying car

  • A teleportation device
Here you are; maybe there’s a suggestion or two in here to make your year more productive. If so, consider sharing this with your friends. In the meantime, follow me on LinkedIn and Twitter.
Axel Merk
President & CIO, Merk Investments

http://www.merkinvestments.com/index.php

http://news.goldseek.com/GoldSeek/1515617633.php
 

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Craig Hemke: Gold Has Been Alchemized
The Daily Coin.org


Published on Jan 9, 2018
Thanks for watching/listening. Share, Subscribe, Like

Please visit Craig Hemke https://tfmetalsreport.com

Please visit Rory - https://thedailycoin.org and http://dailysoundbite.com

I love sitting down with Craig Hemke, https://tfmetalsreport.com, not only does he share great information it is a lot of fun with some laughter thrown in to keep these all-too-serious conversations a little lighter. When you're dealing with such subjects as our monetary past and what we see as our monetary future, humor is a necessary ingredient.

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China Oil Spill Compensation Claims Face Iran Payment Snags

January 10, 2018 by Reuters


The Panama-registered Sanchi tanker is seen ablaze in open waters, after colliding with a Chinese bulk ship, January 7, 2018. Korea Coast Guard/Yonhap via REUTERS

By Jonathan Saul LONDON, Jan 10 (Reuters) – The reluctance of foreign banks to deal with Iran could complicate any compensation payments resulting from the collision last week of an Iranian oil tanker and a Chinese cargo ship, sources say.

The tanker Sanchi, carrying 136,000 tonnes of highly flammable condensate oil, collided with the Chinese dry cargo vessel CF Crystal on Saturday in the East China Sea, causing an oil spill and a blaze that is still raging four days later.

Liability has yet to be established but lawyers and insurers say wherever the fault lies compensation payments risk getting bogged down or even blocked because the tanker and most of its crew were from Iran.

The potential hitches stem from U.S. restrictions on financial transactions with Iran still in place despite the lifting of international sanctions against the country in 2016 following its nuclear deal with world powers, lawyers say.

The Sanchi’s $60 million cargo of ultra-light crude oil spilled into the ocean and caught fire after the collision in international waters some 160 nautical miles (300 km) off China.

While the CF Crystal has returned safely to port with its crew, dozens of rescue boats from China and South Korea have been battling strong winds, high waves and poisonous fumes to try to find 31 sailors from the Sanchi and tame the fire.

Rahul Khanna, global head of marine risk consulting with German insurer Allianz, said losses from the collision could be in the hundreds of millions of dollars.

“The value of the cargo and the value of the hull itself would be one major impact, but I think the oil pollution liability aspects are probably the largest element,” he said.

He said the environmental impact would be less severe than for a heavy crude spill, however, as condensate evaporates quickly and would not cause a major oil slick.

U.S. SANCTIONS
Some lawyers said there would be payment problems whether Iranian parties were the beneficiaries of any compensation, or if they were found liable.

Nigel Kushner, chief executive of law firm W Legal and an Iran specialist, said any compensation process would be complex as there were four different insurance issues at play: the ship itself, or the hull, the cargo, pollution and the deceased.

Thirty of the Sanchi’s crew are from Iran and two are from Bangladesh. One body has been recovered from the sea but the rest are missing. The vessel (IMO:9356608) is run by Iran’s top oil shipping operator, NITC.

“It will probably be perfectly legal for insurers to pay, but in practice near impossible,” Kushner said.

“Numerous insurers will be involved requiring multiple payments,” he said. “I have seen lengthy and frustrating delays for clients previously with respect to insurance payments coming out of the Lloyd’s (insurance) market when payments are delayed or blocked.”

Under U.S. sanctions, U.S. financial institutions and are prohibited from any trade with Iran, despite the nuclear deal struck in 2015, known as the JCPOA.

While non-U.S. banks can do business with Iran, lawyers say transactions involving U.S. dollars can be problematic as they must not involve the U.S. financial system in any way and that can be difficult in practice.

Banks and individuals are still restricted from trade with individuals or entities that remain on a U.S. blacklist, adding to further caution over any business with Iran.

Transactions in other currencies are allowed, but lawyers say large Western banks, for example, are wary of dealing with Iran in case they fall foul of existing U.S. sanctions.

“As a general matter, despite the sanctions relief contained within the JCPOA, there is still great difficulty in Western banks processing payments to Iranian counterparties, no matter the currency,” said Matthew Oresman, a partner with Pillsbury Winthrop Shaw Pittman, who advises companies on Iran compliance.

