The Paragon Offshore drillship PARAGON DPDS1 (former Noble Phoenix) broke its moorings and ran aground during Hurricane Harvey near the entrance to the port of Corpus Christi, Texas. Picture taken August 31, 2017. U.S. Coast Guard/Petty Officer 2nd Class Cory J. Mendenhall/Handout via REUTERS
By Erwin Seba HOUSTON, Aug 31 (Reuters) – Oil refiners and port facilities in Corpus Christi, Texas, are making strides resuming operations but Houston and other Gulf Coast energy hubs are still flooded by Hurricane Harvey, officials said on Thursday.
Their efforts – which could take weeks to be fully complete – will need to be repeated across a broad swath of coastal Texas and Louisiana before America’s oil and fuel production can fully recover from deep cuts caused by the storm’s record flooding.
Power has been restored to all four Corpus Christi-area oil refineries and the Army Corps of Engineers is conducting final surveys of the port’s waterways before fully reopening early next week, according to port officials.
“We are keeping our target of a full reopen by Sept. 4,” said Patricia Cardenas, a port spokeswoman.
Corpus Christi Overflight:
Refiners Citgo Petroleum Corp, Flint Hills Resources and Valero Energy Corp are moving to restart their plants in Corpus Christi, as is the nearby Valero Three Rivers refinery, according to sources, company officials and filings.
All were shut by Aug. 25, hours before Harvey roared ashore just north of the city with winds over 130 miles per hour (209 km per hour). Those four plants together have a capacity to refine 835,979 barrels of crude oil per day, or 4.4 percent of the nation’s total.
Nearly a quarter of U.S. refining output is offline in the wake of the storm, as other plants in Texas and Louisiana also shut.
On Thursday, the U.S. Coast Guard began allowing vessels with up to 43 feet (13.1 m) to enter the city’s port during daytime hours. Such vessels are able to hold about 500,000 barrels of oil. The Intracoastal Waterway between Corpus Christi and Brownsville, Texas, also is open, it added.
“Getting that port up and running is just so important,” said Cleo Rodriguez Jr., president and CEO of the United Chamber of Commerce of Corpus Christi. “It is the economic engine for the entire region.”
Some $100 million of goods typically moves through the port daily, according to port officials.
Rodriguez said he felt lucky Corpus Christi did not receive worse damage from Harvey, which was the most powerful storm to strike the state since 1961.
“Our member businesses have reported significant losses here, but so far nothing huge or catastrophic,” he said. “Our neighbors, like Rockport, were not so lucky. There was complete devastation there.”
He said he expected Corpus Christi business to mostly recover by the end of September. (Writing by Richard Valdmanis; Editing by Lisa Shumaker)
Update: The U.S. Coast Guard said on Thursday that it has reopened the Port of Corpus Christi, Texas, and the ship channel for deeper-draft vessels, it said in a statement on Thursday.
The announcement came after the port and channel were shut for a record six days after storm Harvey swept through Texas and the center of the U.S. energy sector. The reopening will allow seven local refiners to resume operations.
The first vessel will transit the port on Thursday afternoon, according to a statement from the port. It added that more than 20 vessels were awaiting berth assignments.
At the moment, vessels only up to 43 feet (13 meters) in draft will be able to transit the port.Shipping sources estimate that is the equivalent of a vessel containing around 500,000 barrels of oil. The port’s channel is typically 45 feet (14 meters).
The restrictions also call for daylight-only transits. A number of other Texas ports remain closed.
(Reporting by Catherine Ngai and Marianna Parraga; Editing by Alistair Bell)
Streamed live 1 hour ago
We are political scientists, editorial engineers, and radio show developers drawn together by a shared vision of bringing Alternative news through digital mediums that evangelize our civil liberties.
So the American Institute of Certified Public Accountants (AICPA) recently posted the results of an interesting survey of business executives from across the U.S. business landscape. And wouldn’t you know it: a variety of industries are starting experience what’s been a long-term problem for trucking companies.
They can’t find enough skilled workers.
[Oh sure: many folks argue that driving a commercial truck isn’t “skilled work.” I beg to differ – big time. And I’m not alone in taking that view.]
According to the third-quarter AICPA Economic Outlook Survey, which polled nearly 1,000 CEOs, CFOs, controllers and others, there is “a dark cloud” on the horizon: the growing scarcity of suitable job candidates.
For the first time in this particular poll, “availability of skilled personnel” got cited as the top challenge facing companies, up from the second spot last quarter. In fact, 75% of respondents said they were seeing at least some increased competition in recruitment efforts, with 21% reporting a significant increase.
At the end of 2014, the last time this survey question was asked, only 16% said they were experiencing a significant increase in hiring competition.
“One out of five business executives said their company has lost out on top job candidates because of increased competition, and a majority said they’re having trouble finding the right candidate to begin with,” according to AICPA’s Arleen Thomas, in a statement. “For some companies, the scarcity of skilled workers could have an impact on productivity and growth over time.”
Yet despite the challenges noted in AICPA’s survey, half of business executives polled said their companies had the right number of employees. Nearly one-in-four (24%) added that they planned to hire immediately, the same as last quarter, while another 15% said they had too few employees but were hesitant to hire.
Business executives who said their companies had too many employees dropped from 8% to 7%, quarter over quarter, AICPA noted.
