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SpaceX Rocket Carries New Cubed Satellites That Will Hunt ‘Dark Ships’
November 30, 2018 by Bloomberg


Image courtesy HawkEye 360

By Kyle Stock (Bloomberg) — If all goes as planned with the scheduled SpaceX launch Sunday, a startup called HawkEye 360 will have a trio of satellites resembling toaster ovens circling the globe, scanning for pirate radio.

The Washington-area company is one of 35 paying customers strapped to the top of the Falcon 9 rocket, a crowd of cosmic enterprises boldly pushing the private sector into parts of the universe that were once solely the province of sovereign space agencies. The passenger list includes a Honeywell satellite to relay messages from tankers at sea, a company called Audacy that is building a system to speed communication among satellites, and the Nevada Museum of Art, which is launching an orbiting sculpture meant to be visible from Earth.

The HawkEye mission, meanwhile, is a bit more subtle—and lucrative. While space is full of satellites snapping pictures of the planet, the company said it will be the first commercial operation to capture radio frequency feeds down below.

“I spend as much time pitching the paradigm—the idea—as I do pushing Hawkeye itself,” said founder Chris DeMay. “It’s not necessarily intuitive to those who don’t come from the government, because [radio frequency] is not inherently visual.”

DeMay used to help the U.S. government do this kind of thing during his tenure at the National Reconnaissance Office. A few years ago, he realized that the growing crop of small satellites—or cubesats, as they are called—could accomplish missions similar to what’s being done by larger, more expensive government hardware.

The company he formed in 2015 had a simple pitch to government agencies: “We convert a capital expense to an operation expense.” Raytheon Co., the giant defense contractor, was an early investor and customer. It has engineers working with Hawkeye’s 31-person team and, in turn, will sell some of the company’s findings to its own government customers.


Sunday’s launch (it’s been rescheduled twice) will be the 18th mission by Elon Musk’s rocket fleet this year, and the first time such a large vehicle was entirely dedicated to ride-sharing. SpaceX split the $62 million cost among dozens of small clients, rather than NASA or some other major satellite operator. (The launch had originally been scheduled for earlier this month but was delayed.)

Once aloft, Hawkeye’s three satellites will be able to triangulate and pinpoint any given radio signal. Eventually, the company hopes to have 10 separate, three-satellite flocks zooming around the globe. With that much hardware, it will be able to scan any part of the world in less than 30 minutes. “It’s going to move pretty darn quickly once we have live data from space,” DeMay said.

So why is this important? “If you kind of look at the art of the possible … you can understand how that could be very beneficial for customers like Homeland Security or Coast Guard,” said Jane Chappell, Raytheon’s vice president of global intelligence solutions. In any type of conflict, or for law enforcement, the ability to zero in on people you might not otherwise see becomes a valuable—if perhaps Orwellian—product. Chief Executive Officer John Serafini said about half of HawkEye’s demand will come from defense and intelligence clients, with the rest coming from a mixed bag—ranging from rescue groups searching for emergency beacons at sea to telecommunications companies eager to map bandwidth use.

The first order of business, however, will be catching pirates. Smugglers and other wrongdoers of the high seas regularly turn off their GPS transponders to avoid tracking. Instead, they use satellite phones and CB radios to coordinate with other ships or confederates on land, all of which will whisper to the Hawkeye toasters soaring overhead.

“They told me what they wanted to do, and I thought ‘Is that possible?’” recalled Robert Tremlett, a maritime analyst and former merchant marine. Tremlett spent much of his career escorting minesweepers and military ships near Iraq and Iran. Often, on those missions, a very expensive and sophisticated plane flew overhead to keep an eye out for dark vessels laying mines. HawkEye will be able to perform a similar service at a fraction of the cost.

“I see this as part of a solution to a massive problem,” Tremlett said.

© 2018 Bloomberg L.P

https://gcaptain.com/spacex-rocket-carries-new-cubed-satellites-that-will-hunt-dark-ships/
 

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Spoils of Trade War: Argentina Loads Up On Cheap U.S. Soybean
November 30, 2018 by Reuters


By Tappasan Phurisamrit / Shutterstock




By Hugh Bronstein and Karl Plume BUENOS AIRES/CHICAGO, Nov 30 (Reuters) – A ship named the Torrent is nearing the end of a 5,000-mile trip carrying soybeans from the U.S. Great Lakes to Argentina – a journey that only makes economic sense because of the U.S.-China trade war.

The ship is scheduled to dock in the Rosario grains hub on Dec. 4, days after the leaders of the world’s two largest economies, U.S. President Donald Trump and Chinese counterpart Xi Jinping, hold high-stakes trade talks in Buenos Aires.

They will meet on the sidelines of a Group of 20 nations summit and are expected to discuss how to roll back tit-for-tat tariffs – covering goods worth hundreds of billions of dollars – that have skewed global trade flows.

The Torrent’s 20,000-tonne soybean cargo is one such distortion, and just one of 14 ships the Argentine soy crusher Vicentin has lined up to import U.S. soybeans, according to port data reviewed by Reuters. The previously unreported shipments are among the first significant Argentine purchases from the United States in two decades, according to Vicentin’s broker and port data, as the nation’s government and industry moves to capitalize on the tumult of the U.S.-China conflict.

Argentina – one of the world’s top soybean exporters, and the top exporter of processed meal and oil – usually has no reason to import beans. But this year, the South American nation has raced to the top of the list of U.S. soybean importers because the prices of U.S. beans have fallen by 15 percent since late May, when China first threatened tariffs on them.

“One of the consequences of the trade war is that U.S. beans have to find a new home,” said Thomas Hinrichsen, president of Buenos Aires-based brokerage J.J. Hinrichsen SA, which cut the deals for Vicentin. “You are in the money to ship cheaper U.S. beans into efficient crushing plants in Argentina.”

Beyond price, Argentina needs U.S. beans to feed its massive soy-crushing industry after a punishing drought. What is left of the nation’s own crops are going to feed pigs in China – where buyers are paying a premium for South American soybeans to fill the gap left by virtually halted imports from the United States.

“The combination of the drought in Argentina and the soy glut in the United States caused by the trade conflict has directed U.S. soybeans toward Argentina,” said Guillermo Wade, manager of Argentina’s Port and Maritime Activities Chamber. “They are being used to keep our crushers working while freeing Argentine soybeans to go to China.”

Argentina’s International Trade Secretary, Marisa Bircher, told Reuters Argentina was also seeking to export more soy and byproducts to India and Southeast Asia. Argentina’s current top soymeal buyers include the European Union, Vietnam and Indonesia.

“Clearly, this U.S.-China conflict is generating a change in the grain trade,” Bircher said.

The grains powerhouse is even negotiating a license to export soymeal directly to China – which has until now only imported Argentine beans for crushing in China.

“We have a very good relationship with China… we are negotiating to open the market to soybean meal before the end of the year,” said Bircher.

Argentina collects export taxes from companies on agricultural goods like soy, corn and wheat shipments, providing it with much needed revenue in the midst of an economic crisis.

The country, which is in the global spotlight as G20 host, has good relations with both the United States and China and has sought deals with both in recent weeks as it seeks to cash in on opportunities that have arisen due to the trade war.

Besides seeking the soymeal deal with China, it has negotiated a deal to export beef to the United States for the first time in 17 years.

The Torrent, which loaded a month ago at a Toledo, Ohio facility operated by Ohio-based The Andersons, is one of 43 U.S. soybean ships that have sailed for Argentina since July and the second to sail from the Great Lakes region, on the other side of the world from the South American country. Just nine have sailed for China.

A year ago, 282 soybean cargo vessels were loaded in the United States bound for China in that time and none to Argentina, according to U.S. Department of Agriculture data.

‘UNNATURAL DESTINATIONS’
China’s soybean tariffs, which have virtually halted purchases of U.S. soybeans that last year totaled $12 billion, came in retaliation for Trump’s duties on Chinese steel and aluminum. That has left U.S. farmers and grains merchants with huge inventories of soybeans because China typically buys 60 percent of U.S. soy exports.

Grains companies have had to adapt quickly to keep massive volumes of perishable goods moving at the lowest possible cost.

Bulk grain terminals in the U.S. Pacific Northwest, the most direct outlet for Asia-bound shipments, are handling a quarter of their normal autumn soybean volume. The beans that are hauled there by rail are instead heading east to Great Lakes terminals or south to Mexico or Gulf Coast ports bound for countries other than China.

“By shipping soybeans out of the U.S. to unnatural destinations – and moving Brazilian and Argentine soybeans in place of that into China when they should have come out of the U.S. West Coast – there’s an inherent logistics cost in this,” Soren Schroder, Chief Executive of global grain trader Bunge Ltd told Reuters in a recent interview.

The inefficiencies amount to “many, many millions” of dollars in new costs, borne by the whole industry, he said.

TARIFF ARBITRAGE
The changes have also presented opportunities for agricultural trading giants such as Bunge, Louis Dreyfus Company and Cargill Inc, who are making money money processing cheaper U.S. soybeans in Argentina and Canada. They’re also selling those countries’ unprocessed beans at a premium to Chinese buyers who are struggling to replace the huge volume of soybeans they typically buy from the United States.

Nimble traders are reaping big profits, but the opportunities may be fleeting.

“Everyone’s getting on the ‘Make America Great’ Trump gravy train for soybeans from Canada,” said Dwight Gerling, president of Toronto-based DG Global, a Canadian exporter of soybeans by container.

On a delivered basis to China, Canadian soybeans were fetching a premium of up to $3 per bushel this fall over the Chicago futures price, more than double the premium U.S. soybeans make in export markets, he said.

DG Global has increased soybean sales volumes by 80 percent year to date, due entirely to the U.S.-China trade fight, Gerling said. DG buys cheap U.S. soybeans to ship to its regular southeast Asian buyers – who would normally buy Canadian soy – and this autumn sent its Canadian soybeans to China, a new market for the company.

The sales to China have recently slowed, however, with winter shipping restrictions approaching on the Great Lakes, Gerling said. Chinese bids for Canadian soybeans are now only slightly higher than bids from other countries for American soybeans.

While companies are finding new ways to make money, U.S. farmers in the export-focused Dakotas are feeling the sting of the trade battle as prices at their local elevators for their newly harvested soybeans are the lowest in more than a decade.

The concern there and elsewhere among U.S. farmers is that the damage to their relationships with Chinese buyers – built up over three decades – will be difficult to repair even if Trump and Xi strike a deal in Buenos Aires.

“The Chinese can get soybeans from other places if we’re not a reliable supplier,” said Bob Metz, a fifth generation farmer in Peever, South Dakota. “They have 1.4 billion people to feed. They don’t want to be dependent on us.”

(Additional reporting by Rod Nickel in Winnipeg and Michael Hirtzer in Chicago Editing by Caroline Stauffer, Simon Webb and Brian Thevenot)

(c) Copyright Thomson Reuters 2018.

https://gcaptain.com/spoils-of-trade-war-argentina-loads-up-on-cheap-u-s-soybean/
 

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Shale Gluts and Ship Rules Make Heavy Sweet Oil an Unlikely Star
December 1, 2018 by Bloomberg

Igor Grochev / Shutterstock

By Serene Cheong and Dan Murtaugh (Bloomberg) — There’s a rising star in the oil world, and it’s heavy and sweet.

Dense, low-sulfur oil, known in industry parlance as heavy sweet crude, is fetching increasingly stronger prices relative to benchmark lighter grades. For example, Angola’s Dalia traded at just 10 cents below Brent oil last month, up from a discount of $4.50 in January 2016, according to S&P Global Platts. Australian Pyrenees traded at $4 more than Brent, its widest premium in more than three years, according to trading sources.

The shifting values are indicative of the powerful forces that are pulling apart long-held relationships between oil prices around the world, in particular the U.S. shale boom and an overhaul of marine fuel regulations.

Heavy sweet crude has come into favor because it yields a lot of diesel and low-sulfur fuel oil when it’s refined. Those fuels are seen coming into heavy demand as new rules due to take effect in 2020 mean ships will use them more as an alternative to high-sulfur fuel oil, which is produced readily from sour crude. What’s more, lighter prices are under pressure because of a glut of U.S. shale oil and the gasoline it yields in abundance.

“What’s really in the sweet spot are heavy sweet crudes, which is offshore Angola and Brazil,” Martijn Rats, an analyst with Morgan Stanley, said in an interview. “Those should trade very strongly, but it’s a relatively small part of the oil market.”

Only about 500,000 barrels a day of heavy sweet oil are exported globally, accounting for just 1 percent of total seaborne trade, according to Matt Smith, director of commodity research at ClipperData LLC. Angola, Brazil and Chad are among the biggest sources.

Profits Diverge
Driving the focus on crude quality is the spread between the two most prevalent oil products, gasoline and diesel, which historically have had similar values. Gasoline futures in New York tumbled in November to nearly $25 a barrel less than diesel, the largest discount since 2014.

Most of the growth in crude production in recent years has come in the form of light shale oil in the U.S., while heavier exports from Iran and Venezuela are in decline because of sanctions and political disarray. That’s helped boost gasoline production and sent stockpiles of the fuel in the U.S. to a record seasonal high.