“For this specific incident, depending on the source of the insurance funds and the process by which it is to be delivered to Iranian recipients, there could be difficulties for the policy holders or other beneficiaries,” he said.

BANKING PARALYSIS
In recent years, compensation claims for major oil pollution incidents have largely been handled by the International Oil Pollution Compensation Funds (IOPC Funds) inter-governmental body. It typically steps in to provide compensation for disasters over and above insurance company caps on payouts.

Maritime officials say compensation this time would fall under China’s far smaller scheme known as the COPC Fund, partly because the oil in question is condensate which is not covered by IOPC Funds.

Xia Jun, a Beijing-based environmental lawyer, said the Chinese government would calculate the losses arising from pollution to the environment and fishing sector.

Protection and Indemnity (P&I) clubs – owned by shipping companies – insure the world’s ocean-going tonnage against pollution and injury claims, typically the biggest costs when a vessel sinks. Separate hull and machinery policies cover vessels against physical damage.

In the case of the Panama-flagged Sanchi, it is insured for P&I by Steamship Mutual based in London.

“The vessel is entered with the Club and we have been very busy over the weekend with our emergency response. Clearly a major incident and we are doing all we can to support the members,” Steamship said.

Seventy percent of the value of Sanchi itself is covered by 11 international insurers, led by Norway’s Skuld, with the other 30 percent covered by Iranian insurers, according to Skuld Chief Executive Stale Hansen.

Skuld also covers the Hong Kong-flagged CF Crystal (IMO:9497050) for protection and indemnity while the vessel’s hull is covered by a Chinese insurer.

“The major issue with this case is going to be the banking issue,” said a shipping source familiar with the incident. “There is a degree of paralysis among banks.”

CHINESE BANKS?
An Iranian government official acknowledged that when it came to the collision involving Sanchi there may be banking issues, though he was optimistic a solution could be found.

“Major banks still refuse to do money transactions with Iran but there are tens of smaller banks willing to do such businesses,” the official said.

“Also, this is an extraordinary situation … Asian banks, especially Chinese banks, will surely help. There are several methods, including using local currencies or paying Iran’s debts somewhere else,” he said.

Chinese banks, however, have become more reticent about doing some business with Iran.

Iranian media reported in October that some had closed accounts of certain Iranian nationals in China due to tougher enforcement by Chinese banks of money laundering rules. FATF, an international body that monitors money laundering worldwide, has kept Iran on its blacklist of high-risk countries.

Andrew Bardot, executive officer of the International Group of P&I Clubs – the umbrella association for ship insurers that provide cover for pollution and injury claims – said any problems with compensation payments from the incident would stem from the banking sector rather than issues about legality.

“That being said, there are banks who have been and are able to facilitate Iranian related payments, which in the recent experience of the (International) Group have proved effective,” he said. (Additional reporting by Meng Meng in Beijing, Parisa Hafezi in Ankara, Carolyn Cohn in London and Noor Zainab Hussain in Bengaluru; editing by David Clarke)

(c) Copyright Thomson Reuters 2018.

Filed Under: Maritime News Tagged With: sanchi tanker collision

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After Florida, More States Press Trump Administration for Offshore Drilling Exemptions

January 10, 2018 by Reuters


Photo: By botulinum21 / Shutterstock


By Valerie Volcovici WASHINGTON, Jan 10 (Reuters) – Governors and other officials from several U.S. coastal states ramped up pressure on the Trump administration on Wednesday to exempt their waters from an offshore drilling plan, hours after the Interior Department granted Florida’s request to opt out.

The backlash could complicate President Donald Trump’s efforts to expand oil and gas production offshore. A proposed leasing plan unveiled last week aims to open up all U.S. coasts to drillers over the next five years. Alaska and Maine are the only two U.S. states whose governors have expressed support for the plan.

The governors of Delaware, North Carolina and South Carolina on Tuesday were seeking meetings with Interior Secretary Ryan Zinke to press their case that drilling would pose significant risks to coastal tourism, while other state representatives issued sharply worded tweets.

“Tourism and recreation along the Delaware coastline account for billions in economic activity each year, and support tens of thousands of jobs,” Governor John Carney of Delaware, a Democrat, said on Twitter Wednesday.

“New York doesn’t want drilling off our coast either. Where do we sign up for a waiver @SecretaryZinke?” wrote New York Governor Andrew Cuomo, also a Democrat.