On top of that, 64% of those business executives polled said they were optimistic about the 12-month prospects for the U.S. economy, the same as last quarter.
Revenue and profit expectations also returned to levels from the start of the year after dipping last quarter, AICPA added, with business executives now expecting revenue growth of 4.3% over the next 12 months, up from 3.9%, while profits are expected to grow 3.5%, up from 3.2% last quarter.
A few other findings unearthed by the group’s survey include:
64% of business executives expressed optimism about their own companies’ prospects over the next 12 months, up two percentage points from last quarter.
The percentage of business executives who expect their company to expand in the coming year increased from 64% to 65%, quarter over quarter, but remains below the level reported at the start of the year (67%).
Besides ‘availability of skilled personnel,’ the top three concerns for business are ‘regulatory requirements and changes’ at number two and ‘domestic competition’ at number three. ‘Employee and benefit costs,’ meanwhile, dropped from the top slot last quarter to number five this go around (though that remains a big concern in trucking, to say the very least).
Interest rate concerns fell from 22% last quarter to 15%.
Information technology remains the strongest category for planned spending over the coming year, with an expected growth rate of 3.5%. That’s not surprising when you think about the growth in cybersecurity concerns in the logistics and transportation sector.
We’ll have to see how other businesses solve their skilled worker shortage going forward. Maybe trucking can learn a few tricks along the way to help find and keep more drivers as part of that process.
By Bloomberg News (Bloomberg) — State-owned conglomerate China Merchants Group is exploring acquisitions of offshore rig operators, which have struggled to recover from a collapse in oil-industry spending, people with knowledge of the matter said.
As part of this analysis, the Chinese firm has looked at various assets and companies including Seadrill Ltd. and Shelf Drilling Ltd., the people said, asking not to be identified as the information is private. Deliberations are at an early stage, and China Merchants hasn’t made any formal offers, according to the people. It may opt to pick off assets as opposed to full takeovers, the people said.
China Merchants Group hasn’t yet finalized the exact structure of any potential deals and could decide against pursuing the purchases, according to the people. A full takeover of Seadrill would be difficult given the company’s debt restructuring, which could impact the timing of any transaction, one of the people said.
China Merchants Group said in an emailed statement the company hasn’t considered buying offshore drilling operators such as Seadrill and Shelf Drilling. A representative for Seadrill declined to comment, while Shelf Drilling didn’t immediately respond to requests for comment.
Shares of Seadrill, which has said it may file for Chapter 11 bankruptcy protection, rose as much as 158 percent in Oslo trading on Friday. That’s the biggest intraday gain since 2005.
Consolidation in the oil services sector is picking up as the slide in oil prices forced clients to rein in spending and defer large projects. Crude oil prices have fallen by about half over the past three years as a supply glut hurts spending across the industry.
“The offshore drilling industry needs to consolidate in order to address the massive overcapacity issues it faces,” said Elvis Pellumbi, London-based chief investment officer at CF Opportunity Fund, which invests in energy companies. “The recently announced deals are great examples of fantastic industrial logic and great value for both buyers and sellers. There will be more such deals in the next few months.”
Ensco Plc agreed to buy rival Atwood Oceanics Inc. in an all-stock deal valued at about $863 million in May. Transocean Ltd. agreed to buy Songa Offshore in a $3.4 billion deal last month.
Seadrill, controlled by billionaire John Fredriksen, has been working for more than a year to relieve billions of dollars of debt incurred when crude prices started dropping in 2014. The company has warned that the restructuring will likely involve filing for Chapter 11 and that shareholders will suffer steep losses.
Shelf Drilling reported a first-half net loss of about $33 million this month, down from a profit a year earlier, as revenue declined and it took an impairment charge on its assets. Its shares have fallen 15 percent in Norwegian over-the-counter trading over the last 12 months, giving the company a market value of 5.32 billion kroner ($684 million).
Hong Kong-based China Merchants Group runs businesses spanning ports, toll roads and shipping to real estate, financial services and offshore engineering. Its total profit rose 34 percent to 111.2 billion yuan ($16.9 billion) in 2015, according to its website.
The company’s China Merchants Industry Holdings Co. unit makes semi-submersible rigs and other offshore equipment at facilities in eastern China’s Jiangsu province and the southern coastal city of Shenzhen. China Merchants Group is also a minority shareholder in the parent company of CIMC Raffles, which builds drilling platforms used by oil producers including China National Petroleum Corp.
Rogue Money Radio: Guest Mr. X Talking about Dark Web, Civil Liberties ROGUE MONEY
Streamed live 1 hour ago
We are political scientists, editorial engineers, and radio show developers drawn together by a shared vision of bringing Alternative news through digital mediums that evangelize our civil liberties.
Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Almost 3% and 4% on the Week By: Chris Mullen
Gold fell $5.60 to $1317.80 in Asia before it popped up to $1328.70 after the release of this morning’s jobs data and then dropped back to $1316.60 in the next 2 hours of trade, but it then rallied back higher into the close and ended with a gain of 0.17%. Silver rose to as high as $17.74 and ended with a gain of 0.54%.
A major shift is transpiring in the markets, silver guru David Morgan tells Silver Doctors.
The gold mining shares are leading the bullion. This is extremely bullish, says Morgan. And the stock market is topping. He sees the stock market will pull back in the next few months. Dubin expects a 10% correction by the end of the year. The bottom line: Money is moving out of the stock market and into the gold market.