“This mismatch between the crude we make and products that we need is going to be a feature going forward,” Rats said on the sidelines of Morgan Stanley Asia Pacific Summit in Singapore. “My sense is that the excess in the gasoline market is here to stay for at least a while to come.”

Price Adjustments
The International Maritime Organization regulations set to go into effect at the start of 2020 will limit the amount of sulfur in marine residual fuel. That means that many of the world’s more basic refineries will choose to run low-sulfur oil, including Dalia and Pyrenees.

“Those low sulfur, heavy sweet crude oils will now have a greater value to the refining market as the residual portion of the crude oil will see new demand,” said Andy Lipow, president of Lipow Oil Associates in Houston.

The heavy, sweet oils that should benefit from this make up a small fraction of overall crude production, but the trend will also impact larger swaths of the market. Europe’s Brent crude tends to produce more diesel than West Texas Intermediate, so its premium to the U.S. benchmark should grow, Rats said. Middle Eastern benchmark Dubai, which is high in sulfur, should weaken relative to Brent in the second half of 2019, he said.

© 2018 Bloomberg L.P

https://gcaptain.com/shale-gluts-and-ship-rules-make-heavy-sweet-oil-an-unlikely-star/
 

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U.S. Attorney Will Allow Grand Jury to Investigate 9/11.
maneco64


Published on Dec 3, 2018
 

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Nutrien Ag Solutions Ag Forecast - Dec 3, 2018
Agrible, Inc.


Published on Dec 3, 2018
Brought to you by Nutrien Ag Solutions
 

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Share Talk Bulletin Board Heroes, Monday 3rd December 2018
Share Talk


Published on Dec 3, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Allied Mind (ALM)
GCM Resources (GCM)
Hvivo (HVO)
Itaconix Plc (ITX)
Mkango Res (MKA)
Nuformix (NFX)
Predator Oil (PRD)
Silence Ther. (SLN)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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Sunday Night Market Watch: Silver & Gold LIVE
SalivateMetal


Streamed live 12 hours ago
 

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World Stocks, US Futures, Crude Soar As Trump, Xi Deliver Early Christmas Rally





by Tyler Durden
Mon, 12/03/2018 - 07:22


The Grinch may have stolen Thanksgiving profits, but Christmas came early for markets with world stocks rising over one percent and pushing emerging currencies higher against the dollar, as S&P futures jumped as much as 2%...






... and the Shanghai Composite soared 2.9% after the U.S. and China agreed to halt new tariffs for 90 days. Commodities spiked and the dollar rebounded from session lows. The MSCI’s all-country world index rose 0.9% in its sixth straight day of gains and hit its highest level since Nov. 9 while emerging equities rose 2.1% and were set for their strongest day in a month.






The gains came after China and the United States agreed during a Saturday dinner at the G-20 in Argentina to halt additional tariffs on each other. The deal prevents their trade war escalating as the two sides try to bridge differences with fresh talks aimed at reaching a deal within 90 days. If no deal is reached, Trump warned that the US will resume escalation, and hike tariffs to 25% from 10%.

"We have a deal. That’s wonderful news for global financial markets and signaling the start for a year-end rally in risky assets," said Bernd Berg global macro strategist at Woodman Asset Management. “We are going to see a rally in emerging market and U.S equities, EM currencies and China-related assets like Australia. I expect the rally to last until year-end.”

Oil soared 4% higher after dipping below $50 briefly last Friday, jolted by efforts across the globe to support prices as Saudi Arabia and Russia extended their pact to keep production low (although without providing details ahead of this week's OPEC+ meeting, while Canada’s largest producing province ordered unprecedented supply cuts. Optimism was dented slightly after Qatar said it was quitting OPEC, just as the group prepares to meet this week.






The risk-on mood initially drove the U.S. dollar as much as 0.4% lower against a basket of currencies before trimming some losses. The greenback was already under some pressure from the recent shift in the Fed's policy communication to a slightly more dovish stance.

Comments by Federal Reserve Chair Jerome Powell were interpreted by markets as hinting at a slower pace of rate hikes.






Emerging currencies were among the main beneficiaries of dollar weakness, with an MSCI index up 0.6 percent. It was led by China's yuan which rose one percent for its biggest daily gain since Feb. 2016.






The euro pared a gain after data showing manufacturing activity slowed, with factory growth stumbling again in November, as business confidence remains the weakest in 6 years.






“Such positive sentiment won’t fade very soon ... (the 90-day) period is not short, it’s long enough to soothe market sentiment,” trader at a foreign bank in Shanghai told Reuters.

Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee but his hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Saturday.

While some have speculated that the trade war truce would bring back more hikes on the table, others disagreed: Florian Hense, economist at Berenberg, said the market rally would not bring a return to a more hawkish Fed stance. “We would need to see some rebound in economic activity to lift expectations of more rate hikes,” he said.

Maybe not: in a Bloomberg TV interview, Fed Vice Chairman Richard Clarida said the US economy is in "good shape" and the outlook is "very solid" as the central bank is focused on meeting its dual mandate. He added that the concept of a “Powell Put" isn’t a useful concept, noting that the Fed could operate somewhat above 2% inflation goal.

More importantly, Clarida said that the dot plot of Fed interest-rate forecasts "is not going anywhere", though it may evolve.

* * *

Back to markets, where Asian shares kicked off the gains, with Chinese mainland markets rising more than 2.5% while Japan's Nikkei gained as much as 1.3% to a six-week high.

European equities followed Asia’s response higher with miners and automakers leading gains in the Stoxx Europe 600 Index after President Donald Trump said in a late-night tweet that China agreed to “reduce and remove” tariffs on imported American-made cars. The tweet sent the Dax 2.5% higher as auto stocks were set for best day in 2-1/2 yrs on Sino-US trade truce. Just before midnight on Sunday, Trump tweeted that China had agreed to remove car import tariffs, even though in a briefing in Beijing a few hours later China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.

Trump gave no other details in his late-night tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina. Shares of German carmakers Daimler AG and BMW AG rallied Monday morning after the U.S. trade deal with China. Trump’s comments, if ratified, would also hand automakers like Tesla a potential reprieve after higher levies hit sales in the world’s biggest car market.

In EMs, South Africa’s stock market was on course for its best day in four years, while Russian stocks climbed with the ruble as oil-production curbs spurred the biggest jump in Brent crude in two years. The peso advanced after a report that the new government was ready to re-purchase bonds issued to build Mexico’s City new airport.

Meanwhile, in rates, ten-year Treasury yields rose back above 3 percent; the Australian curve bear steepens with 10-year yield three basis points firmer. Mexican peso rallies 1.3%, rand 1.1% stronger; won rose to its strongest since October. Germany’s 10-year government bond, the benchmark for the euro area, was set for its biggest one-day yield jump in a month, rising four basis points to a high of 0.347%. Yields on riskier southern European bonds fell across the board, with Italian yields sliding as much as 10 bps to new two-month lows.






As noted above, WTI (+4.1%) and Brent (+3.9%) were both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January.

Gold (+0.7%) was firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high.

Elsewhere in commodities, Chicago soybeans rally as much as 3.2%. Base metals gain with LME copper up 2%; Dalian iron ore 3.4% stronger.
In other news, Italian PM Conte stated they are examining several options for a budget deal with the EU in which a solution could be made within days. Later it was reported, that Italian PM Conte is reportedly preparing for a deficit of 1.9%-2.0%, while Italian Deputy PMs Salvini and Di Maio are said to be ready to accept new target, according to Messaggero. Italy's Deputy PM Salvini says that the EU cannot ask for a 1.9% target.

In the latest Brexit developments, UK PM May was reportedly under renewed pressure as the DUP threatened to abandon support for her in a confidence vote if she failed to get her Brexit deal approved in Parliament. May's chief Brexit adviser Oliver Robbins secretly warned her the PM that customs backstop is a "bad outcome" for the UK which will see regulatory checks in the Irish Sea and put security co-operation at risk, according to the Telegraph. UK Secretary of State for Environment, Food and Rural Affairs Gove, has told Conservative rebels that there was a “real risk” of a second Brexit referendum if they don’t back PM May’s deal with Brussels.

In geopolitical news, South Korean President Moon and US President Trump agreed to revive momentum regarding negotiations for North Korea denuclearization. In related news, South Korean President Moon said a visit by North Korean Leader Kim to Seoul is still open and possible this year, while US President Trump is said to be targeting a summit with North Korean leader early 2019.

Expected data include manufacturing PMI and construction spending. Finisar, Coupa Software, RH and Smartsheet are among companies reporting earnings.

Market Snapshot
  • S&P 500 futures up 1.7% to 2,805.50
  • STOXX Europe 600 up 1.8% to 363.80
  • MXAP up 1.9% to 156.55
  • MXAPJ up 2.3% to 502.97
  • Nikkei up 1% to 22,574.76
  • Topix up 1.3% to 1,689.05
  • Hang Seng Index up 2.6% to 27,182.04
  • Shanghai Composite up 2.6% to 2,654.80
  • Sensex up 0.05% to 36,210.60
  • Australia S&P/ASX 200 up 1.8% to 5,771.16
  • Kospi up 1.7% to 2,131.93
  • Brent futures up 5.3% to $61.79/bbl
  • Gold spot up 0.8% to $1,230.66
  • U.S. Dollar Index down 0.5% to 96.84
  • German 10Y yield rose 1.1 bps to 0.324%
  • Euro up 0.4% to $1.1362
  • Italian 10Y yield rose 0.9 bps to 2.846%
  • Spanish 10Y yield fell 1.1 bps to 1.491%
Top Overnight News
  • U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs on American cars from 40 percent currently. He gave no other details in the late-night tweet, which came shortly after he agreed with President Xi Jinping to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. In a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes
  • Oil rebounded from the biggest monthly loss in a decade after Russia and Saudi Arabia agreed to extend their deal to manage the crude market into 2019 and Canada’s largest producing province ordered an unprecedented output cut
  • Leaders of the world’s largest economies agreed the global system of rules that’s underpinned trade for decades is flawed, in a post-summit statement Saturday that the White House quickly claimed as a win for Donald Trump’s protectionist agenda
  • U.K. Prime Minister Theresa May faces yet another grueling battle this week as members of Parliament sink their teeth into her Brexit deal ahead of a crucial vote. On Monday, politicians on all sides will ratchet up the pressure on May to justify the terms she’s agreed to with the European Union by demanding she publish the government’s internal legal advice underpinning the accord
  • France’s "Yellow Vest" anti-government demonstrations intensified Saturday. More than 400 people were arrested and at least 133 injured after rioters in Paris burned cars, looted stores and restaurants, and sprayed graffiti on the Arc de Triomphe. Emmanuel Macron convened an emergency cabinet meeting amid demands to alter his environmental and budget policies
  • As the Brexit deadline approaches, about 50 banks and other financial institutions are having or have had talks with the Dutch central bank about setting up shop in the Netherlands
  • The compromise to safeguard the euro is set to underwhelm supporters of the sweeping vision of an integrated and assertive Europe set out by French President Emmanuel Macron last year as the banking union, bailout plans and euro budget are all bogged down
Asian equity markets were higher across the board with global risk appetite boosted following the US-China trade truce at the G20. News of the tariff ceasefire spurred a rally in US equity futures in which the Emini S&P and DJIA futures reclaimed the 2800 and 26000 levels respectively, with the blue-chip index up nearly 500 points. ASX 200 (+1.8%) and Nikkei 225 (+1.1%) advanced with Australia led by commodity-related sectors as energy benefitted from the positive trade developments and Russia-Saudi agreement to extend the OPEC+ accord, while the JPY-risk dynamic was very much in play for Tokyo trade. Elsewhere, Hang Seng (+2.4%) and Shanghai Comp. (+2.6%) outperformed on the easing of trade tensions, with sentiment also supported by better than expected Chinese Caixin Manufacturing PMI and after the CFFEX relaxed domestic stock index futures trading conditions. Finally, 10yr JGBs initially saw a bout of weakness at the open amid the heightened risk appetite, although prices later recovered amid the BoJ’s presence in the market for JPY 800bln of JGBs with maturities of up to 5yrs.

Top Asian News
  • Trump’s Auto Tariff Tweet Boosts Stocks, Leaves Beijing Silent
  • Goldman Sachs-Funded Group Bids A$2.4 Billion for GrainCorp
  • Macau Casinos Rise as J.P. Morgan Calls November Beat Impressive
  • Saudi Prince Finds Both Friends and Disapproval at G-20 Summit
  • India Is Said to Seek Seizure of IL&FS Officials’ Properties
European equities (Eurostoxx 50 +1.8%) trade with firm gains as markets react to the fallout of the G20 summit which saw US President Trump and Chinese President Xi Jinping agree to delay hiking tariffs on USD 200bln of Chinese goods to 25% for 90 days to allow for trade discussions between the two nations. In terms of sector specifics, mining names have been the main beneficiary from the trade optimism thus far with price action in metals markets giving a lift to Antofagasta (+8.0%), Arcelormittal (+6.6%), Anglo American (+6.3%), Glenore (+6.5%) and many more. Elsewhere, luxury names are also seeing some reprieve from the US-China developments with the sector previously hampered by tensions between the two nations; as such, Swatch (+6.1%), Kering (+5.5%), LVMH (+4.3%) and Burberry (+3.3%) all trade with firm gains. Auto names are also seen higher amid the spillover from US President Trump tweeting that China has agreed to reduce and remove tariffs on cars coming into China from the US which are currently at 40%; BMW (+6.1%), Daimler (+6.2%), Volkswagen (+3.9%). Finally, tech names have also been supported by the weekend’s developments with tech a key focus for negotiations, subsequently, STMicroelectronics (+7.3%), Infineon (+5.8%) and Wirecard (+4.4%) are also near the top of the Stoxx 600 leaderboard.