Zinke had announced late Tuesday that he was removing Florida state waters from the proposed offshore drilling plan at the request of Governor Rick Scott, who argued that drilling poses a threat to Florida’s tourism.

In the announcement, Zinke called Scott, a fellow Republican, a “straightforward leader that can be trusted.”

On Wednesday, Zinke told the Washington Post that he will talk to every governor affected by the offshore drilling proposal.

“It doesn’t matter to me whether you’re Republican or Democrat. This is going to be a long process,” he told the newspaper.

The Interior Department did not immediately respond to a request for comment.

Sierra Weaver, a lawyer for the Southern Environmental Law Center, said Zinke’s move was a breach of protocol that will put the Interior Department on shaky legal footing if the secretary doesn’t treat other coastal states in the same way.

“It seems incredibly hard to justify or explain that this is anything other than arbitrary or capricious,” said Weaver.

Matt Lee-Ashley, a senior fellow at the liberal Center for American Progress and former deputy chief of staff under Obama’s Interior Department, said Zinke’s action by Tweet could undermine his five-year offshore plan.

“Offshore drilling decisions in the United States are, by law, supposed to be guided by science, public input, and a careful balancing of environmental and energy needs,” he said.

Governor Roy Cooper of North Carolina, also a Democrat, Tweeted on Tuesday morning “Not Off Our Coast,” with a link to Zinke’s Tuesday night decision on Florida. A source with knowledge of the matter said Cooper was also trying to arrange a meeting with Zinke.

South Carolina’s Republican Governor Henry McMaster on Wednesday issued a statement asking for a meeting with Zinke to protect his state’s coastline. (Writing by Richard Valdmanis; Editing by David Gregorio and Lisa Shumaker)

(c) Copyright Thomson Reuters 2018.

Filed Under: News, Offshore News Tagged With: president trump

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Bonds Bounce After China Denies "Fake News" Report; Oil Tags $64


by Tyler Durden
Thu, 01/11/2018 - 06:59



U.S. equity futures are back in the green, while Asian and European stocks are mixed after worries about a U.S.-led trade war put world stocks at risk of their first two day loss of the year on Thursday, while bond markets bounced as China poured cold water on reports that it might stop buying U.S. debt.

As discussed last night, the current market challenge is to assess whether the slew of reports we’re getting are ‘fake news’ - Bloomberg's report on Wednesday about China Treasury holdings triggered a fixed income sell off. However, China’s FX authority SAFE overnight condemned those reports as ‘false news’, which nonetheless may have been a simple "trial balloon" to gauge the market's reaction to when the real announcement comes. Amid the confusion, Treasuries have unwound much of yesterday's move.

What’s clear, as some trading desks note, is that whether it’s fake news or not, the market mindset right now is ‘react first, check later’. This has resulted in choppy markets and a welcome pick up in volatility – although the subsequent backtracking is less welcome, these market dynamics may become a frequent feature of 2018.

Then, another Reuters report late Wednesday said Canada was "increasingly convinced" Trump will announce the US is pulling out of Nafta. Following the news there was a report that Mexico will leave NAFTA negotiation if President Trump triggers 6-month process to withdraw from the deal. Both the CAD and MXN immediately sold off and remain on edge, awaiting official confirmation.

“The denial of the China story puts the dollar back where it was though the yen is still strong, so to me that is the interesting move and whether that is going to stick,” said Saxo Bank’s head of FX strategy John Hardy. “The 2.5 percent level on the Treasury is a line in the sand so U.S. CPI (inflation) data tomorrow is going to be absolutely critical,” he added, talking about the view that higher inflation will encourage more U.S. interest rate hikes.

U.S. 10Y TSY yields pulled back to 2.544 percent from Wednesday’s ten-month high of 2.597 percent. Euro zone bond yields eased 1-3 basis points (bps) too, with Germany’s 10-year Bund yield 3 bps off a two-month high at 0.46 percent. China's denial also helped the dollar to its fourth gain in the last five days against a basket of top world currencies, having suffered one of its worst years on record in 2017. Against the yen, it added 0.3 percent to 111.63, after hitting a six-week low of 111.27 yen in the previous session when it skidded 1.1 percent, its largest decline in almost eight months.

There was also some relief from Japan, another source of pain for bond markets this week. The Bank of Japan maintained the amount of its bond purchases on Thursday. A cut in its buying of longer-dated debt earlier this week had fanned worries the BOJ may be moving to turn off its stimulus. Specifically, as RanSquawk explains, "10yr JGBs found some reprieve from this week’s selling on mild short-covering and after the BoJ’s Rinban announcement in which purchases in 1yr-10yr maturities were maintained at a respectable amount of nearly JPY 1tln."