Morgan and Dubin both think gold could hit $1400 by the yearend.
The U.S. Coast Guard conducted several overflights Thursday to assess the damage to ports along the Texas Gulf Coast in the aftermath of Hurricane Harvey as many of the affected ports began opening.
Hurricane Harvey has significantly impacted the entire Texas coast, home to petroleum refining centers in Corpus Christi, Houston, Port Arthur, Beaumont, and Lake Charles Louisiana. The storm forced many to either completely shutdown or significantly scale back operations.
As of Friday, the Port of Houston resumed partial operations after being closed for nearly a week due the storm. The Port of Houston Authority said both the Barbours Cut and Bayport container terminals resumed operations on Friday, with three vessels waiting to come into Barbours Cut and one for Bayport as of early Friday morning.
Below is Friday’s update from the Port of Houston Authority:
Port Houston Barbours Cut and Bayport terminals have resumed operations.
Gates are open Friday, 0700 – 1700, in-gate closing at 1600. Vessels will be worked as they are cleared for transit.
Port Houston Turning Basing Facilities: Both Upper level and Lower level road are open for operations.
Jacintoport: Open for business
Labor Day, Monday, Sept. 4th: Vessels will be worked at Port Houston Container Terminals. Gate operations TBA.
Over the last week, several vessels have ended up skipping Houston altogether. A FAQ said seven containerships omitted Bayport while five containerships omitted Barbours Cut. As for damage to Port Houston container terminals, the port authority said there is no evidence of flooding at the terminals and no visible damage to containers, cranes, or other terminal equipment.
In a news conference late Thursday, Janiece M. Longoria, chairwoman of the Port of Houston Authority, said heavy current into the Houston Ship Channel at the Port of Houston was making it unsafe to bring in vessels.
As Friday Coast Guard Port Conditions at Houston-Galveston were set to “OPEN WITH RESTRICTIONS”. All vessels transits are being limited to daylight hours and the following draft restrictions are currently in place:
Freeport: Draft restricted to 33 feet or less.
Galveston: Draft restricted to 33 feet or less.
Houston: Draft restricted to 37 feet or less.
Texas City: Draft restricted to 33 feet or less.
In the Port Arthur and Lake Charles area, which includes the port of Beaumont, the ports remained closed as of Friday.
Some aerial photos of the damage to other facilities located on the Houston Ship Channel are below (keep scrolling for update on Corpus Christi and Brownsville):
The above picture appears to show Southwest Shipyard’s facility on Brady Island, located on the Buffalo Bayou which flows into the Houston Ship Channel and Galveston Bay.
Further south, the ports of Corpus Christi and Brownsville continue to recover from the storm as well.
The Coast Guard assessed damage and offered search and rescue assisitance during an overflight from Port Aransas to Port O’Connor, Texas, Aug. 26, 2017.. U.S. Coast Guard Photo
The Paragon Offshore drillship (the former Noble Phoenix) which at the entrance to the ship channel in Port Aransas, leading to Corpus Christi, is still aground as of Friday. You can see the drillship off to the side in the video below showing the arrival of the first vessels into Corpus Christi on Friday.
The Port of Corpus Christi has been open since 2:15 PM, August 31, 2017, but restricted to vessels with a draft no greater 43 feet. In addition, all foreign registered vessels 100 gross registered tons or larger, all domestic tank vessels 10,000 gross registered tons or larger, and all domestic non-tank vessels 1,600 gross registered tons or larger must conduct one way transits only; have a minimum of 2 pilots for each transit; and transit during daylight hours only.
As of Thursday’s update, the Port of Brownsville was open with no restrictions.
“Mariners are advised that although some channel surveys have been conducted, the Coast Guard has not completed channel surveys of all inlets, harbors and channels to confirm safe transit,” the Port of Christi said in an update. “Mariners are to proceed with caution as navigational aids may be missing or off station and debris, shoaling and hazardous substances may be present. All other waterways of the COTP zone remain closed.”
Mariners are reminded that the Corpus Christi Inner Harbor Security Zone (33 CFR 165.809) remains in effect during severe weather and therefore recreational, commercial fishing and passenger vessels are not permitted to enter the security zone without permission of the U.S. Coast Guard Captain of the Port. Vessels must have a prearranged agreement with the COTP to enter the Inner Harbor.
Below is a video of Thursday’s flyover of the port of Corpus Christi area.
Bill Holter – Ending Will Be Financial Collapse Where Credit Stops Greg Hunter
Published on Sep 3, 2017
The price of gold and silver has been going up recently. Financial writer Bill Holter, a precious metals broker, says price is irrelevant to the average investor. It is possession that is most important now. Holter explains, “I think the streets are going to be completely cleaned of gold and silver, and they are going to go ‘no offer.’ There will be bid, bid, bid and higher, higher, higher, and there won’t be any for sale. Gold and silver will go into hiding until new currencies come out that can be trusted. I think that’s where we’re headed. You should buy it now because it’s available. At some point in time, it’s not going to be available, and you are either going to have it or you won’t. The price won’t matter. You will count your wealth in ounces.”
In closing, Holter contends, “The timing on this is who knows? September or October or next year, I don’t know. I do know what the ending is. The ending is a financial collapse where credit stops and people figure out the asset they hold is someone else’s liability. . . . Why not have an asset with no liability, which is gold and silver.”