Top European News
  • U.K. Manufacturing Growth Recovers From 27-Month Low in November
  • Spanish Establishment Suffers Another Fracture in Andalusia
  • Sewing’s Options Dwindle as Fresh Scandals Hit Deutsche Bank
  • Albert Frere, Belgian Billionaire Investor, Dies at 92
  • $80 Billion Locked in a ‘Golden Cage’ in Austria May Be Set Free
FX: DXY, CNY, JPY – An optimistic end to the G20 summit with Trump and Xi agreeing on a 90-day tariffs ceasefire until a trade deal can be negotiated (with sticking points such as IP remaining). As such DXY fell to lows of 96.710 vs. last week’s low of 96.622, though the index is nursing losses in an attempt to take another jab at 97.000.

USD/CNY fell below the key 6.90 level despite a higher USD/CNY fix by the PBOC overnight, while JPY unwound some risk premium with USD/JPY stopping just shy of 114.00, but the headline pair supported just ahead of a downside tech-level (Tenken at 113.34).

  • AUD, NZD, CAD – Major high-beta beneficiaries in the aftermath of the G20, with AUD/USD within striking distance of 0.7400 (where 1.365bln in option expiries lie) ahead of its 200DMA at 0.7418, while the Kiwi holds above 0.6900, marginally hampered by weaker than expected Q3 terms of trade and softer export volumes. Meanwhile, CAD also takes advantage of the rising oil prices after Russia and KSA extended their OPEC+ pact, on top of the tactical 325k BPD production cut at Canada’s Alberta refinery. USD/CAD currently sub-1.3200 but off post-G20 lows of 1.3160.
  • GBP, EUR - Little reaction in the pound and the single currency following mixed manufacturing PMIs with Cable back down below 1.2750 (after having breached its 10DMA at 1.2800 where stops were reportedly tripped) and through the Raab-low at 1.2724 to test bids ahead of 1.2700, while EUR/USD couldn’t sustain gains to 1.1400 before retreating through 1.1350 and towards 1.1300. Note, the single currency was supported earlier on Italian press reports that PM Conte is said to be preparing for a deficit/GDP target in the range of 1.9%-2.0%, with the Deputy PMs apparently ready to accept the new target but has eased back in wake of the ECB’s announcement of Capital Key changes, including a perhaps surprisingly lower Italian ratio. In terms of option expiries, EUR/USD sees 1.32bln around 1.1380-90 ahead of reported offers at 1.1400.
  • EM – TRY back in focus with softer than expected Turkish CPI helping the Lira retest recent highs around 5.1500 vs. the buck at one stage, but unable to breach resistance as the USD stage a broad comeback.
In commodities, WTI (+4.1%) and Brent (+3.9%) are both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January. Gold (+0.7%) is firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high.

US Event Calendar
  • 6:30am: Fed Vice Chairman Clarida Interviewed on Bloomberg TV & Radio
  • 8am: Fed’s Quarles speaks at Council on Foreign Relations in NYC
  • 9:15am: Williams Speaks at a NY Fed Conference on Treasury Market
  • 9:45am: Markit US Manufacturing PMI, est. 55.4, prior 55.4
  • 10am: Construction Spending MoM, est. 0.35%, prior 0.0%
  • 10am: ISM Manufacturing, est. 57.5, prior 57.7
  • 10:30am: Brainard Gives Keynote at NY Fed’s Treasury Market Conference
  • 1pm: Fed’s Kaplan Speaks at Community Forum in Laredo, Texas
  • Wards Total Vehicle Sales, est. 17.2m, prior 17.5m
https://www.zerohedge.com/news/2018...e-soar-trump-xi-deliver-early-christmas-rally
 

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The Hypocrisy Of The G20, And The World Leaders Who Participated




by Tyler Durden
Mon, 12/03/2018 - 03:30

Authored by Richard Galustian via TheDuran.com,

The G20 in Argentina was nothing short of a circus; a distasteful display of imperialism, greed, corruption and elitism. These leaders do not speak for the poor or downtrodden or oppressed...




As for America, Trump continues his theatrics by saying he would not meet Putin; whether he did or didn’t, us ordinary folk will never know. These are games. Though President Trump canceled his meeting with Putin, Trump met with China’s President Xi, let us not fool ourselves about prospects for any real breakthrough over their two countries’ trade disagreements from a so-called 'truce'.

China emerges as ‘the grown up’ of all world nations; the 21st Century will eventually, one can predict, belong to them.

However one must admire the charm, intellect and humour of the exceptional Russian Foreign Minister Lavrov, who on the subject of a cancelled meeting between Trump and Putin, he brilliantly described the dance between the two nations by saying he was saddened by President Trump’s decision, adding “love can’t be forced.”

Do we have any person in the West that comes close to the class of Lavrov?

One cannot fail to mention though no more revolting images imaginable were the mostly warm welcome by many leaders given to the psychopath Crown Prince of Saudi Arabia, Mohamad bin Salman (MBS).

However the one that disappoints the most is the sight of President Putin with MBS, laughing and joking.



The main reason is that for the last few years, Russia and Putin and his exceptionally capable Foreign Minister Sergei Lavrov have maintained a very high moral ground on most of the world’s issues and outrageous actions, in the main, made by America. This has been Russia’s success these recent years, especially their brilliant handling of the World Cup.

But to see President Putin’s animated display of friendship towards MBS was nothing short of disgusting.

Putin’s advisors should never have allowed their President to make such a disillusioning mistake for all of us to see.

MBS and the Saudi regime are the most distasteful murderous regime on the planet. Putting the heinous murder by the Saudi’s of Jamal Khashoggi to one side, what Saudi is doing in Yemen is without doubt a war crime of huge proportions. They also are the real exporters of terrorism not Iran. Remember who were the alleged hijackers on 9/11. Saudis or Iranians? Only Israel match being as murderous a regime as Saudi, evidenced by what they have done and continue to do in the ‘open prison’ that is Gaza.

When did we all lose our moral compass?

You think these second rate leaders can solve the most important planet’s problems of over population, the environment and nuclear proliferation? Dream on.

For some of us there was hope that Russia could counter the imperialistic ambitions of America and it’s penchant for regime change.

Now that hope seems to have been a false.

All these spineless amoral leaders attending the G20 meeting should be in many cases simply arrested or put up against a wall. Where is the anger, the indignation from the world’s populace against their leaders? Where is the media? Why is Assange not spoken of, etc.

In a nutshell, the G20 only reinforces a fact most of us know which is that corrupt leaders control our planet.

We need, though it will never happen, a ground swell of revolution by the people, by citizens, to change the system, of most countries, even if it be violent, which seems the only way anything will change.

The G20 meeting was of corrupt people on a scale akin to a mafia get together.




Corruption is the World’s greatest enemy and in Buenos Aires we saw ‘the Dons’ get together and, be sure of one thing above all else, there will be no real result except the leaders attending will increase their personal self interests and wealth.

https://www.zerohedge.com/news/2018-12-02/hypocrisy-g20-and-world-leaders-who-participated
 

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Scrap Metal & Commodities Recycling Report 12/3/18
Greg Brown


Published on Dec 3, 2018
The Global Economic, Scrap Metal, Commodities and Recycling Report is brought to you by Greg Brown CEO of BENLEE Trailers. For more information visit:
http://www.benlee.com/

To be added to our weekly mailing list please see below.
http://visitor.r20.constantcontact.co...
 

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Ira Epstein's End of the Day Financial Video 12 3 2018
Ira Epstein


Published on Dec 3, 2018
 

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Ira Epstein's End of the Day Agriculture Video 12 3 2018
Ira Epstein


Published on Dec 3, 2018
 

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Yield Curve Inversion Pointing to Recession.
maneco64


Published on Dec 4, 2018
 

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Share Talk Bulletin Board Heroes, Tuesday 4th December 2018
Share Talk


Published on Dec 4, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Argo Blockchai. (ARB)
Allied Mind (ALM)
Egdon Resources (EDR)
Greatland Gold (GGP)
Jubilee Metals (JLP)
Versarien (VRS)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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Stocks Slides As Trade Hopium Turns Into Hangover; Curve Inversion Accelerates


by Tyler Durden
Tue, 12/04/2018 - 07:07

So much for the trade truce rally.

One day after it emerged that nobody in the Trump administration has any clue about what was actually agreed upon during Saturday's historic "dinner date" between Trump and Xi, Monday's market hopium fizzled and as we previewed yesterday, has turned into a vicious hangover, with US equity futures dropping and European shares tracking declines in Asia despite a modest recovery from Chinese stocks into the close as investors curbed their enthusiasm over any breakthrough in the trade war.



S&P 500 futures indicated U.S. shares would give up much of their Monday’s gains at the New York open, while the Stoxx Europe 600 Index slipped led by the same automakers which surged yesterday on a Trump tweet about China dropping car tariffs, which has since been largely disproven.



Markets slumped across the globe, with world stocks knocked off a three-week high as a result of dashed hopes of a swift resolution in the US-China trade war after media appearances from Trump administration officials shed little light on the specifics of any Sino-American trade agreement, while growing fears the U.S economy could be headed for recession sooner than expected weighed on the dollar.

As Bloomberg notes, the optimism that drove Monday's gains quickly dissipated as investors scrambled to figure out exactly what, if anything, was agreed between the U.S. and China on trade at the weekend. Treasury Secretary Steven Mnuchin and President Donald Trump’s top economic adviser, Larry Kudlow, dialed back expectations and added qualifiers when asked about the outcome of talks between Trump and Chinese President Xi Jinping. China’s government did not help the mood as it was unable to formulate its response to the trade summit - three days after its conclusion - as senior officials are still out of the country with President Xi Jinping. China has said nothing about the commitment to remove car tariffs flagged by the U.S., nor did its statement mention the 90-day timeline for talks the Americans have specified.

Following declines on Asian bourses, where Japan’s Nikkei stock index closed 2.4% lower, even as shares in Shanghai and Hong Kong fared better, fluctuating before ending higher as the yuan climbed, the mood was somber in Europe with the wider blue chip index slipping 0.3 percent. Frankfurt’s DAX and Paris’ CAC 40 fell 0.6 percent while MSCI’s index of world stocks declined 0.1 percent.

"The initial relief rally was never going to last. Investors need more detail now in order for that risk on sentiment to survive,” said Jasper Lawler, head of research at London Capital Group. “So far that detail has not been coming through and investors have more questions than answers."

Adding to market woes, was an inversion of the short end of the U.S. yield curve which foreshadowed the end of the Federal Reserve’s tightening campaign and raised the specter of a possible U.S. recession. The curve between U.S. three-year and five-year and between two-year and five-year paper inverted on Monday - the first parts of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt; meanwhile the closely watched 2s10s just 13 basis points from inversion.



On Tuesday, the yield on benchmark 10-year Treasury notes dropped as low as 2.94%, sliding below its 200DMA for the first time since September 2017.



“The focus is now shifting to the inverted U.S. bond yield curve which has negative connotations, while implying the U.S. economy is heading towards what was only a few weeks ago an improbable economic slowdown,” said Stephen Innes, head of trading for APAC at Oanda. “Now, even recessionary fear is starting to raise its ugly head.”

German/U.S. yields moved in tandem, with curves bull flatten as the focus on curve inversion gains momentum. Long-dated Gilt yields drop 3bps, dragging peers lower, short dates underpinned by steady demand at the 2024 auction, although attention remains squarely on Brexit developments.

As yields dropped and the curve inverted, the USD weakened against all G-10 currencies, weakening 0.8% against the Japanese yen and fell more than 0.5% to its weakest level since September against the offshore Chinese yuan to 6.83 yuan, with the Bloomberg dollar index sliding back under 1,200...



... while the cable rallied back above 1.2800 after the European Court of Justice offers a non-binding opinion on the possibility of an Art. 50 reversal. This was a bounce back from two-month lows it hit in early trade against the dollar on concern about British parliamentary approval for a proposed Brexit deal. The pound last stood 0.7 percent firmer at $1.2814 while weakening 0.2 percent against the euro to 89.10 pence. The South African rand strengthened after a surprise GDP beat, putting in the best performance in EMFX. WTI crude pushes higher through $54, but knocked off best levels after Saudi Energy Min tempers hopes for an OPEC+ production cut

Fed Chairman Jerome Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee, but the hearing was postponed because of a national day of mourning for U.S. President George H.W. Bush, who died on Friday.

Elsewhere oil continued to find support, and extended gains, adding to Monday’s 4 percent surge as investors bet a key OPEC meeting on Thursday could deliver supply cuts in the wake of moves by producers to address a supply glut that contributed to a 15% tumble in West Texas Intermediate prices last month. U.S. crude and Brent crude added 1.6 percent to $53.82 and $62.7 per barrel respectively. Later in the session oil pared some gains after Saudi Oil Minister Khalid Al-Falih said it’s too early to say whether OPEC and its partners will cut production.