Still, as Bloomberg - which started this whole mess notes - while traders have shaken off some of the concerns that led to Wednesday’s declines, they’re still struggling to find fresh reasons to extend a rally that took global stocks to or near record highs earlier this week. A string of earnings releases starting with JPMorgan Chase & Co. and Wells Fargo & Co. on Friday might offer them more direction.



Looking at world equity markets, Europe’s main bourses are modestly in and out of the red and MSCI’s world index was down 0.2% after Asian and emerging market indexes had been pulled lower by the abovementioned warnings from Canada and Mexico that NAFTA’s days could be numbered. Asian equities were mixed – rallying in China while the Nikkei was down.

European stocks are little changed amid a slew of corporate results as investors continue to assess the new year’s equity rally. The Stoxx Europe 600 Index rises less than 0.1% following Wednesday’s 0.4% drop, which snapped a five-day winning streak. Miners are the best performers among industry groups, advancing for a sixth straight session, while retail shares drop with Tesco Plc after its Christmas sales missed estimates. Hexagon AB is the best performer among technology shares after its Chief Executive Officer Ola Rollen was acquitted by a Norwegian court of insider-trading charges.

The euro traded at $1.1945, nearly flat on the day, and holding above Tuesday’s low of $1.1916. There was more upbeat data for the shared currency though. German economy grew at the strongest rate in six years last year a preliminary estimate from the country’s statistics office showed, although it was slightly under some peoples’ forecasts.

Bitcoin also took a major beating, falling as much as 11% as South Korea - one of the crytocurrency’s biggest markets - said it was drawing up laws to ban trading in it.

European stocks edged lower, extending Wednesday’s retreat as retailers declined, while bonds gained as investors sought to put the turbulence of midweek behind them.

After Treasuries slid on Wednesday, with the 10Y yield rising as high as 2.59%, the Treasury complex found support on the back of a statement by China's State Administration of Foreign Exchange in response to media reports that it may reduce or halt its purchases of US Treasuries. The statement stipulated that the report may have cited wrong sources or may be fake news (using translation from Bloomberg). The USD found support versus the JPY, although the move corrected less than half of yesterday’s USDJPY selloff. Equities were mixed – rallying in China while the Nikkei was down.

Commodity markets meanwhile were taking something of a breather after a flying start to the year.

Both Brent and West Texas Intermediate oil price futures were hovering just off three-year highs at just under $70 and $64 a barrel, with WTI briefly rising above $64 overnight, triggering stops, while industrial metals dipped and gold ticked to $1,317.76 after spiking to nearly four-month highs in the previous session.

“In Q1, the balance of risk to Brent lies to the downside, with prices overheating, record net-length built into the futures market and fundamentals set to weaken seasonally,” BMI Research said in a note.

Expected data include PPIs and jobless claims. Delta Air Lines and Shaw Communications are among companies reporting earnings. The ECB’s account of the December meeting due Thursday may shed light on the use of forward guidance. The U.S Treasury will auction $12 billion of 30-year bonds on Thursday.

Bulletin Headline Summary from RanSquawk
  • European equities trade relatively directionless with UK retail names underperforming following week trading updates
  • The Dollar Index is back within striking distance of the 92.500 level and firmer vs all G10 rivals bar its antipodean
  • counterparts
Market Snapshot
  • S&P 500 futures little changed at 2,751.30
  • STOXX Europe 600 down 0.09% to 398.25
  • MSCI Asia Pacific down 0.3% to 180.28
  • MSCI Asia Pacific ex Japan down 0.2% to 585.71
  • Nikkei down 0.3% to 23,710.43
  • Topix down 0.2% to 1,888.09
  • Hang Seng Index up 0.2% to 31,120.39
  • Shanghai Composite up 0.1% to 3,425.35
  • Sensex up 0.2% to 34,497.16
  • Australia S&P/ASX 200 down 0.5% to 6,067.62
  • Kospi down 0.5% to 2,487.91
  • German 10Y yield fell 2.4 bps to 0.519%
  • Euro down 0.07% to $1.1940
  • Italian 10Y yield rose 0.3 bps to 1.769%
  • Spanish 10Y yield fell 4.9 bps to 1.502%
  • Brent futures up 0.2% to $69.36/bbl
  • Gold spot up 0.1% to $1,318.22
  • U.S. Dollar Index up 0.2% to 92.47
Top Overnight News
  • China’s State Administration of Foreign Exchange said in a statement Thursday that a report on Wednesday which said China may slow or halt purchases of U.S. Treasuries “might have cited wrong sources or may be fake news.” It said investments in Treasuries are decided by market conditions
  • Premier Li Keqiang said China’s economy expanded by about 6.9 percent in 2017, according to a report by the official Xinhua News Agency; Li said the economy performed better than expected and the urban surveyed unemployment rate was the lowest in many years
  • Dollar rises against most Group-of-10 peers; EUR/USD little changed, sliding from a day high in Asia following the statement from China’s State Administration of Foreign Exchange on report about China’s purchases of U.S. Treasuries