Join Greg Hunter as he goes One-on-One with Bill Holter of JSMineset.com.
Your Immediate Economic Risk vs. 2008 Collapse? | Kerry Lutz: Financial Survival Network Reluctant Preppers
Published on Sep 2, 2017
Surrounding the Lehmans Brothers collapse of 2008, the managers of our financial world were, in their own words, "standing on the precipice and staring into the abyss," and narrowly evaded a total economic collapse. After almost a decade of unprecedented stop-gaps: zero and negative interest rates, exchange stabilization, and plunge protection, how does today's risk stack up? Are your retirement accounts any safer now than during the largest bank bailout of all time, or is your nest-egg truly in much greater peril?
Kerry Lutz, Founder and host of The Financial Survival Network, returns to Reluctant Preppers to offer his perspectives on the direction and major upcoming triggers we need to prepare for in the financial world that WILL impact our economic lives!
Why did Lutz start the Financial Survival Network, and how has this shaped his mission today?
Why does the educational system always let the people down about what’s really happening?
Gold broke $1300/oz resistance - where are those in the know putting their money?
World Economic Status - are we better off than in 2008?
- Debt much worse
- International trade down
- Workforce participation rate worse
- Homelessness, food stamp dependency
- Social Unrest, Crime, - officially sanctioned? sponsored? funded? organized?
- Confidence in institutions of society greatly reduced (Police, government, press..)
Independent Media Punished for not propagating the dominant narrative.
- “Fake News” label
- Viral video publishers being demonetized, put out of business
- Trend has always been: pay the content creator less
- All major alternative media platforms starving out - Book “Viral Podcasting” - you are a brand, how to make your podcasts go viral
- “Common Carriers” - where can we go for unbiased media? Vimeo, other search engines
How to protect yourself:
- READ your news, don’t get it spoon fed to you by video.
- Core physical precious metal holding as insurance against catastrophic loss
- Bitcoin as possible digital reserve currency
- Emergency preparedness in your home
Colorado Scattershots By: John Mauldin
Ask a child what he or she wants to be when they grow up, and you’ll probably get a standard answer: firefighter, doctor, teacher – all occupations we learn to recognize at an early age. Rarely do you hear a young one say, “I want to be a writer.” I don’t recall ever saying it. Yet here I am, with writing as one of my several occupations.
DISCLAIMER: The financial and political opinions expressed in this video are not necessarily of "Finance and Liberty" or its staff. Opinions expressed in this video do not constitute personalized investment advice and should not be relied on for making investment decisions.
Having started off with a sharp gap lower following Sunday's news of the latest, 6th nuclear test by North Korea, global stocks and US futures pared losses in the overnight session, despite reports of North Korean preparations for yet another missile launch, while the yen trimmed its risk-off gains even as gold kept its upside and the South Korean Kospi closing 1.2% lower, with traders asking whether "this time will be different:, or inversely, will today's market reaction will be a carbon copy of what happened last Monday, when stocks gapped sharply lower on North Korea missile launch fears, only to surge 1% by the end of the week, as shown in the chart below.
Still, concern that U.S. President Donald Trump has few viable options to rein in North Korea has disrupted a three-week-long rally in emerging markets, sending stocks to the biggest loss since Aug. 11: The MSCI index of world stocks dropped 0.7%, led by consumer-discretionary and industrial-goods sectors, as the relative strength index, a measure of momentum, fell to 60 from 68 on Friday.
The South Korean Kospi extended declined at the close, down 1.2% after Yonhap reported South Korea had detected North Korea’s preparation for an ICBM missile launch. The index fell as much as 1.7% at the open Monday before paring back some of its decline to a 0.9% drop; volatility among South Korean stocks surged as much as +15%, although absent further escalation, that spike will likely be faded in the coming days.
Europe's Stoxx Europe 600 Index declined, with all industry sectors in the red, after a Monday morning report from Yonhap that Pyongyang is preparing to launch an intercontinental ballistic missile heightened investors’ unease. European equity markets opened lower and stay within a tight range, with tech and banking lagging.
Both USD/JPY and U.S. equity futures fell, but have stayed within overnight ranges and in the case of the Yen, much of the latest gains have been unwound, while European government bonds advanced and Swiss franc led currency gains.
The euro strengthened even as economists expect European Central Bank President Mario Draghi to express concern Thursday about the currency’s rise. Industrial metals including copper and nickel extended a rally. US Treasuries and bund futures briefly hit session highs on Korean concerns before fading. The German curve steepened, with focus on upcoming supply this week.
Having surged to the highest level since the Trump election victory, spot gold edged modestly lower from overnight high, tagging $1,334 in early trading.
Currencies, as a group, erased losses thanks to an advance in offshore yuan; otherwise, most currencies are lower against the dollar.
Meanwhile, China’s onshore yuan extended gains to a 15-month high as North Korea’s nuclear test failed to dent bullish sentiment on the currency. The Chinese exchange rate traded in Hong Kong’s overseas market rose for a 14th day, the longest rally on record. In onshore markets, the CNY climbed 0.5% to 6.5245 per dollar; the currency climbed 1.35% last week, the strongest showing in CFETS data going back to April 2007. The PBOC strengthened the yuan reference rate by 0.37%, the most since Aug. 10, to 6.5668 against the greenback.