Gold hit a session high of USD 1238.83, reaching its highest value since the end of October, as the dollar continues to weaken on a decline in US yields following the positive G20 trade outcomes. Steel futures have hit a 7-month low as prices are pressured by the oversupplied market, this comes after the positive sentiment seen in base metals on Monday from US-China trade developments. Separately, palladium (+1.0%) hit a record high of USD 1221.95 earlier in the session.

On today's economic calendar, no major economic data are expected. AutoZone and Dollar General are among companies reporting earnings.

Market Snapshot
  • S&P 500 futures down 0.6% to 2,774.50
  • STOXX Europe 600 down 0.3% to 359.96
  • MXAP down 0.6% to 155.59
  • MXAPJ down 0.03% to 503.44
  • Nikkei down 2.4% to 22,036.05
  • Topix down 2.4% to 1,649.20
  • Hang Seng Index up 0.3% to 27,260.44
  • Shanghai Composite up 0.4% to 2,665.96
  • Sensex down 0.4% to 36,113.39
  • Australia S&P/ASX 200 down 1% to 5,713.14
  • Kospi down 0.8% to 2,114.35
  • US Dollar Index down 0.5% to 96.53
  • Brent futures up 2.4% to $63.18/bbl
  • Gold spot up 0.7% to $1,239.66
  • German 10Y yield fell 2.2 bps to 0.284%
  • Euro up 0.4% to $1.1398
  • Italian 10Y yield fell 6.7 bps to 2.779%
  • Spanish 10Y yield unchanged at 1.492%
Top Overnight News from Bloomberg
  • President Donald Trump left his top advisers scrambling on Monday to explain a trade deal he claimed he’d struck with China to reduce tariffs on U.S. cars exported to the country -- an agreement that doesn’t exist on paper and hasn’t been confirmed in Beijing
  • The ECJ opinion was seen as potentially helping both May in getting her EU withdrawal deal through Parliament as it could encourage Brexit hardliners to back the agreement in fear of the U.K.’s exit will be stopped, as well as giving hope to those who want to thwart the process
  • China’s government isn’t yet able to formulate its response to the summit on trade with U.S. President Donald Trump as senior officials are still out of the country with President Xi Jinping. China has said nothing about the commitment to remove car tariffs flagged by the U.S., nor did its statement mention the 90-day timeline for talks the Americans have specified. On Tuesday, China announced an array of punishments for intellectual property theft
  • French President Emmanuel Macron plans to reverse course and suspend a planned fuel-tax hike that has sent as many as 300,000 protesters into the streets for three weekends in sometimes violent clashes
  • U.K. derivatives-clearing giants including a unit of London Stock Exchange Group Plc are pushing the European Union to guarantee that they’ll be able to continue serving the bloc’s biggest banks in the event of a no-deal Brexit, according to people with knowledge of the firms’ positions
  • South Africa emerged from its first recession in almost a decade in the third quarter as recoveries in manufacturing and agriculture contributed to an increase in economic growth
  • A section of the U.S. Treasuries yield curve inverted for the first time in more than a decade. The spread between 3- and 5- year yields turned negative, and the 2- to 5-year gap soon followed
  • Theresa May’s attempt to sell her Brexit deal to lawmakers was torpedoed before it had even begun, as opposition parties were granted an emergency debate on whether her government is in contempt of Parliament for refusing to release legal advice about the deal
  • The onshore yuan climbed for a second day, extending its biggest advance in more than two years, as a rally built on a truce in the China-U.S. trade war continues
  • The Reserve Bank of Australia left its key rate at a record low Tuesday as it gauges the impact of a housing market slowdown
  • Oil extended gains above $53 a barrel as investors held on to optimism OPEC and its allies will strike a deal to stabilize the market. The agreement between Saudi Arabia’s Crown Prince Mohammed bin Salman and Russian President Vladimir Putin raises the possibility of a production accord when OPEC and its partners meet this week in Vienna
Asian stocks traded mostly negative as the relief rally fizzled out in the region with investors quick to book their recent profits. ASX 200 (-1.0%) and Nikkei 225 (-2.4%) were lower from the open in which a pullback in consumer and energy stocks led the downside in Australia and with Japanese sentiment dampened by a firmer currency. An indecisive tone was seen in the Hang Seng (-0.5%) and Shanghai Comp. (-0.2%) amid a lack of fresh drivers and as participants await the next developments of the US-China trade saga with China reportedly considering possibilities of lowering US auto tariffs. In addition, US Treasury Secretary Mnuchin was said to be hopeful for an agreement but warned tariffs will be implemented if a deal fails to materialize, while China reportedly censored a post by the US Embassy regarding the recent trade developments and tariff ceasefire which some have suggested could be a possible effort to avoid looking weak or that it gave in to US pressure.

Finally, 10yr JGBs traded higher amid the risk averse tone and as they tracked the overnight gains in T-notes. This coincided with the US 10yr Treasury yield dropping below its 200DMA for the first time in around a year, while the US 2yr/10yr spread continued to narrow to its flattest in over a decade. Today also saw a 10yr auction from Japan, although there was a muted reaction as the auction bore mixed results.

Top Asian News
  • Foreigners Cut China Bond Holdings First Time Since Feb. 2017
  • Sri Lanka Court Restrains Rajapaksa Acting as Prime Minister
  • China Announces New Punishments for Intellectual Property Theft
  • Rich Asians Are Crazy to Live in Shanghai, Luxury Index Shows
European equities have kicked the session off with modest losses (Eurostoxx 50 -0.5%) as markets take a breather from yesterday’s “trade truce” inspired gains. The CAC 40 (-0.6%) is showing some marginal underpeformance relative to its peers in what has been a difficult start to the week for French equities amid domestic protests over the weekend, albeit tensions might show some signs of abating following reports that the French PM is to halt the proposed fuel tax hike. Elsewhere, sectors are relatively mixed thus far with mild outperformance seen in energy names (in-fitting with price action in the complex). Consumer discretionary stocks are a clear underperformer with Volkswagen (-2.2%), Porsche (-2.0%) and BMW (-1.9%) all lower after German car registrations fell 10% Y/Y. Postal names are softer in Europe following a disappointing update from BPost (-20.4%) which has sent their shares to the foot of the Stoxx 600, dragging Post NL (-5.3%) and Deutsche Post (-1.7%) lower in sympathy. In terms of individual movers and shakers have predominantly been the result of broker moves with Rightmove (+1.8%), JC Decaux (-3.3%), BAE Systems (-4.9%) and Continental (-4.0%) all gaining traction as a result of rating action.

Top European News
  • Carney Says Worst-Case Brexit Scenario Is Unlikely to Happen
  • Danske Has About $2.7 Billion as Buffer Against Fines, CEO Says; Danske Says BlackRock Increases Stake in Bank
  • Europe Auto Stocks Drop as Jefferies Downgrades, U.S. Backpedals
  • NordLB to Start Discussions With Bidders After Getting 4 Offers
  • BT Upgraded to Buy at Goldman, Cost Transformation in Focus
In FX, DXY – On the backfoot again with the index retreating further from 97.000 to trip stops at 96.400 and register a fresh post-G20 low of 96.372. This against the backdrop of broad Dollar losses vs. its major counterpart and a sharp retreat in US Treasury yields with the long-end of the curve outperforming.

EUR – Also benefitting from the Greenback’s misfortunes and hopes that Italy vs. EU fiscal friction may be resolved amidst latest reports that PM Conte will deliver another revised 2019 budget draft with deficit circa 2.0%. EUR/USD back above 1.1400 (with 1.234bln option expiries between 1.1400-05) but just stopped short of a key Fib at 1.1424.

JPY, GBP – Major G10 outperformers with cable briefly breaching yesterday’s high of 1.2825 (vs. intraday lows of 1.2720), absorbing offers around 1.2800-1.2820 on the way to a peak of 1.2839. The Pound may have derived support from another UK PMI beat (construction) having already gained impetus after the ECJ’s senior advisor stated that the UK can revoke Article 50 unilaterally (under certain conditions). The single currency vs. the pound holding just above 0.8900 vs. lows of 0.8890 with stops reported at 0.8950 (though some distance away). To the downside, 0.8861 is reported to be a support level.

Elsewhere, the JPY is taking advantage of the ongoing buck decline and a marked downturn in risk sentiment after initial US-China truce euphoria, with USD/JPY taking out the Tenken line at 113.34, a Fib level at 113.17 and the 55DMA at 113.05 to hit a low of 112.75 (ahead of the psychological 112.50 and the 100-DMA at 112.25).

EM –Turkish Lira remains pressured by the ongoing recovery in oil prices (large net importer). USD/TRY trading around 5.30 with concerns that the Central Bank may prematurely loosen policy (aided by the slowdown in CPI) also weighing on investors’ minds. However, the ZAR is the clear EM outperformer amid the latest SA GDP figures showing the country has recovered out of recession, while a rally gold (major producer) is also providing the Rand with impetus. Finally, CNY undergoes another day of strengthening in a continuation from the G20 momentum. USD/CNY trading comfortably below 6.8500 after the PBoC set the strongest Yuan fix since June last year.

In commodities, Brent (+2.2%) and WTI (+2.2%) have continued to rise on expectations for a cut at the upcoming OPEC+ meeting, with any cut likely to take into account the reduction to Canadian output which is also supporting oil prices. Prices came off highs after Saudi Energy Minister Al-Falih stated that it is premature to suggest that OPEC+ will reduce output at the meeting this week, in turn hinting division amongst OPEC members. Initial source reports suggest that OPEC+ are working towards a minimum output cut of 1.3mln BPD from the October levels.

However, Russia’s position of a maximum output cut of 150k BPD is the main obstacle to this, as OPEC want a minimum cut of 250-350k BPD. With sources suggest that OPEC may delay cuts if Russia does not agree to a substantial output cut. Looking ahead we have API data later in the day, with expectations being that crude stocks fell by 2.25mln/bbl for the week; if expectations prove accurate this will be the first crude oil draw since mid-September. Additionally, the weekly EIA release has been pushed back to Thursday at 16:00 GMT, due to the national day of mourning for Former President George H.W. Bush. Gold hit a session high of USD 1238.83, reaching its highest value since the end of October, as the dollar continues to weaken on a decline in US yields following the positive G20 trade outcomes. Steel futures have hit a 7-month low as prices are pressured by the oversupplied market, this comes after the positive sentiment seen in base metals on Monday from US-China trade developments. Separately, palladium (+1.0%) hit a record high of USD 1221.95 earlier in the session.

Looking at the day ahead, it’s not the most exciting for data releases with the October budget balance for France and October PPI report for the Euro Area the only prints of note. There’s nothing of note in the US however we are due to hear from the Fed’s Williams this afternoon when he holds a press briefing at the NY Fed. BoE Governor Carney is also due to attend a hearing of the Treasury Committee on the Brexit Withdrawal Agreement.

US Event Calendar
  • 10am: Fed's Williams Holds Press Briefing at New York Fed
DB's Jim Reid concludes the overnight wrap
Also in credit we’ve just published our two monthly chartbooks. The PowerPoint based one on global credit trends including issuance, flows, performance and relval ( link ) and also the excel based US credit strategy one with everything you wanted to know about US credit in a spreadsheet including up to date fundamentals ( link ). Elsewhere in today’s PDF link we’ve updated our PMI vs equities analysis. It shows equities as ‘cheap’ at the moment to current activity levels. Click on the full link for this report at the top for more with the commentary below.

Bourses yesterday closed well off their early highs with the follow through from the trade ceasefire a little disappointing. This reversal has continued in Asia to a large degree with the Nikkei (-1.72%), Hang Seng (-0.52%) and Kospi (-0.95%) all lower alongside most markets while the Shanghai Comp (+0.04%) is flattish. 10yr USTs yields are 11bps lower than their peak yesterday at 2.939% (-3bps this morning) with the curve flattening further (see below). S&P 500 futures are down -0.58% as we type.

Notwithstanding these disappointments, the reality is that yesterday US stocks did continue on what was a strong rebound from last week.

Indeed after taking into account the +1.09% jump yesterday the S&P 500 is now up +5.99% over the last six sessions which is the strongest such run since February 2016 and second strongest since 2011. Tech led the way yesterday with the NASDAQ rallying +1.51% and the NYSE FANG index returning +2.80%. This was after the STOXX 600 finished +1.03% in Europe and the DAX +1.85% - albeit with both also closing off the early session highs. It was a similarly strong day for credit with Euro and US high yield cash spreads tightening -6.5bps and -11.7bps respectively – the latter by the most in a month.

Despite the lack of follow through, there were some outsized winners. President Trump’s tweet about China agreeing to “reduce and remove tariffs on cars coming into China from the US” helped the S&P 500 autos sector to close +2.14% with Euro autos also surging +3.04%. In addition to that, we had the +4.30% jump for WTI oil (an extra +1% in Asia this morning) on the OPEC +/ Alberta production cuts stories we discussed yesterday. Markets are also digesting Qatar’s decision to exit OPEC from January 2019. Qatar has been a member since 1961 and while it’s not a huge volume contributor, the suggestion was that the country’s role as a diplomat had been significant. So a bit more uncertainty in the oil market. A reminder that the much anticipated OPEC meeting arrives Thursday/Friday.