  • Sterling trimmed losses in early London hours after earlier touching a two-week low versus the greenback; recruitment firm Morgan McKinley said an annual 37% decline in job openings in December underscored the looming “Brexodus” from the City

  • The yen fell against the dollar for the first time in three days as a flow of short- dollar unwind saw turnover pick up on China statement, only to cap at macro and small exporter selling; BOJ maintained debt- purchases plan at operation, after cutting buying of super-long debt on Tuesday

  • London Finance Jobs Post ‘Seismic’ Drop in Sign of Brexit Impact
  • Morgan Stanley Counters Bill Gross Over Bond Bear Market Call
  • Apple Seen Getting Possible $4 Billion Boost From Tax-Law Quirk;
  • Quant Copycats Tested as Yield Rise Imperils Hottest Trade
  • Rio Is Said to Drop Chase for $5 Billion Lithium Miner Stake
  • Cryptocurrencies Retreat Amid South Korea Clampdown Concerns
Asian equity markets were mostly lower amid a dampened global risk tone, which was triggered by China concerns after officials were said to see US Treasuries as less attractive and recommended either cutting back or halting purchases altogether. This was viewed by some as an implicit threat by the world’s largest foreign holder of USTs against trade measures by the US, although China’s SAFE later suggested that the report may have cited a wrong source or could be fake news. Nonetheless, ASX 200 (-0.5%) and Nikkei 225 (-0.3%) were both subdued with broad-based weakness across nearly all sectors in Australia, while Japanese stocks remained at the whim of the recent JPY strength. Chinese markets also conformed to the sombre picture with both Shanghai Comp. (+0.1%) and Hang Seng (+0.1%) initially cautious as the PBoC’s liquidity efforts continued to be on the light-side. Finally, 10yr JGBs found some reprieve from this week’s selling on mild short-covering and after the BoJ’s Rinban announcement in which purchases in 1yr-10yr maturities were maintained at a respectable amount of nearly JPY 1tln. China SAFE said that report on China mulling reduction in US Treasury purchases may cite a wrong source or be fake news.

Top Asian News
  • PBOC Adds Funds First Time in 3 Weeks After Money Rates Jump
  • Saudi Bourse ‘Taking All Measures’ for Successful Aramco IPO
  • One Thing Missing From Copper Boom Is Buyers of Actual Metal
  • Japan Bond Risk Hits 10-Month Low as Tension Over N. Korea Eases

European stock markets trade relatively directionless (Eurostoxx 50 -0.2%) once again as European-specific newsflow remains on the light side. In terms of sector specifics, telecom and consumer discretionary names underperform, whislt stock specific movers include Tesco (-4.4%) and Marks & Spencers (-5%) who are at the foot of the FSTE 100 following disappointing trading updates. Elsewhere, Fiat Chrysler shares are underperforming in the FTSE MIB on NAFTA concerns. Meanwhile in fixed income, the turnaround from bear market territory to debt friendly if not bullish sentiment appears to have been confirmed by decent investor demand for sovereign issuance, and of course China’s apparent rejection of anti-US Treasury holdings headlines yesterday. Considerable concessions in advance of the auctions must be taken into consideration, but Italian BTPs have nudged new intraday peaks in wake of the results, not to mention the scramble for Wednesday’s 20 year syndication. Bunds, Gilts and USTs all holding the bulk of their recovery gains, but the last leg of this week’s US refunding still to come and the long bond perhaps not as attractive below 2.90% as it was when heading towards 2.95%. On the data front, US weekly jobless claims and PPI also on the agenda, as crude prices continue to rally and keep bond vigilantes on their toes.