It wasn't just the Yuan that proved immune to Korean worries: shares in mainland China rose as strength in commodity producers outshone concerns about North Korea saying it successfully tested a hydrogen bomb over the weekend. Hong Kong’s benchmark fell for a third day. The Shanghai Composite Index rises 0.4%, most in a week, to 3,379.58
What happens next for global risk is in the hands of China and the US as the North Korean conflict is rapidly escalating into a proxy war of the world's two most powerful nations.
US markets are closed on Monday for holiday.
Top Overnight Headlines
South Korea has continued to detect preparations related to another ICBM launch by North Korea according to a Defense Ministry official
Trump says U.S. considers new sanctions, stopping all trade with any country doing business with North Korea; Mattis says ’many military options’ available
Mnuchin says debt limit hike should be linked to Harvey aid
China says using force to resolve the North Korea issue isn’t an option: Reuters
China says U.S. President Trump’s trade threat over North Korea is "unacceptable" and "unfair"
U.K. government has proposed extending the next round of Brexit negotiations on a rolling week-by-week basis until breakthrough is reached on financial settlement according to people familiar: Politico
U.K. Aug. Construction PMI: 51.1 vs 52.0 est; weakest reading since July 2016, Markit note reduced levels of commercial building
U.K.’s Davis dismisses reports of GBP50 billion EU payment as ’nonsense’
Portugal outlook changed to positive from stable by Moody’s
Ex-PBOC adviser urges free float of yuan rate: Securities Journal
In European equities, risk-off sentiment following North Korea's nuclear test has hit European shares in early trading this Monday, with all sectors in negative territory, led by financials. In regards to stock specific movers, Fiat Chrysler are down around 3 percent after its CEO said that Fiat had received no offer for the firm.
In fixed income, EGB's trading a better levels following the aforementioned newsflow out of North Korea. Peripheral bonds outperforming against their German counterpart as spreads tighten. Eyes could be on the performance of PGB's vs. Bunds after Moody's placed Portgual's sovereign rating on positive outlook, as such a possible upgrade to investment grade from junk may see the spread narrow to YTD lows at mid-220bps.
In currencies, JPY/CHF: Safe haven flow dominating sentiment to begin the week, which came after reports that North Korea successfully launched its most powerful so-called H-Bomb to date. In turn, USD/JPY slipped to the mid-109s while USD/CHF broke through 0.96 as risks are seemingly skewed to the downside as markets digest and monitor the situation. Aside from the tensions on the Korean Peninsula, concerns over the US debt limit will keep a lid on risk appetite, providing further headwinds for the greenback. The soft NFP report on Friday and dampened risk sentiment has underpinned EUR this morning. Although the currency remains below 1.1900 as the ECB meeting is likely to cap near term gains as speculation mounts over potential comments from Draghi and Co. regarding the recent appreciation in EUR.
In commodities, WTI and Brent crude futures slipping this morning, more notably in Brent as WTI is somewhat supported as several refineries resume activity. RBOB gasoline futures easing after emergency stocks had been released amid early indications that the damage to infrastructure were not as bad as initially feared.
* * *
DB's Jim Reid concludes the overnight wrap
With August behind us and the weather here in the UK yesterday already starting to resemble autumn it feels like the final push into the end of the year is well and truly on. This week should be an interesting one with the highlight likely coming this Thursday with the ECB meeting. We aren’t expecting any policy announcements - indeed our economists expect Draghi’s strategy to be one whereby he and the ECB wrap the QE exit step in dovishness when it is announced in October – but the risk is perhaps that Draghi says very little at all and buys even more time for the ECB. In this regard, what Draghi does or doesn’t say about the euro is what most in the market will probably be looking out for. It feels like the consensus expect Draghi to address the recent appreciation but we’d imagine that he will probably have to also strike a bit of a delicate balance given that the data is holding up pretty well still. Draghi’s job was perhaps made ever so slightly easier by that fact that the single currency closed on Friday 1.75% off Tuesday’s highs but it is still up 3.50% since the ECB last met back in July.
Anyway that is for Thursday. In the meantime, it feels like déjà vu writing this again this morning as the weekend headlines are once again dominated by the latest North Korea missile test. Yesterday’s test was called a “perfect success” by the Korean Central News Agency with the underground explosion supposedly ten times more powerful than previous detonations. The explosion also caused a magnitude 6.3 earthquake and all the talk is that the test has reached new ground in terms of potential magnitude and power. President Trump responded to the latest test by saying that “the United States is considering, in addition to other options, stopping all trade with any country doing business with North Korea”. Treasury Secretary Mnuchin confirmed that he is drafting a sanctions package to send to Trump and Defence Secretary Mattis said that the US has “many military options” when questioned about a possible response. Other world leaders also had their say. Germany Chancellor Angela Merkel said that North Korea’s latest actions had reached a “new dimension” while Russia’s Putin and China’s Xi Jinping also responded and agreed to “appropriately deal with” the latest test. An emergency UN meeting has been called for today.
The latest development has seen markets in Asia start the week with a risk-off tone although moves overall have been fairly modest still. In terms of safe havens, Gold is up +0.61%, while the Yen and Franc are +0.41% and +0.38% respectively. Equity markets across Asia are down with the Nikkei (-0.86%) and Kospi (-0.79%) standing out the most, while the ASX 200 (-0.49%) and Hang Seng (-0.47%) are also in the red. Markets in China are flat.