Treasuries also reversed the post G-20 sell-off, which saw a +6.0bp climb this time yesterday result in a flat close. Two-year USTs did rise +3.5bps though leading to the 2s10s curve flattening to only 15bps (down to 13.5bps in Asia with 10yr another -3bps) and to the lowest in the current cycle. There was also some talk of 5 year notes inverting through both 3- and 2-year notes for the first time in this cycle as well. So the curve is getting very flat, especially at this point. As a reminder 2s10s has inverted ahead of all the last 9 recessions. The good news is we haven’t inverted yet and that the average time between the two is 16 months, with the quickest being 9 months. So we have some breathing space if history is your guide. The bad news is that we’re getting closer and closer and a circuit break to this flattening would be helpful to risk and the economy over the medium-term.

Several factors have combined to support the flattening move. The big rally in oil supported near-term inflation breakevens, with 2-year breakeven up +4.7bps and driving the entire move in nominal 2-year yields. Ten-year inflation breakevens were flat, explaining the flattening yield curve. WTI oil prices and 2-year breakevens have a high positive correlation of around 0.75. After both peaked on October 3, the former is down -30.5% and the latter has fallen by -57.0bps. At the long end, a steady flow of real money into Treasuries weighed on yields, possibly just due to rebalancing on the first day of the month after equities outperformed versus fixed income in November.

To a lesser extent, markets continued to focus on communications from Fed officials, though comments yesterday from Fed Board Members Clarida, Quarles, and Brainard broadly met expectations and confirmed the sentiment from Powell’s speech last week (note that Powell’s Wednesday congressional testimony has been cancelled and not yet rescheduled due to the President Bush’s funeral). They reiterated the recent emphasis on data dependency and described the economy as at or near full employment and inflation as at target.

Minneapolis Fed President Kashkari, a known dove who will be a voting member of the FOMC in 2019, departed somewhat from this assessment, saying that the economy “cannot be at maximum employment” if it continues to “create 200,000 jobs a month, month after month.”

In the US, the final manufacturing PMI was revised down 0.1pts to 55.3 however the more important ISM manufacturing printed at 59.3 (vs. 57.5 expected) and jumped 1.6pts from October. That’s still below the 61.3 high made back in August but was clearly reassuring in the face of some more mixed data of late. New orders (62.1 vs. 57.4 previously) and employment (58.4 vs. 56.8 previously) also lept higher, however the softer inflation story was maintained with prices paid falling over 10pts to 60.7 (vs. 70.0 expected). Some suggested that seasonals may have slightly distorted the decline. Another small negative was the fairly benign new export orders reading (52.2) which failed to climb from October.

Making less of a mark yesterday were the final global November manufacturing PMIs in Europe. Indeed the final Eurozone reading was revised up from the flash reading of 51.5 to 51.8 but was still the lowest since August 2016. That upward revision was helped by modest 0.2pts and 0.1pt upward revisions to Germany (to 51.8) and France (to 50.8), however these readings are also the lowest in 31 months and 26 months, respectively. Italy fell further below 50 to 48.6 and is now at a 47-month low, however, there was better news for Spain (52.6 and 3-month high) and Ireland (55.4 and 2-month high). Greece is even back to a 6-month high at 54.0, which means the 2.2pt differential over Germany is the highest based on data back to 2014. Meanwhile, there was a notable upward surprise in the UK (53.1 vs. 51.7 expected), a jump of 2pts from October and seemingly supported by domestic contracts picking up. In contrast, exports dropped for the second straight month with the report noting external weakness.

Outside of Europe, China catches the eye with the Shanghai Comp actually 27% ‘cheap’ compared to the implied PMI. Interestingly only the S&P 500 is pricing in an implied PMI above 50 with Europe in the 45-48 range and China 46.9. We try not to over-analyse these results, preferring to use them to look at more general levels of global under/over valuations. However, they do support our view that markets have probably got a bit too negative of late.

Over in Italy, two- and 10-year yields fell -17.4bps and -6.8bps yesterday as headlines suggested policymakers were receptive to less confrontational budget deficit targets. Prime Minister Conte is reportedly aiming to convince Salvini and Di Maio to shift the budget deficit from 2.4% to below 2.0%. The latest economic data (yesterday’s included), which has shown a marked slowdown in growth momentum amid the higher BTP yields, may be incentivising policymakers to back away from their more confrontational stance. However these were all headlines.

There’s no firm evidence as yet that the deficit target will be markedly lower but the momentum seems to be moving in that direction. However last night Ansa reported Italian Premier Conte as saying that he is not trying to cut the budget deficit to below 2%.

Last night in the UK, Parliamentary Speaker Bercow granted an emergency debate to determine whether or not Prime Minister May is in contempt of Parliament over her refusal to release the government’s full legal advice about the proposed Withdrawal Agreement. The debate will take place when Parliament convenes this morning, and it currently looks likely that May will lose a vote, since lawmakers from both sides of the aisle have expressed their interest to see the information.

As for the day ahead, it’s not the most exciting for data releases with the October budget balance for France and October PPI report for the Euro Area the only prints of note. There’s nothing of note in the US however we are due to hear from the Fed’s Williams this afternoon when he holds a press briefing at the NY Fed. BoE Governor Carney is also due to attend a hearing of the Treasury Committee on the Brexit Withdrawal Agreement.

https://www.zerohedge.com/news/2018...um-turns-hangover-curve-inversion-accelerates
 

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"We Are Suffering": NYC Cab Drivers Speak Out About Suicide Epidemc


by Tyler Durden
Mon, 12/03/2018 - 23:45

One of the unfortunate stories we’ve documented over the last several years has been the alarming number of New York City taxi cab driver suicides. The most recent of these tragic events occurred just last month when a cab driver in Queens became the eighth person over the past year to take his own life as the pressure of Uber and Lyft continues to make fares difficult to find while driving NYC taxi medallions lower in value.

Of course, taxi medallions used to be a retirement plan in and of themselves. Many cab drivers have borne significant financial burdens that they committed to, years ago, in hopes that their medallion would be of substantial value that they could retire on. But the influx of ride-sharing apps over the last five or six years has driven the price (and value) of medallions lower on a steady basis.



As shown in the chart above, the price of a medallion has tumbled from over $1 million around 2013 to just over $200,000 currently, the lowest in over a decade. As a result, many cab drivers who have invested their life savings in owning a medallion have seen themselves fall into financial ruin.

To get closer to the issue, Vice News recently sent out lifelong New York resident and comedian Colin Quinn to speak with a couple of cab drivers about not only the problems that they face, but the rash of suicides that have hit the industry.

The first driver he spoke to, told him off the bat that he had taken out a second mortgage in order to help pay off his medallion some years back. He shares with Colin his story and concludes that he must continue to pay off the medallion regardless of the fact that it has dropped near 80% in price.



Another driver was even more candid, telling Quinn that having Uber and Lyft in the city weren't even too big of a deal - namely because he, a black man, had a very difficult time getting a cab when he wasn’t working and needed to move around the city. But he told Quinn that when Uber and Lyft began to lower prices - something they could do as a result of not paying a cut to the city like cab drivers have to - then it became unfair, and that's when taxi drivers "lost".

A third cabdriver told Quinn that he had averaged about 3.6 passengers per hour before Uber and Lyft came into the city - a rate that generally allowed him to meet the budget he had set for himself. Now, he says he sometimes picks up just two passengers or less per hour. He also told Quinn he estimates about 35% less passengers overall for cabdrivers as a result of the now 80,000 Uber and Lyft drivers in the city.



One cab driver - a friend of a driver who recently killed himself - told Quinn that the man who killed himself was depressed and mortified as a result of his approaching retirement while feeling he wouldn’t be able to make his basic utility bills and living expenses after working for decades.

Finally, one of the drivers Quinn caught up with, Lal Singh, had spoken to the NYTimes in October. Back then, he told the Times: "When I hear that somebody did suicide, I was thinking about me. I’m going to be one of them one day.”

Singh owes about $6200 per month on the medallion he bought in 2000 and spends his day driving the length of Manhattan, top to bottom, looking for passengers. "When you have nothing to do, we are suffering. What are you living for?" he continued.

As we discussed previously here , New York City appears set to finally implement some changes to attempt to protect its cabdrivers – the only question is whether it’s too little too late at this point.

You can watch the full Vice Media video here.

https://www.zerohedge.com/news/2018...c-cab-drivers-speak-out-about-suicide-epidemc
 

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Naked Capitalism Links 12/04
https://www.nakedcapitalism.com/2018/12/links-12-4-18.html

TBP - 10 Tuesday AM Reads 12/04
https://ritholtz.com/2018/12/10-tuesday-am-reads-220/

SA - Market News Live Feed 12/04
https://seekingalpha.com/market-news

CWS - Morning News: December 4, 2018
http://www.crossingwallstreet.com/archives/2018/12/morning-news-december-4-2018.html

TCS - Risk Premia Forecasts: Major Asset Classes | 4 December 2018
http://www.capitalspectator.com/risk-premia-forecasts-major-asset-classes-4-december-2018/

SA - Wall Street Breakfast: Sterling Rallies On Latest Brexit Development 12/04
https://seekingalpha.com/article/42...st-sterling-rallies-latest-brexit-development

MtM - Stock Rally Arrested, but Bond and Oil Advance Continues, leaving Dollar in a Lurch 12/04
http://www.marctomarket.com/#!/2018/12/stock-rally-arrested-but-bond-and-oil.html
 

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China Imports First U.S. Crude in Two Months But Traders Still Wary
December 3, 2018 by Reuters


Igor Grochev / Shutterstock





By Florence Tan and Chen Aizhu SINGAPORE/BEIJING, Dec 3 (Reuters) – China imported its first U.S. crude oil cargo in around two months last week, according to industry sources and Refinitiv Eikon data – a deal made by an independent “teapot” refiner as larger players held off amid trade tensions.

Chinese buyers have largely avoided U.S. oil during the two countries’ trade war, fearing the imposition of tariffs. China had risen to become the largest importer of U.S. crude oil in 2018 before cutting off shipments as the trade war escalated.

The world’s two largest economies agreed over the weekend to stop imposing new tariffs on each other’s goods for 90 days, though Chinese oil traders said they were still wary and looking for direction from Beijing.

Independent refiner Shandong Yuhuang Petrochemicals received its first-ever U.S. crude shipment last week, a company executive said.

“We decided to buy this U.S. cargo as it has good value for money,” said the executive, who declined to be named due to company policy.

For the first seven months of 2018, China imported an average of 377,700 barrels of U.S. crude per day (bpd), according to U.S. Energy Department figures, surpassing Canada as the biggest foreign buyer of U.S. barrels.

But crude imports from the United States slumped to the lowest in more than two years after Beijing threatened to impose tariffs in August – even though it later took U.S. crude off its sanctions list.

Chinese customs data last recorded imports from the United States in September and a search in its database did not show any imports in October.

The White House said in a statement on Sunday that Beijing had now agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products.

Still, Chinese buyers remained wary, waiting for further instructions from Beijing.

“We’re still gauging the policies… It’s only a 90-day window,” a Chinese oil buyer said, adding that the oil could arrive between January and March.

Very Large Crude Carrier (VLCC) New Courage discharged about 1 million barrels of Southern Green Canyon crude at Lanshan in Shandong province on Nov. 28, Refinitiv Eikon data showed.

Unipec had chartered the super tanker to ship American oil to China. New Courage first called at Cezi Island in Zhoushan, Zhejiang province, where it offloaded on Nov. 23 about 260,000 barrels of Latin American crude, according to the data.

Sinopec, the parent company of Unipec, declined comment.

The Chinese oil buyer added that U.S. Mars crude which has been offered at about $2 a barrel above Dubai quotes for delivery to north Asia remained uncompetitive with Middle East oil.

But West Texas Intermediate (WTI) Midland which was recently sold at about $2 a barrel above dated Brent could work, he said.

Unipec and Royal Dutch Shell Plc are seeking to book supertankers to load crude in the U.S. Gulf Coast in late December for China, traders said, but added that these ships have options to be diverted elsewhere in Asia.

(Reporting by Chen Aizhu in BEIJING and Florence Tan in SINGAPORE Editing by Manolo Serapio Jr. and Marguerita Choy)

(c) Copyright Thomson Reuters 2018.

https://gcaptain.com/china-imports-first-u-s-crude-in-two-months-but-traders-still-wary/
 

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Rising Ship Supply Helps Ease LNG Charter Rates
December 4, 2018 by Reuters


Photo: By Igor Grochev / Shutterstock



By Ekaterina Kravtsova LONDON, Dec 4 (Reuters) – Inflated spot charter rates for liquefied natural gas (LNG) tankers are easing as more ships becoming available, which could help increase LNG trade if Asian demand rises in coming months.

LNG charter rates are a key component of spot LNG trade, dictating the way the super-cooled gas is transported. Charter rates usually follow the price of LNG, which has fallen since September due to sluggish demand from Asian buyers.

Rates have remained high for most of this year, hitting around $195,000 last month.