Top European News
  • No Deal Brexit Could Cost 482,000 Jobs as City Recruitment Slows
  • German Economic Growth Accelerates Less Than Forecast in 2017
  • Chemicals Slump as BofAML Downgrades BASF, Clariant, Evonik
  • Hungary Calls April Election as Orban Seeks to Extend His Rule

In FX, the Dollar Index is back within striking distance of the 92.500 level and firmer vs all G10 rivals bar its antipodean counterparts, as Chinese reports about curtailing US debt purchases are dismissed as false by SAFE and the Foreign Ministry. However, fresh NAFTA jitters are also underpinning the Greenback to the detriment of the Cad and Mxn. Usd/Cad has bounced further from last Friday’s divergent US/Canadian jobs data lows (1.2355) towards the 1.2593 100 DMA and offers around the 1.2600 level. BoC rate hike odds have lengthened dramatically in response to concerns that the trade talks could break down, while Usd/Mxn has spiked to 19.3000+ for the same reasons. Usd/Chf is back up near 0.9800 vs yesterday’s lows below 0.9750, and Usd/Jpy over 111.50 and through the 200 DMA at 111.72 and 111.85 supply to a high just shy of 111.90 at one stage, eyeing 112.00 offers/psychological resistance, before a 112.08 Fib and the 112.26 100 DMA. 111.40-35 provides support on the downside. Cable has retreated below 1.3500 and through 1.3480 stops (just), but could be drawn towards a 600+ mn option expiry at the figure, with bids seen at 1.3425. Eur/Usd has reversed towards recent low 1.1900 area lows vs Wednesday’s 1.2000+ high and may also be influenced by expiry interest given a big (2 bn) 1.1950 strike that runs off tomorrow. On that note, a Eur/Sek 9.8000 option in the same size could entice given that the strike is close to the current 9.7800 spot price. As noted, the Aud and Nzd are bucking the weaker vs Greenback trend, with Aud/Usd through 0.7860-65 stops and 0.7870 macro offers on the way to a 0.7885 overnight high in wake of much stronger than expected Aussie retail sales data. 0.7900+ stops lie ahead, as the Aud/Nzd cross reclaims 1.0900 and the Kiwi stalls just above 0.7200 vs the Usd.

In commodities, price action in WTI and Brent crude had been somewhat uneventful overnight, however prices broke above yesterday’s highs during European trade amid no fresh fundamental catalysts before extending gains after WTI tripped stops above USD 64.00bbl. In metals markets, precious metals have seen very little in the way of price action. Elsewhere, nickel hit a 2-month high in Chinese trade following tight stocks whilst copper saw mild gains as prices tested USD 2.50/lb to the upside. UAE Energy Minister says there is a commitment to continue OPEC deal for a full year and that oil market is still rebalancing, expects to achieve full balanced oil market this year

Looking at the day ahead, the December PPI (core 0.2% mom and 2.5% yoy expected) as well as the weekly initial jobless and continuing claims are also due. Onto other events, the minutes for the ECB December meeting will be out and the Fed’s Dudley will speak on US economic outlook. Elsewhere, the BOE will publish its 4Q credit conditions survey and China begins a three-day annual meeting to set the agenda for its anti-corruption work in 2018.

US Event Calendar
  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior 0.4%; PPI Ex Food and Energy MoM, est. 0.2%, prior 0.3%
  • PPI Final Demand YoY, est. 3.0%, prior 3.1%; Ex Food and Energy YoY, est. 2.5%, prior 2.4%
  • 8:30am: Initial Jobless Claims, est. 245,000, prior 250,000; Continuing Claims, est. 1.92m, prior 1.91m
  • 9:45am: Bloomberg Consumer Comfort, prior 51.8
  • 2pm: Monthly Budget Statement, est. $26.0b deficit, prior $138.5b deficit
DB's Jim Reid concludes the overnight wrap

We’re only just through the seventh working day of 2018 but this year already feels like it’s going to be more interesting than 2017! Feel free to define “interesting” yourselves but it would be remarkable to us if higher inflation, less QE support and higher yields didn’t periodically give us more bouts of volatility and increased activity like that seen over the last 48 hours.

Treasuries were again in the crossfire yesterday with what I’m calling the Twitter vs Bloomberg phoney war. Twitter because Mr Trump loves to cite US equity performance via that medium and also use it to hit out against things like China’s trade policy. It may be overthinking to suggest the following but yesterday’s sell-off originated from an uncited Bloomberg story that could have been China’s way of warning Mr Trump that being too aggressive on trade might have consequences for his country’s bond market (China being the largest holder - see below) and with it equity markets.