It’s worth noting that the US is off today for the Labour Day holiday so we will have to wait until tomorrow to see how cash markets across the pond respond although S&P 500 futures are down around -0.32% as we go to print. In terms of other news from the weekend, in Germany, Merkel and her Social Democratic opponent Martin Schulz took part in a TV debate where they clashed over refugee policy with Merkel standing by her view on keeping the country’s borders open and Schulz attacking Merkel for her early response to the refugee crisis in 2015. This was actually the only live TV debate between the two leaders before the election on September 24th and the latest polls show Merkel as holding a roughly 13-14% lead over Schulz after the latter had at one stage closed that gap completely earlier in the year. According to Bloomberg two flash polls released after yesterday’s debate were scored a draw and a Merkel win.
Elsewhere, here in the UK, Brexit Secretary David Davis called a Sunday Times report suggesting that PM Theresa May was to approve a £50bn Brexit Bill as “nonsense”. The report also suggested that May won’t disclose any details on kick starting trade talks until after the Tory Party conference in October. Conversely, EU negotiator Barnier said the British people need to be “educated” about the price they will pay for quitting the EU.
Meanwhile in the US it’s worth noting that Congress will return from the August recess on Tuesday with the debt ceiling debate almost certain to be front and centre. Over the weekend Mnuchin noted that the debt limit should be linked into a package of relief for victims of Tropical Storm Harvey. The suggestion on Friday was that the House could plan a vote on funding as a standalone bill this week but the latest comments suggest that this is less likely now. Assuming lawmakers don’t get in the way of relief efforts, one would imagine that this perhaps lowers the risk around the debt ceiling as time ticks down towards the end of month deadline.
Now just recapping the macro data on Friday. In the US, the main focus was a softer than expected August employment report, with the change in nonfarm payrolls coming in at 156k (vs. 180k). Adding to the disappointment, the unemployment rate was a tad higher at 4.4% (from 4.3%) and average hourly earnings rose just 0.1% mom (vs. +0.2% expected), leaving growth at +2.5% yoy.
However, we would still characterize the labour market as being in solid shape and note that the August reports can be impacted by difficulties in seasonaladjustment around the holiday period. Further, our US economics team notes that they would not be surprised to see subsequent positive revisions (since 2010, August payrolls have been revised up by +55k on average between the initial and third prints). Elsewhere, the August ISM manufacturing was higher than expected at 58.8 (vs 56.5 expected), marking the best reading since March 2011. Moving along, the University of Michigan consumer confidence print was softer than expected at 96.8 (vs 97.5) but the final Markit US manufacturing PMI was revised up slightly to 52.8 from 52.5.
In Europe, UK’s manufacturing expanded at the strongest pace in four months, with the August PMI at 56.9 (vs. 55.0 expected). In Italy the manufacturing PMI was also higher than expected at 56.3 (vs. 55.3 expected) while the final reading for 2Q GDP was confirmed at +0.4% qoq and +1.5% yoy. Elsewhere, other final Markit manufacturing PMIs were broadly in line with the flash estimates, with the Eurozone at 57.4 and France at 55.8, but Germany was a tad lower at 59.3 (vs. 59.4 flash).
By the end of play markets ended slightly firmer with the S&P 500 closing +0.20% and Stoxx 600 up +0.60% driven by gains in mining names. Bond yields rose in the US and Europe, with UST 10y up 5bp to 2.166% and core European bond yields up around 2bps. The US dollar index was broadly unchanged on Friday and has dipped 0.20% this morning. Elsewhere, WTI oil edged up 0.3% and US gasoline prices fell 1.8% on Friday (first decline in the week) and have fallen a further 2.8% this morning.
Taking a step back, it’s worth noting that the current rally in the S&P 500 is the 3rd longest since WWII without a 3% selloff, but our asset allocation chief strategist Binky Chadha remains constructive. He noted that the market remains overdue for a pullback and rising domestic and geopolitical risks provide plenty of potential catalysts. But as in past episodes, he views the economic and market context dominating. On the economic front, Binky sees further upside to global growth, with PMIs having further to recoup pre dollar and oil shock levels, a strengthening in the US labour markets and capex, while Binky also expects earnings growth to sustain in the double digits. On the market front, he sees the demand-supply picture for US equities becoming more supportive with inflows on a turn up in data surprises and higher rates as inflation picks up.
Asian Metals Market Update: September-04-2017 By: Chintan Karnani, Insignia Consultants
North Korea’s hydrogen bomb has given a hydrogen boost to gold and silver. Copper and industrial metals have had a technical breakout. The US dollar has remained immune to North Korea. The US Navy has increased patrols in South China Sea. East Asia is now the current middle east and north Africa of the world.
Rogue Mornings - China's Game Changer, N Korea Dilemma & Distractions (09/04/2017) ROGUE MONEY
Streamed live 3 hours ago
We are political scientists, editorial engineers, and radio show developers drawn together by a shared vision of bringing Alternative news through digital mediums that evangelize our civil liberties.
China Reset World’s Reserve Currency System: Oil Benchmark Backed By Gold Yuan Junius Maltby
Published on Sep 4, 2017
China Readies Yuan-Priced Crude Oil Benchmark Backed By Gold, China sees new world order with oil benchmark backed by gold
Yuan-denominated contract will let exporters circumvent US dollar WELCOME BACK TO THE JUNIUS MALTBY CHANNEL - China Begins To Reset The World’s Reserve Currency System, "The rules of the global oil game may begin to change enormously."