Not many spot Atlantic cargoes have travelled east in recent months due to inflated shipping rates, with some companies having to arrange cargo swaps to reduce costs.

But as more vessels become available for spot charters, rates have dropped to around $160,000 per day at the end of November, shipbrokers told Reuters. One source said the spot rate for a modern vessel reached $140,000 per day on Tuesday.

Four ships became open on Monday for December charter, one industry source said, while another predicted that overall up to 10 will become available for charter this month, with more coming to the market after floating cargoes are unloaded.

Additionally, Chinese energy major CNOOC Ltd. offered late last month to charter out the British Emerald LNG tanker after it hired the ship from oil and gas company BP earlier this year, two shipbrokers in Singapore said.

Commodities trading firm Trafigura was offering the Gaslog Santiago tanker for up to three months from early December, the industry sources said.

Global LNG Shipping Rates Double Since End-August, Slowing Asia Deliveries

However, rates are still higher than last year’s level, between the months of December and March, when they were mostly below $100,000 per day.

“Shipping [rates are] very high, there is not much room for work at the moment,” an LNG trader said, referring to how this had limited movements from the Atlantic to the Pacific basin.

Demand for early next year is still mostly from the Asia-Pacific basin, such as U.S.-based ExxonMobil, Global mining and resources company BHP and the Australia Pacific LNG project which are looking for ships to load from Australia-based export plants in the first half of January.

But some shipbrokers said charter rates will likely continue to fall, as supply could outweigh demand.

(Reporting by Ekaterina Kravtsova; editing by Nina Chestney and Alexander Smith)

(c) Copyright Thomson Reuters 2018.

https://gcaptain.com/rising-ship-supply-helps-ease-lng-charter-rates/
 

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Warm Welcome for BIMCO Cyber Security Clause for Shipping Contracts
December 4, 2018 by The Loadstar


Gerhard Roethlinger / Shutterstock




By Mike Wackett (The Loadstar) – BIMCO, the world’s largest shipping association, is finalising a cyber security clause for charter party agreements and other contracts.

The move follows a spate of high-profile cyber attacks on Maersk, Cosco and shipbroker Clarksons.

The BIMCO cyber security clause will require parties to the contract to have “plans and procedures in place to protect its computer systems and data, and to be able to respond quickly and efficiently to a cyber incident”.

The association said: “Mitigating the effect of a cyber security breach is of paramount importance. The clause requires the affected party to notify the other party quickly, so that they can take the necessary counter-measures.”

The association added that the cyber clause was designed for use in a broad range of contracts, which means it can also cover arrangements with service providers, such as brokers and agents.

It will stipulate that, in the absence of an amount agreed during negotiations, the claims liability of each party to the contract will be limited to a maximum of $100,000.

BIMCO said the clause would fulfill two important functions: to raise awareness of cyber risks; and provide a mechanism for ensuring that parties to the contracts have procedures and systems in place to help minimise the risk of an attack, but if it does happen, to “mitigate the effects of such an incident”.

The clause is being drafted by a small team led by Inga Froysa, chief legal and compliance officer of Olso-based shipping group Klaveness, in association with other companies, including the UK P&I Club, and is due to be published in May next year.

Supporting the BIMCO team is law firm HFW. Senior associate William MacLachlan said: “As the shipping industry wrestles with how to respond to the cyber threat, this clause aims to lay down a benchmark for cyber security measures and explicitly address the question of liability for a cyber security incident.”

HFW is also helping BIMCO draft charter party clauses relating to the IMO’s 0.5% sulphur cap regulations, which become law on 1 January 2020.

The NotPetya virus that hit Maersk’s booking and operating systems in summer 2017 cost the transport and logistics group around $300m in contingency costs and lost bookings, although it arguably suffered a far greater cost to its reputation, despite the fact it was not the intended victim but rather “collateral damage”, in the words of industry analyst Lars Jensen.

Shipbrokers The Loadstar spoke to today have welcomed the BIMCO cyber clause, one broker saying it was “long overdue” and another that the attack on Clarksons in November last year had “focused the industry” on the need to protect itself.

Meanwhile, Naval Dome, an Israel-based cyber security platform developer, praised BIMCO for the inclusion of a limited liability clause. Chief executive Itai Sela said it could make cyber insurance-related policies a “potentially more attractive proposition for the insurer”.

The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.

Check them out at TheLoadstar.co.uk, or find them on Facebook and Twitter.

https://gcaptain.com/warm-welcome-for-bimco-cyber-security-clause-for-shipping-contracts/
 

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Ukraine Resumes Grain Shipments from Sea of Azov
December 4, 2018 by Reuters


Cranes are seen in the Azov Sea port of Mariupol, Ukraine December 2, 2018. REUTERS/Gleb Garanich



KIEV, Dec 4 (Reuters) – Ukraine said on Tuesday it had resumed grain shipments from the Azov Sea, blocked for around 10 days after a military standoff with Russia in the Kerch Strait off Crimea. Russia seized three Ukrainian naval ships and their crews on Nov. 25 after opening fire on them, accusing them of illegally entering its territorial waters.

Ukraine denied its ships had done anything wrong and accused Russia of military aggression. Its president, Petro Poroshenko, imposed martial law on Nov. 26 in parts of the country deemed most vulnerable to Russian attack.

“The passage of vessels with agricultural products through ports in the Azov Sea has been unlocked,” Ukraine’s agriculture ministry said on Tuesday in a statement.

“The loading of grain to vessels through the ports of Mariupol and Berdyansk is restored and carried out in regular mode,” it said.

Earlier, Ukraine’s infrastructure minister Volodymyr Omelyan had said the two ports – vital for eastern Ukraine’s economy – had been “partially unlocked” with the restoration of some free movement through the Kerch Strait.

Germany welcomed the news but also repeated its call for Russia to release the 24 Ukrainian sailors who are facing charges of illegally entering Russian waters.

“We will try to ensure that this conflict does not result in a serious crisis,” Foreign Heiko Maas told reporters in Brussels after a meeting of NATO foreign ministers also attended by officials from Ukraine and Georgia.

Germany wants to de-escalate the situation and work toward a political solution, he said, adding there would be further discussions on the issue this week but gave no details.

German Chancellor Angela Merkel discussed the Azov Sea standoff with Russian President Vladimir Putin on the sidelines of the G20 summit in Argentina.

(Reporting by Pavel Polityuk in Kiev and Andrea Shalal in Berlin Editing by Gareth Jones)

(c) Copyright Thomson Reuters 2018.

https://gcaptain.com/ukraine-resumes-grain-shipments-from-sea-of-azov/
 

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Something Wicked This Way Comes: Economic Meltdown
GoldSilver (w/ Mike Maloney)


Published on Dec 4, 2018
Mike Maloney covers all the trouble brewing in the global economy in this 11-minute video – including data he promised to show you last week. The Australian real estate bubble, Putin's warning for the US dollar, and more on the financialization of government. If you enjoyed watching this video, be sure to pick up a free copy of Mike's bestselling book, Guide to Investing in Gold & Silver: https://goldsilver.com/buy-online/inv...
 

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Yield Curve Inverts - Recession Ahead
Silver Fortune


Published on Dec 4, 2018
Portions of the U.S. treasury bond yield curve have now inverted. Though it may seem insignificant to some, the manipulation we've witnessed in the bond market in the last 10 years may mean it should have inverted long ago.

Support Silver Fortune through Patreon: https://www.patreon.com/silverfortune

Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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Ira Epstein's End of the Day Financial Video 12 4 2018
Ira Epstein


Published on Dec 4, 2018
 

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Ira Epstein's End of the Day Agriculture Video 12 4 2018
Ira Epstein


Published on Dec 4, 2018
 

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Dow Plunges 800 Points, Palladium Rises Above Gold, Signs Of Recession?
SalivateMetal


Published on Dec 4, 2018
 

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The Great Bank Heist of 1933.
maneco64


Published on Dec 5, 2018
 

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How the rich use political donations to ruin America
RT America


Published on Dec 4, 2018
Economist Richard Wolff, founder of Democracy at Work, joins Rick Sanchez to explain how moneyed elites stay in power by making it impossible to win political office without investing millions, resulting in “the form of democracy without the content.”
 

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Get Ready For The “Real World,” Says Frank Holmes
Kitco NEWS


Published on Dec 4, 2018
2019 will see the first time corporate America operates in non-zero rate environments, or what Frank Holmes, CEO of U.S. Global, considers the “real world.”

“I think you’re going to get more volatility because rates are above zero,” Holmes told Kitco News.
 

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US Futures, Global Stocks Pare Losses After China, "Tariff Man" See Deal


by Tyler Durden
Wed, 12/05/2018 - 07:39


While U.S. cash markets will be closed to mark the death of President George H. W. Bush, S&P futures were open and rebounded modestly from yesterday's furious selloff, rising 0.5% after yesterday's 3.2% drop, as "Tariff Man" Trump said he sees a China trade deal coming "either now or into the future"...



... while European and Asian stocks trimmed losses after China pledged to start delivering on trade agreements reached with America, provide a modest risk backstop.



China’s announcement, another twist in the trade war saga, was a much-needed dose of positive news, as it ended days of silence from the Asian nation following a weekend meeting between Presidents Donald Trump and Xi Jinping. Upbeat statements from Trump had not been immediately matched by Beijing, helping fuel the equity tumult which sent US stocks plunging over 3% on Tuesday.



On Wednesday morning, a happy Trump tweeted an excerpt from a Bloomberg article according to which "China officially echoed President Donald Trump’s optimism over bilateral trade talks" and noting that "Chinese officials have begun preparing to restart imports of U.S. Soybeans & Liquified Natural Gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start “immediately” buying U.S. products."

Global markets were left reeling after Tuesday’s steep sell-off in New York, but nerves steadied after China’s Commerce Ministry said on Wednesday morning that Beijing will start to "quickly implement" specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map.”

Asian stocks slid across the board on Wednesday, dragged down by Wall Street’s tumble as sharp declines in long-term U.S. Treasury yields and resurgent trade concerns stoked investor worries about global economic growth. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3 percent. The Shanghai Composite Index slipped 0.6% and Japan's Nikkei dropped 0.5 percent, but rebounded from session lows. Australian stocks lost 0.8%, pressured by global losses. The mood further soured after data showed Australia's third-quarter growth fell short of expectations. The Australian dollar D4 was down 0.7 percent at $0.7288.

Worries about U.S. bond markets signaling an impending recession, and a still rumbling trade war between the world’s top two economies, sent European shares to a 2 week low, yet while the Stoxx Europe 600 Index slumped as much as 1.2%, hitting the lowest since Nov. 23, and traded down 0.7% last, that was far less than the 3.2% plunge recorded by the S&P 500 a day earlier. Financials were the biggest drag on European shares as investors dumped sectors highly sensitive to economic growth. Europe’s bank index fell 1.7%, while oil and mining sectors fell 1.5 percent each.

“Cyclicals are really dependent upon accelerations in growth, they’re very real economy sensitive for higher revenues,” said John Ricciardi, CEO and lead portfolio manager at Kestrel Investment Partners. The inversion of parts of the U.S. yield curve means investors are beginning to panic about future growth and inflation, Ricciardi added.

Chipmakers AMS, STMicroelectronics and Infineon fell 1.2 percent to 4.5 percent following a sharp drop in Apple and chip stocks on Wall Street, while German carmakers outperformed the DAX as investors digested what seemed a relatively positive outcome from auto executives’ meeting at the White House. President Trump pressed carmakers to increase investments in the United States, something the executives said they planned to do but wouldn’t be able to if the administration went ahead with threatened tariffs.

Concerns about slowing U.S. growth have accelerated the flattening of the yield curve, which has preceded the last seven US recessions. “The market decline in the U.S. overnight and the flattening of the yield curve reflect that economic growth momentum is taking over as the primary concern for investors, even as the latest ISM manufacturing data is holding up well,” wrote Tai Hui, market strategist at J.P. Morgan Asset Management. On Wednesday, the Treasury cash/futures will remain closed.



The German curve steepened slightly, yields lower by ~1bp across the curve and touching the lowest since mid-2017 amid the risk-off mood, while Italian bonds jumped. UK Gilt yields rose by ~4bps as the curve bear flattens, widening 4.5bps to Germany after yesterday’s Brexit votes. BTPs push higher, supported by decent demand at the Spanish bond auctions and a turnaround in FTSE MIB off the lows.

The dollar initially advanced versus all major peers before reversing and turning slightly lower on the day. The Aussie dollar led losses among majors after 3Q GDP data missed forecasts, adding to fears of a global slowdown. The pound climbed as investors digested legal advice over Prime Minister Theresa May’s Brexit deal, which confirmed that the so-called customs backstop could remain “indefinitely.”

In the latest Brexit news, legal advice has been published states "backstop could mean the UK is subject to protracted and repeating rounds of negotiations"; according to BuzzFeed. Adding that “these talks could still be taking place years later, and the UK would be breaking the law if it left the backstop without the EU’s agreement”. Sky News reported that the UK does not need to pass legislation to revoke Article 50.

Telegraph's Rothwell Tweets "EU sources adamant that there can be no Withdrawal Agreement without a fully legally operational backstop...even if MPs reject the deal and/or May resigns". UK Trade Secretary Fox states that in the wake of last night's vote in Parliament, there is a chance that there might not be a Brexit.