The Bloomberg report in question suggested that senior government officials in China were in the process of reviewing China’s FX holdings and had supposedly recommended either slowing the pace of Treasuries purchases or halting them altogether. This led to 10yr US yields touching 2.5954% intra-day (up 5.3bps from day’s lows) and taking it to within 3bps of the calendar year high made back on March 13th last year. 10 year yields have already seen a 19bp range in the 7 days of the year so far and to put that in perspective, we’ve already seen about 30% of the high-to-low range of 2017. Later in the US session, a strong 10yr auction (highest bid to cover since June 2016) led to a strong rally back, with the close at 2.558%, some 3.7bps off the highs for the session and only 0.4bps higher on the day.

To add further intrigue to the story, this morning China’s State Administration of Foreign Exchange suggested that the story may have quoted a “wrong source” or be “fake news”. The release on their website went onto say that China has always invested and managed its reserves in a diversified manner, to ensure the safety and value of its foreign exchange assets. Investment in U.S. Treasuries are decided by market conditions. Treasuries have rallied around 2.5bps on the report and are trading around 2.531% as we type.

As a bit of general context, China currently holds about $1.2tn of US Treasuries (as of the latest data to the end of October 2017), although that’s up from just over $1.0tn at the start of last year. Japan is in second place with $1.1tn and Ireland third but with a relatively much smaller $312bn of holdings. There was plenty of scepticism about the validity of the story at the time yesterday but even with this morning’s response from China the market will still debate as to whether there’s actually no smoke without fire.

The possible political angle shouldn’t be underestimated and the timing is apt given that the Politico article from last week suggesting that President Trump was preparing to unveil an “aggressive” trade crackdown over the coming week including tariffs “aimed at countering China’s and other economic competitors’ alleged unfair trade practices”.

DB’s FX strategist Alan Ruskin wrote an interesting note yesterday in response to the story. In his view given possible US protectionist measures, it makes sense for China to pre-emptively flag that it holds some important cards, which could then restrain the US's actions. It depends on how disruptive Trump’s measures are on trade, as to how much incentive there will be for China to show it can also hurt the US. What is pretty clear is that in hurting each other, China and the US will hurt themselves. That is the glue that supports the status quo, with China the global manufacturer in chief, and the US a recipient of China capital to cheaply finance the trade deficit. There are limits to how much either the US or China will be willing to disrupt this synergistic relationship and thus Alan thinks China’s bark is bigger than its bite. You’ll find the link to Alan’s report here.

Elsewhere on a day of unnamed officials being quoted, over in Canada, another unnamed government official told Bloomberg there is increasing likelihood that the US could withdrawal from the NAFTA (North American Free Trade Agreement) and a withdrawal notice could come at any time. Conversely, another unnamed White House official said there has been no change in President’s Trump’s position on NAFTA. Nonetheless, the Bloomberg implied odds of a Canadian rate hike for this month has dropped 14ppt to c73% and the CADUSD weakened 0.67%.

This morning in Asia equities are modestly lower. The Nikkei (-0.44%), Kospi (-0.26%), China’s CSI 300 (-0.30%) and Hang Seng (-0.20%) are down as we type. In China, Premier Li said the country’s economy expanded by about 6.9% in 2017 (vs. 6.8% for 4Q expected). If confirmed later on 18 January, this would mark the first full year acceleration since 2010. Back in the US, during a Q&A sessions with reporters, President Trump noted the US has “some problems” with North Korea, but he does not expect a war and “hopefully, a lot of good things are going to work out” from the recent talks.

Now recapping other markets performance from yesterday. US equities softened even as the S&P pared back losses and closed marginally lower for the first time in seven days (-0.11%). Within the S&P, only the financials and industrials sectors were in the green while utilities and real estate stocks led the losses. European markets were mixed, with the Stoxx 600 (-0.38%) and DAX (-0.78%) modestly lower while the FTSE rose 0.23%, led by the financials.

Turning to currencies, the US dollar index initially fell c0.6% on the aforementioned China story but subsequent weakness in the Canadian dollar helped the Greenback to partly recover into the close (-0.18%). The Euro gained 0.09% and Sterling fell 0.24%. In commodities, WTI oil rose 0.97% after EIA data confirmed US crude stockpiles fell for the eighth consecutive week.

Elsewhere, precious metals strengthened slightly (Gold +0.31%; Silver +0.02%) while other base metals were mixed but little changed (Zinc -0.21%; Copper +0.11%; Aluminium +0.43%).