Channel Coin: https://qualitysilverbullion.com/prod...
**FAIR USE STATEMENT**
This video may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This material is being made available within this transformative or derivative work for the purpose of education, commentary and criticism, is being distributed without profit, and is believed to be "fair use" in accordance with Title 17 U.S.C. Section 107.
With the US markets closed today, market events this week will be dominated by G10 central bank meetings, among which the ECB stands out, but also notable will be the RBA, BoC and Riksbank. Consensus does not expect policy changes yet. There is also a busy calendar for the UK (PMIs, housing, IP and trade balance) along with GDP/IP releases elsewhere. In EMs, there will be monetary policy meetings in Brazil, Poland and Malaysia. Brazil BCB is expected to cut rates by 100bp.
Central bank preview:
The ECB remains trapped between a strong(er) EUR and a rapidly shrinking universe of monetizable bonds; as a result Draghi will emphasize the impact of a strong EUR on inflation dynamics but will refrain from disclosing the destiny of QE after the 2018 expiry. Given the recent EUR appreciation, the ECB will prefer waiting for the September FOMC before committing on QE. Most sellside desks call for the October meeting where BofA expects a 6m QE extension at €40bn/month.
The RBA is also expected to remain on hold with communication potentially getting more interesting now that forecasts and Parliamentary testimony are out of the way. On the longer term, the domestic housing market in particular to have a more significant influence on monetary policy with the balance of risks favoring rates up.
For the BoC, unexpectedly strong economic growth, below neutral o/n rates and the Fed on a hiking cycle means that the Canada should follow with a hiking cycle as well. This said, low inflation and inflation expectations along with CAD appreciation do not argue for urgency. As a result while some have said the BOC's meeting is "live", most expected the central bank to remain on hold in September and hikes +25bp in October.
In other data:
In the US, we get durable & capital goods orders (F), trade balance, ISM non-mfg and multiple Fed speakers in the agenda.
In the Eurozone, beyond the ECB, we have retail sales, industrial production and GDP.
In the UK, we have PMIs, industrial production, construction output, and trade balance.
In Japan, we have monetary base, PMIs, trade balance and final print of Q2 GDP.
In Canada, beyond central bank rates decision, we also have labor market report.
In Australia, focus is on RBA's rates meeting, while other economic releases include trade balance, retail sales, GDP, home loans and investment lending.
Below is a breakdown of key events by day, courtesy of Deutsche Bank:
It’s a quiet start to the week today with Eurozone PPI and the Sentix investor confidence reading the only data of note. With the US closed there is no data scheduled across the pond.
Onto Tuesday, Japan and China’s (Caixin) service and composite PMIs are due early in the morning. Then we have UK and Italy’s service and composite PMI for August. There is also the final readings for service and composite PMIs for the Eurozone, Germany and France. Elsewhere, the Eurozone’s retail sales and final readings for 2Q GDP are due. In the US, there is factory orders for July and final readings for durable goods and capital goods orders.
Turning to Wednesday, Germany’s factory orders for July is the only data due out. Over in the US, the ISM non-manufacturing PMI, the Fed’s Beige book, trade balance and final Markit services and composite PMI are also due.
For Thursday, Germany’s industrial production for July are due along with France’s trade balance and current account balance stats. Elsewhere, house price data in the UK and Q2 GDP (final revision) for the Eurozone is due. This is all before the ECB meeting around midday. Over in the US, there is initial jobless claims, continuing claims and final readings for Q2 nonfarm productivity due.
Finally, on Friday, Japan’s trade balance and current account balance along with final readings for 2Q GDP will be due in early morning. China will also release its August import / export stats. In Europe, Germany’s trade balance, current account balance and export / imports stats are due. In the UK and France, industrial production, manufacturing production and trade balance stats are also due. Over in the US, there is the final reading for wholesale inventories along with consumer credit data.
Away from the data, today we’ll have the second round of negotiations for NAFTA in Mexico. On Tuesday US congress returns from the August recess to tackle issues such as the debt ceiling. Elsewhere, Fed Governor Brainard, the Minneapolis Fed President Kashkari and Dallas Fed President Kaplan will speak at separate functions. Turning to Wednesday, UK PM Theresa May will face opposition leader Jeremy Corbyn in parliament and the IMF’s managing director Lagarde will speak at a conference in Korea. President Trump will also meet House Speaker Ryan, Senate Leader McConnell and a few others to discuss the coming debt ceiling. Then onto Thursday, in the UK, Brexit Secretary Davis faces questions in the House of Commons about the state of Brexit talks. In the US, Cleveland Fed President Mester and NY Fed President Dudley are schedule to speak. Elsewhere, the IMF Managing Director Lagarde, BOJ Deputy Governor and BOK Governor will meet for a two-day conference on growth in Seoul. Finally, on Friday, the Philadelphia Fed President Harker will speak on consumer behaviour in credit.
It is a quieter, holiday-shortened week in the US, where the key economic release this week is ISM non-manufacturing on Wednesday. There are several scheduled speaking engagements by Fed officials this week. Additionally, the Beige Book for the September FOMC period will be released on Wednesday. Here is a full breakdown of what to expect courtesy of Goldman:
Monday, September 4
U.S. Labor Day holiday. US markets are closed, and there will be no major data releases.