In commodities, WTI (-0.2%) and Brent (-0.3%) bounced off lows as the latest OPEC+ meeting goes underway, with the Omani Oil Minister hinting at a 3-6 month production cut ahead of tomorrow’s key OPEC meeting. Furthermore, The WSJ reports that OPEC delegates are concerned that Saudi and Russia are making output agreements without input from OPEC; it was also stated that the Russia-Saudi relationship was a key factor in Qatar’s withdrawal. Markets will be looking ahead to the postponed EIA weekly data coming out tomorrow following the unexpected API build, alongside the OPEC meeting with emphasis on any decision to cut oil production that may arise. Reports today by RIA stating that OPEC wants Russia to reduce oil output by a minimum of 300k BPD. However, TASS has reported that Russia is only seeking a symbolic production cut which follows previous reports that they would only agree to a 140k BPD cut. Elsewhere, Libya’s NOC stated that all port terminals are shut due to bad weather, with storage capacity at Zawiya (usual production of 120k BPD) affected and the 300k BPD Sharara oil field production to be cut by 50% tomorrow morning.

Gold has weakened from the 5-week high reached in the previous session, as the dollar is marginally firmer. The majority of base metals have fallen due to being weighed on by US-China trade tensions following US President Trump commenting that there will have a real deal or no deal at all with China.

Treasury markets are closed for a day of mourning in the U.S. in honor of ex-President George H.W. Bush. Below is a schedule of US market closure on Dec. 5

  • CME Globex trading hours for Interest rate products will close at their regular time on Tuesday Dec 4th and will not reopen until their regularly scheduled time on Wednesday Dec 5th 2300GMT/1700CST.
  • Both the open outcry and CME Globex trading session for FX products will have normal trading hours on Wednesday Dec 5th
  • CME Globex trading hours for CME Group U.S.-based equity products on Wednesday Dec 5th will include an abbreviated
  • session, closing after overnight trading at 1430GMT/0830CST and reopening at their regularly scheduled time on Wednesday Dec 5th at 2300GMT/1700CST
  • New York Stock Exchange, NYSE American, NYSE National, NYSE Arca and NASDAQ have announced that they will be closed for trade on Wednesday Dec 5th
  • ICE Futures U.S is open for trading, Wednesday Dec 5th will be a regular ICE Clear US business day

Market Snapshot
  • S&P 500 futures up 0.4% to 2,713.75
  • STOXX Europe 600 down 0.7% to 355.78
  • MXAP down 1% to 153.65
  • MXAPJ down 1.3% to 495.24
  • Nikkei down 0.5% to 21,919.33
  • Topix down 0.5% to 1,640.49
  • Hang Seng Index down 1.6% to 26,819.68
  • Shanghai Composite down 0.6% to 2,649.81
  • Sensex down 0.8% to 35,836.22
  • Australia S&P/ASX 200 down 0.8% to 5,668.35
  • Kospi down 0.6% to 2,101.31
  • German 10Y yield fell 0.8 bps to 0.255%
  • Euro down 0.02% to $1.1341
  • Italian 10Y yield rose 1.0 bps to 2.789%
  • Spanish 10Y yield fell 1.0 bps to 1.475%
  • Brent Futures down 1% to $61.45/bbl
  • Gold spot down 0.2% to $1,236.00
  • U.S. Dollar Index up 0.03% to 97.00
Top Overnight News
  • China said Wednesday the trade meeting with the U.S. was “very successful” and is “confident” of implementing the results agreed upon at the talks, but didn’t provide any further details on the outcome
  • Federal Reserve Bank of New York President John Williams gave an optimistic review of the U.S. economy, reiterated his support for further gradual interest-rate increases and expressed no concern that market participants have dialed back expectations for policy tightening in 2019
  • Australia’s economy slowed last quarter as commercial construction fell and household spending slowed, casting doubt on the central bank’s outlook and all but ruling out an interest-rate increase next year
  • Bank of Japan Deputy Governor Masazumi Wakatabe gave a more cautious view on the outlook for prices as economists increasingly see inflation weakening over the next year
  • With less than 48 hours to go before a critical OPEC gathering, Saudi Arabia and Russia are set to meet in Vienna for a make-or-break preparatory meeting on Wednesday that’s going to set the direction for the oil market
  • Italy’s Di Maio says ’climate is changing’ in budget talks with EU
  • U.K. Trade Sec Fox says possibility of no Brexit if parliament rejects deal
  • Trump believes will make China deal ’either now or into the future’
  • China calls U.S. trade meeting ’very successful’; will quickly implement
  • OPEC+ nations didn’t yet discuss proposals to cut production: Kuwait Min

Asian stock markets were pressured following the sell off on Wall Street where doubts regarding a US-China trade deal saw all US majors drop over 3% in which the S&P 500 fell below its 200DMA and DJIA lost near 800 points on the day. This weighed heavily on the China-sensitive sectors in the US such as Industrials, Materials and Tech, while Financials took the biggest hit amid a slump in yields and ongoing yield-inversion. ASX 200 (-0.8%) was led lower by tech and financials with disappointing Q3 GDP adding to the downbeat tone, while Nikkei 225 (-0.5%) also finished negative albeit off worse levels as USD/JPY attempted to nurse losses. Elsewhere, Hang Seng (-1.6%) and Shanghai Comp. (-0.6%) conformed to the downbeat tone but with the declines in the region less drastic than the bloodbath observed stateside following stronger than expected Chinese Caixin Services PMI which jumped to a 5-month. Furthermore, there was a seemingly concerted effort by some officials to dispel the trade-related doubts in which White House Trade Adviser and ‘China hawk’ Navarro suggested to give talks a chance and that it is premature to lose faith in US-China discussions, while Mofcom also declared the US-China trade meeting was successful although Trump remained unrelenting and reiterated his threat of tariffs if they fail to reach a deal. Finally, 10yr JGBs initially rose to levels last seen over 2 years ago amid safe-haven demand and as they tracked the upside in T-notes. However, prices then pulled back to return flat after the BoJ’s bond buying operation in which it upped purchases in the 10yr-25yr maturities by JPY 20bln, as the bank is on course to reduce monthly purchases of superlong JGBs by JPY 150bln if it continues at the current pace given the previously announced reduction of operations for December.

Top Asian News
  • India’s Sensex Extends Decline as RBI Holds Rates, Policy Stance
  • IPhone Lens-Maker Largan Warns of December Sales Slide
  • India Holds Interest Rates After Inflation Undershoots Forecast
  • Japan Eases Changes for Tariffs on Delayed Solar Projects
European bourses (Eurostoxx -0.9%) have followed suit from their US and Asia-Pac counterparts to trade lower across the board as the trade-inspired optimism seen at the start of the week continues to dissipate. China’s Mofcom declared the USChina trade meeting as successful, although were said to be puzzled and irritated by the Trump administration's triumphant rhetoric. This came after Trump yesterday branded himself as a ‘Tariff Man’ and also tweeted that the US will either have a real deal with China or no deal at all and that the US will levy major tariffs against imports of Chinese products if a deal is not made with China. In terms of sector specifics, all ten majors trade in the red with IT, materials and industrials lagging their peers. Downside in financial names has also been hampered by the current yield environment as markets continue to speculate over the Fed’s 2019 rate hike plans in lieu of recent comments from Fed Chair Powell and with the German 10yr yield briefly slipping below 0.25%. UK homebuilders have seen some reprieve this morning (Berkeley Group +8.1%, Taylor Wimpey +6.3%, Barratt Developments +6.5%) after Barclays highlighted the sector as a potential major beneficiary of a Brexit deal being passed in Parliament. Individual movers include Shire (+2.6%) who stand near the top of the Stoxx 600 after amid shareholder approval for their merger with Takeda Pharmaceutical. Elsewhere, broker downgrades have placed weight on names such as Hargreaves Lansdown (-3.3%), Saint Gobain (-3.2%) and Osram Licht (-1.7%).

Top European News
  • Weak Euro-Area Growth Is Here to Stay as Italy Recession Looms
  • U.K. Services Unexpectedly Weaken to Worst Since July 2016
  • Yandex Starts Selling $270 Smartphone to Rival Google in Russia
  • Telia Sells Uzbek Unit That Cost It Almost $1 Billion in Fines
In FX, AUD,NZD – AUD the major G10 underperformer in light weaker-than-expected Q3 Aussie GDP (slowest pace of growth in two years, and well below consensus) which dragged AUD/USD to sub-0.7300 levels vs. highs of 0.7356 and not far from 0.7400 in recent sessions. Meanwhile, AUD/NZD slumped through 1.0600 to circa 1.0525, to the benefit of the Kiwi that managed to maintain 0.6900+ vs. the buck.

  • GBP – Choppy trade for the Pound amid ongoing Brexit pandemonium after UK PM May suffered a hat-trick of defeats, giving more power to Parliament if her deal is voted down in next week’s meaningful vote. Cable currently trying to recover having slumped to a new YTD low yesterday at 1.2659 (ahead of the psychological 1.2650), with a rebound through 1.2700 and 1.2750, albeit amidst a generally softer USD and despite a worryingly weak services PMI (headline just above 50). Similarly, Sterling has regained composure against the EUR, with the cross back down below 0.8900 even though the single currency has pared losses elsewhere amid ECB sourced talk about discussions over further policy normalisation next year. Indeed, EUR/USD is back above 1.1350 from close to 1.1300 at one stage.
  • CAD – USD/CAD is within striking distance of 1.3300 (vs. yesterday’s lows of 1.3160) as retreating oil prices weigh on the Canadian currency with traders also eyeing the BoC interest rate decision later today. No change in the policy is expected though focus will be on the tone of the statement given the recently battered energy complex. For a more detailed preview, refer to our research suite or headline feed.
  • EM – Lira trades around the middle of a 5.4518-.3345 range vs. the Greenback after the CBRT set their inflation target at 5% (vs. November CPI at 21.62%) and pledged to do more to bring consumer prices back down, cushioning the TRY from wider bearish and risk averse sentiment.
  • DXY – Given all the above, the broad Dollar and index have handed back some of Tuesday’s pronounced gains made amidst the Wall St. selloff, and ahead of today mark of respect day for passed President George H.W Bush. DXY pivoting 97.000 within a range 97.206-96.827.

In commodities, WTI (-0.2%) and Brent (-0.3%) bounced off lows as the JMMC meeting goes underway, with the Omani Oil Minister hinting at a 3-6 month production cut ahead of tomorrow’s key OPEC meeting. Furthermore, The WSJ reports that OPEC delegates are concerned that Saudi and Russia are making output agreements without input from OPEC; it was also stated that the Russia-Saudi relationship was a key factor in Qatar’s withdrawal. Markets will be looking ahead to the postponed EIA weekly data coming out tomorrow following the unexpected API build, alongside the OPEC meeting with emphasis on any decision to cut oil production that may arise. Reports today by RIA stating that OPEC wants Russia to reduce oil output by a minimum of 300k BPD. However, TASS has reported that Russia is only seeking a symbolic production cut which follows previous reports that they would only agree to a 140k BPD cut. Elsewhere, Libya’s NOC stated that all port terminals are shut due to bad weather, with storage capacity at Zawiya (usual production of 120k BPD) affected and the 300k BPD Sharara oil field production to be cut by 50% tomorrow morning. Gold has weakened from the 5-week high reached in the previous session, as the dollar is marginally firmer. The majority of base metals have fallen due to being weighed on by US-China trade tensions following US President Trump commenting that there will have a real deal or no deal at all with China. Separately, China’s construction steel rebar is up

US Event Calendar
  • 7am: MBA Mortgage Applications, prior 5.5%
  • 2pm: U.S. Federal Reserve Releases Beige Book
DB's Jim Reid concludes the overnight wrap
I’m really not sure where to start today. A -3% day for US equities, the worst day for US cyclicals vs defensives since June 2016, a chaotic day for Brexit and the UK constitution but one that might be seen as a positive turning point when the dust settles, US 2s10s dipping below 10bps at one point, expectations overnight from our US economists that this cycle will last for several more years, or 10yr bund yields closing at 0.26% and within a whisker of YTD lows.

If you forgive the indulgence let’s start with a long intro about the topic de jour - namely the US yield curve. By the end of H1 2019, this current US economic expansion will become the longest on record covering 34 expansions and 33 recessions since the early 1850s. Economic cycles don’t die of old age but need a catalyst. However, given the age of this cycle it’s inevitable markets are sensitive to some of the traditional catalysts starting to signal a downturn ahead. Our favourite lead indicator for the US remains the yield curve and the sharp move over the last couple of days has certainly scared the market.

2s10s is the most followed measure (now +11bps, compared to +22bps last Friday and +78bps in February), and it has inverted ahead of every one of the last nine US recessions. However, it has taken around a year and a half, on average, between the inversion and the recession. The shortest length of time has been 9 months. So while this flattening move is worrying, it would still be consistent with average history to avoid a recession until the end of H1 2020 even if we inverted today. So this countdown clock hasn’t been started yet but it’s getting closer. With 5 year yields below 3 and 2 year yields since Monday night, we have now pressed the button on a less-commonly-followed timer clock. 3s5s and 2s5 have also inverted before each of the last 9 recessions but have taken between 18 months and 2 years to lead to the median recession.