Away from markets and onto central bankers’ speak. The Fed’s Bullard said the Fed should consider targeting inflation above 2% for a period to make up for past misses on the low side. Elsewhere, he is a little bit sympathetic to the idea of price level targeting. The Fed’s Evans reiterated his dovish view, noting that “I don’t see any evidence of inflation moving up really fast or even moving up enough” and that “it would be good to sort of put off the (rate) increases until the middle of this year” to ensure the inflation concerns resolve themselves.

Conversely, the Fed’s Kaplan supports three rate hikes in 2018, in part as “… we want to avoid a situation where we have such an (economic) overheating that we’re playing catch-up”. Notably, none of the three Fed speakers are FOMC policy voters this year.

In Sweden, Riksbank governor Ingves said the central bank is “a little closer” in terms of changing its policy decision, but “is not there yet”. He also noted that it is possible that the bank could raise rates before the ECB does. The Swedish 10y yields rose 5.3bp back to November highs. Elsewhere, the leader of Japan’s opposition Democratic party Mr Ohtsuka noted that existing BOJ governor Kuroda should stay on for a second term. A potential reappointment is in line with our Japanese team’s expectation.

Back onto Brexit, unnamed (again!!!) Germany officials noted to Bloomberg that the UK may have to contribute more to the EU budget in return for a bespoke trade deal, particularly in regards to allowing UK based financial companies the ability to operate freely across the EU post Brexit,

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the final reading of the November wholesale inventories was slightly above market at 0.8% mom (vs. 0.7%), while wholesale trade sales also beat at 1.5% mom (vs. 0.6% expected). The ratio of wholesale inventory to sales fell to a three-year low. Following the above, the latest Atlanta Fed’s GDPNow estimate of 4Q GDP growth has nudged up to 2.8% saar.

In France, the November IP was in line at -0.5% mom, but prior revisions meant the annual growth was slightly below market at 2.5% yoy (vs 2.6% expected), while manufacturing production was higher than expected at 3% yoy (vs 2.9%). In the UK, November IP was also in line at 0.4% mom but annual growth was higher at 2.5% yoy (vs 1.8% expected). Elsewhere, manufacturing production expanded for the seventh consecutive month, with annual growth above expectations at 3.5% yoy (vs 2.8%). Finally, its November trade deficit widened to -£2.8bln (vs. -£1.5bln), mainly driven by a jump in the deficit on goods to £12.2bn. In real terms, imports of goods rose 0.7% mom and exports fell 0.1% mom.

Looking at the day ahead, the Eurozone’s November IP and Italy’s retail sales are due, along with the December reading for the Bank of France industrial sentiment index. Over in the US, the December PPI (core 0.2% mom and 2.5% yoy expected) as well as the weekly initial jobless and continuing claims are also due. Onto other events, the minutes for the ECB December meeting will be out and the Fed’s Dudley will speak on US economic outlook. Elsewhere, the BOE will publish its 4Q credit conditions survey and China begins a three-day annual meeting to set the agenda for its anti-corruption work in 2018.

https://www.zerohedge.com/news/2018...ter-china-denies-fake-news-report-oil-tags-64
 

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WalMart Raises Starting Wage To $11, Provide One-Time Bonus In Response To Trump Tax Reform


by Tyler Durden
Thu, 01/11/2018 - 08:18


Add Wal-Mart to the growing list of companies boosting employee compensation in the aftermath of the passage of Trump's tax reform.

In a just released press release, Wal-Mart Stores announced it is boosting its starting hourly wage to $11, expanding maternity and parental leave benefits and providing a one-time cash bonus for eligible associates - those who have been with the company at least 20 years - of up to $1,000, capitalizing on the U.S. tax overhaul to stay competitive in a tightening labor market.

The company said that the increase wil take effect in February next month and will cost approximately $300 million incremental to already planned wage hikes. The one-time bonus of up to $1,000 is based on seniority and will amount to an additional $400 million. The company is also expanding its maternity and parental leave policy and adding an adoption benefit.

Walmart CEO Doug McMillon said that “we are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders. However, some guiding themes are clear and consistent with how we’ve been investing -- lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S."

As Bloomberg adds, Wal-Mart, the nation’s largest private employer, has fought in recent years to improve its image in the U.S., as it weathered criticism over its treatment of employees. With the wage increase and bonus payment, the world’s biggest retailer seeks to even its pay gap with resurgent rival Target Corp., while simultaneously sending a high-profile thank you to the U.S. government for slashing the corporate tax rate.

The full release can be found here.

https://www.zerohedge.com/news/2018...vide-one-time-bonus-response-trump-tax-reform