Tuesday, September 5
07:30 AM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will give a speech on the economic outlook and monetary policy at a breakfast hosted by the Economic Club of New York. There will be a live webcast of the speech, and audience Q&A is expected.
10:00 AM Factory orders, July (GS -3.3%, consensus -3.2%, last +3.0%); Durable goods orders, July final (last -6.8%); Durable goods orders ex-transportation, July final (last +0.5%); Core capital goods orders, July final (last +0.4%); Core capital goods shipments, July final (last +1.0%): We estimate factory orders declined 3.3% in July following a 3.0% increase in June – driven by a decline in commercial aircraft orders. Core measures in the July durable goods report were strong, with better-than-expected growth and upward revisions in core capital goods shipments.
12:30 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a moderated Q&A at an event hosted by the Carlson School of Management in Minneapolis. Audience Q&A is expected.
01:10 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will also give a speech at a town hall event at the University of Minneapolis. Audience Q&A is expected.
07:00 PM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated discussion at an event hosted by the Dallas Business Club. Audience and media Q&A is expected.
Wednesday, September 6
10:00 AM ISM non-manufacturing index, August (GS 56.0, consensus 55.5, last 53.9): Regional service sector surveys were stronger on net in August, with notable gains in the New York Fed (+12.4pt to +11.7), Richmond Fed (+10pt to +22), Philly Fed (+8.4pt to +31.8), and Dallas Fed (+4.6pt to +15.1) non-manufacturing surveys. We expect the ISM non-manufacturing index to rebound 2.1pt to 56.0 in the August report following a 3.5pt decline in July. Overall, our non-manufacturing survey tracker rose 2.2pt to 56.3 in August, suggestive of a solid pace of growth in business activity.
08:30 AM Trade balance, July (GS -$44.8bn, consensus -$44.6bn, last -$43.6bn): We estimate the trade deficit widened by $1.2bn in July. The Advance Economic Indicators report last week showed a wider goods trade deficit, and elevated export growth in recent months suggests scope for deterioration in the trade balance.
09:45 AM Markit US services PMI, August final (consensus 56.9, last 56.9)
02:00 PM Beige Book, September FOMC meeting period: The Fed’s Beige book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The July Beige Book noted that activity expanded across all districts, though the pace of growth varied. Labor markets continued to tighten, and wage pressures had risen since the prior report. In the September Beige Book, we look for additional anecdotes related to the state of consumption, price inflation, and wage growth.
Thursday, September 7
08:30 AM Nonfarm productivity (qoq saar), Q2 final (GS +1.4%, consensus +1.2%, last +0.9%); Unit labor costs, Q2 final (GS +0.1%, consensus +0.4%, last +0.6%): We estimate Q2 non-farm productivity will be revised up in the second vintage by 0.5pp to +1.4%, above the 0.75% trend achieved on average during this expansion. Similarly, we expect Q2 unit labor costs – compensation per hour divided by output per hour –to be revised down by 0.5pp to 0.1% (qoq saar).
08:30 AM Initial jobless claims, week ended September 2 (GS 250k, consensus 242k, last 236k); Continuing jobless claims, week ended August 26 (consensus 1,945k, last 1,942k): We estimate initial jobless claims rose 14k to 250k in the week ended September 2, reflecting a rise in Texas filings related to Hurricane Harvey. Continuing claims – the number of persons receiving benefits through standard programs – have declined in recent weeks, following an early-summer rebound.
12:15 PM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Federal Reserve President Loretta Mester will give a speech on the economic outlook and monetary policy at an event jointly hosted by the Economic Club of Pittsburgh, World Affairs Council, CFA Society of Pittsburgh, and the Association for Financial Professionals. Audience and media Q&A is expected.
07:00 PM New York Fed President Dudley (FOMC voter) speaks: New York Federal Reserve President William Dudley will give a speech titled “The U.S. Economic Outlook and the Implications for Monetary Policy” at an event hosted by the Money Marketeers of New York University. Audience Q&A is expected.
07:00 PM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Federal Reserve President Raphael Bostic will take part in a moderated Q&A session on his views about the U.S. economy at an event hosted by the Atlanta Fed.
08:15 PM Kansas City Fed President George (FOMC non-voter) speaks: Kansas City Federal Reserve President Esther George will give a speech on the U.S. economy and monetary policy at the Omaha Economic Forum in Omaha, Nebraska. Audience Q&A is expected.
Friday, September 8
8:45 AM Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Federal Reserve President Patrick Harker will give a speech on “Consumer Finance Issues” at the New Perspectives on Consumer Behavior in Credit and Payments Markets Conference in Philadelphia.
10:00 AM Wholesale inventories, July final (consensus +0.4%, last +0.6%)
03:00 PM Consumer credit, July (consensus +$15.0bn, last +$12.4bn)
All Credit, Rights, and Thanks to original creators and designers for any and all clips, footage, and/or commentary used in the making the final fair use design, commentary, and/or Compilation Videos. Please note Under Section 107 of the Copyright Act of 1976, allowance is made for "fair use" for purposes such as criticism, commentary, news reporting, teaching, scholarship, and research. Fair use law is permitted by copyright statute 17 U.S.C. 106A that might otherwise be infringing.