Many prefer 3m vs 10 years as a predictor. The good news is that this curve is still at +48.6bp (even with a-14bps drop yesterday). However, we only have monthly data for 3m bills before the early 1970s, so it’s hard to repeat the same exercise comprehensively. In the 7 recessions over this later period, the 3m10y curve has again always inverted first but has a shorter lead time to recession of typically between 12-18 months.

So to sum up, the good news is that 3m10yr is a fair way from inverting but has a shorter time lag to recession than 2s10s, which is getting closer and closer to inverting. The bad news is that 2s5s and 3s5s has inverted and the countdown clock of around 2 years could justifiably be started. The fact that markets are getting so worried by the flattening is credible, but if average history repeats itself, will they really have the energy to remain permanently bearish for the next 18 months to 2 years? The alternative theory is that Goodhart’s law might apply. That is, once a market focuses on a measure specifically it ceases to be a useful lead indicator.

We appreciate that there are more sophisticated recession models and also many rebuttals as to why this time is different, but why do we think the yield curve (YC) matters? We think it helps predict animal spirits in a capitalist economy like the US. When the YC is steep economic agents and investors should be very happy to invest out the curve and in long duration economic projects as their potential returns are much higher than their funding costs. To flip this round, as the curve inverts, the same people should be more incentivised to park money at the front end at relative high (and safe) rates relative to the lower potential returns on offer further out the curve (and with risk). As such, animal spirits slowly drain away - albeit with a lag. In this cycle, academics/strategists/ economist often dismiss the YC as they feel the flattening reflects ultra-low term premium rather than signs of a slowdown ahead. So is this time different?

Our US economists think it is and still expect this expansion to last for several years and have detailed this in their 2019 outlook out overnight. They have edged their 2019 US growth number down to 2.4% but have lifted 2020 by 0.5% to 1.8% and have 2021 at 1.6%. Core PCE inflation is now expected to rise to 2.2% in 2019 and 2020, and moderate slightly in 2021. They have reduced Fed hikes for 2019 from four to three with the Fed taking a break, or pause, from their gradual quarterly pace of tightening most likely in Q3. That should be followed by one last rate increase in 2020, leaving DB terminal rate for this cycle unchanged at 3.4%. See the report for more details.

If these forecasts are correct then financial markets currently have it all wrong as there is little doubt that the curve flattening is massively scaring investors at the moment. Led by the yield curve sensitive banks (-4.74% for the worst day since February), the S&P 500 closed down -3.24% last night with the DOW (-3.10%) and NASDAQ (-3.80%) down a similar amount. Cyclical sectors overall underperformed defensives by -2.14%, which was their worst relative performance since June 2016. Prior to the sell-off accelerating, the STOXX 600 ended -0.76% while US and EUR HY spreads finished +11.1bps and +8.7bps wider respectively.

The equity carnage was severe, and there were some trade-related headlines, but the biggest story at the moment is indeed the Treasury curve. The 2s10s curve flattened fairly aggressively once again yesterday to 11.4bps (-3.3bps) – a new cycle low – after at one point dipping into single figures. The 2s5s (currently at -1.1bps) and 3s5s (-2.1bps) curves also remain inverted. The curve wasn’t helped by NY Fed President Williams’s comments, in which he gave a rosy assessment of the US economy and answered a question about the yield curve by saying “that with the economy on a very strong path with a lot of momentum, especially with some of the fiscal ... tailwinds and other factors, that further gradual increases over the next year or so still makes sense.” This supported front-end yields in a big risk off day, with the two-year Treasury yield down only -2.2bps versus the 10-year bond’s -5.6bps rally.

Getting overshadowed in the Treasury move is the fact that Bunds are amazingly down to 0.263% now following a -4.3bps rally yesterday. The May low was 0.260% so we’re now within a whisker of that and you then have to go back to June 2017 to find the next low marks. Incredible really that we’re into the last month of ECB QE, German inflation is above 2%, European growth remains above trend and Bunds are where they are.

Back to trade, the latest bump in the road came after White House adviser Kudlow told Fox News that a deal with China to lower tariffs on US-made cars “hasn’t been signed and sealed and delivered yet”. President Trump also described himself as “a tariff man” and said that tariffs are “the best way to max out our economic power.” On the other hand, he did say that “the negotiations with China have already started” and that “unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi”. The same tweet also went on to say that Lighthizer would be working closely with Mnuchin, Kudlow, Ross and Navarro “on seeing whether or not a REAL deal with China is actually possible”. So mixed messages on the likelihood of an eventual deal.

Overnight in Asia the markets are trading lower following the lead from Wall Street with the Nikkei (-0.85%), Hang Seng (-1.54%), Shanghai Comp (-0.21%) and Kospi (-0.67%) all lower alongside most markets. However, bourses are off their lows as China has finally broken its silence over the weekend thaw in the trade war. They said that the trade meeting with the U.S. was “very successful” and are “confident” of implementing the results agreed upon at the talks while adding that they will quickly start to implement specific items where there’s consensus with the U.S., and will push forward on trade negotiations with the U.S. within the 90-day "timetable and road map." Futures on S&P 500 are up +0.49% this morning.

In terms of overnight data releases, China’s November Caixin composite PMI came in at 51.9 (vs. 50.5 last month) as services PMI saw a huge upside surprise at 53.8 (vs. 50.7 expected). Japan’s November composite PMI printed at 52.4 (vs. 52.5 in last month) with the services PMI at 52.3 (vs. 52.4 in last month).

Oil traded flat yesterday but is down c. -2% this morning. We go into tomorrow’s OPEC/OPEC+ meeting up over 6% from the lows of last week. Prices had gained as much as +3.06% earlier in the session yesterday, before Saudi Arabia’s energy minister poured damp water on market optimism by saying that it is too early to confirm if OPEC and partners will cut production.

Sterling enjoyed a wild ride yesterday. The morning news on Article 50 being able to be revoked unilaterally (see below) saw a rally of +0.91% to $1.2840 before we slumped to $1.2659 on the government losing a contempt of Parliament vote over releasing full legal advice. Although a blow to the government, the more important defeat was the one that allowed amendments to be added to any “plan B” assuming the initial vote is defeated next week. Previously Parliament had a “yes/no” vote on “plan B” but now they can shape it. So a very soft Brexit is more likely. The pound recovered a touch to end the session -0.07% weaker at 1.2716.

If you weren’t already confused enough about the various permutations that Brexit could take then yesterday’s development about an advisor to the ECJ confirming that judges should allow for the unilateral revocation of the Article 50 exit clause probably did little to help. There was plenty of debate about what this really means and whilst there are still differing opinions out there, the general gist of it is that this could either allow the UK to successfully revoke Article 50 if it so desires, or even revoke it before triggering it again which in essence just restarts the two year clock on negotiations with the EU. The question now is whether or not the ruling will be backed up by ECJ judges which isn’t necessarily always the case but usually is. Assuming so, then it must imply a much much lower chance of a no-deal Brexit. Indeed DB’s Oli Harvey noted that it will mean that parliamentary amendments to the meaningful vote motion which rule out 'no deal' now can be practically applied.

Previously, the problem was that 'no deal' would likely happen by default in the absence of Parliament failing to find an agreement on all other alternatives. Now that is no longer the case. So, if the judges rule with the advocate general, it is highly significant and a big surprise that has the ability to dramatically change the Brexit landscape.

Elsewhere, Italian BTPs were the exception to the global bond rally yesterday, with 10-year yields up +1.0bps as local media outlets continue to suggest that a solution to the budget standoff remains out of reach. The European Commission is reportedly asking for 12 billion euros of additional cuts to get the deficit below 2% of GDP.

In France, President Macron decided to cancel a planned increase in fuel taxes to address the apparent concerns of the “yellow vest” activists who have protested the measure. Our economists think this will push the 2019 budget deficit toward, and possibly above, 3% of GDP, compared to its target of 2.8%. Still, the medium-term reform agenda should remain unchanged, as Macron is likely to continue to attempt pension reforms next year. Yields on French OATs fell -2.7bps amid the broader fixed income rally.

In terms of the day ahead, in light of the passing of former President George H.W. Bush, both bond and equity markets are to remain closed in the US while the majority of the data releases that were scheduled have been pushed back to later in the week. Still scheduled is the latest MBA mortgage applications reading while the Fed’s Beige Book is also still scheduled for release (Fed has confirmed the release) and the Fed’s Quarles speak late in the evening. Fed Chair Powell’s speech has been rescheduled for Thursday. Meanwhile in Europe we will get the remaining November PMIs (services and composite) and October retail sales data for the Euro Area. ECB President Draghi is also scheduled to speak this morning at a banking event before fellow ECB official Lautenschlaeger chairs a panel in Frankfurt. The Bank of Canada rate decision is also today.

https://www.zerohedge.com/news/2018...s-pare-losses-after-china-tariff-man-see-deal
 

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Australian Sheep Exporters to Stop Shipments to Middle East During Summer Months
December 4, 2018 by Reuters


FILE PHOTO: The Awassi Express is seen docked at the port of Fremantle, Perth, Australia, April 9, 2018. AAP/Tony McDonough/via REUTERS/File Photo



SYDNEY, Dec 4 (Reuters) – Australia’s livestock exporters will stop shipping live sheep to the Middle East for three months each year from 2019, an industry body said on Tuesday, amid rising public anger over the trade worth around A$55 million ($40 million) annually.

The Australian Livestock Exporters Council (ALEC) said its members had voluntary agreed to halt shipments of live sheep to the Middle East during the northern hemisphere summer.

The move comes amid widespread public anger after footage emerged showing the death of 2,400 sheep on a ship bound for the Middle East, prompting calls for the entire trade to be prohibited.

“This is about maintaining and growing a strong, viable nine-month-a-year live sheep trade and, more broadly, securing the future of Australia’s livestock export industry,” Simon Crean, ALEC’s chairman, said in an emailed statement.

The move by ALEC could ease some of the strain on the ruling conservative government.

Several members of Prime Minister Scott Morrison’s Cabinet have backed calls to ban the entire live sheep exporting industry, a move that threatened to fracture the government.

Australia’s chief commodity forecaster in September said it expected 1.9 million live sheep to be sold this year, worth A$250 million.

Around of a fifth of all live sheep are forecast to be sold to Middle Eastern countries. ($1 = 1.3569 Australian dollars)

(Reporting by Colin Packham Editing by Joseph Radford)

(c) Copyright Thomson Reuters 2018.

https://gcaptain.com/australian-she...hipments-to-middle-east-during-summer-months/
 

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Naked Capitalism Links 12/05
https://www.nakedcapitalism.com/2018/12/links-12-5-18.html

SA - Market News Live Feed 12/05
https://seekingalpha.com/market-news

TBP - 10 Wednesday AM Reads 12/05
https://ritholtz.com/2018/12/10-wednesday-am-reads-123/

CWS - Morning News: December 5, 2018
http://www.crossingwallstreet.com/archives/2018/12/morning-news-december-5-2018.html

MtM - US Market Closure may be a Firebreak 12/05
http://www.marctomarket.com/#!/2018/12/us-market-closure-may-be-fire-break.html

FC - GBP/USD: 3 scenarios for the Brexit vote in Parliament 12/05
https://www.forexcrunch.com/gbp-usd...utm_campaign=Feed:+ForexCrunch+(Forex+Crunch)

TCS - Treasury Market Flashing A Warning For US Economy 12/05
http://www.capitalspectator.com/treasury-market-flashing-a-warning-for-us-economy/

SA - Wall Street Breakfast: Santa Rally Stuck In The Chimney? 12/05
https://seekingalpha.com/article/4226396-wall-street-breakfast-santa-rally-stuck-chimney
 

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Ira Epstein's End of the Day Financial Video 12 5 2018
Ira Epstein


Published on Dec 5, 2018
 

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Ira Epstein's End of the Day Agriculture Video 12 5 2018
Ira Epstein


Published on Dec 5, 2018
 

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Long-Term Dollar Top Pointing to Massive Bull Market in Gold and Silver. Part 2.
maneco64


Published on Dec 6, 2018
 

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China Outraged At Arrest Of Huawei CFO, Warns It Will "Take All Measures"


by Tyler Durden
Thu, 12/06/2018 - 05:04


So much for a trade war truce between China and the US, or a stock market Christmas rally for that matter.

Shortly after the news hit that Huawei CFO Wanzhou Meng — also deputy chairwoman and the daughter of Huawei’s founder — was arrested on December 1, or right around the time Trump and Xi were having dinner in Buenos Aires last Saturday, and faces extradition to the U.S. as a result of a DOJ investigation into whether the Chinese telecom giant sold gear to Iran despite sanctions on exports to the region, China immediately lodged a formal protest publishing a statement at its embassy in Canada, and demanding the U.S. and its neighbor "rectify wrongdoings" and free Meng, warning it would "closely follow the development of the issue" and will "take all measures" to protect the legitimate rights and interests of Chinese citizens.

Full statement below:

Remarks of the Spokesperson of the Chinese Embassy in Canada on the issue of a Chinese citizen arrested by the Canadian side

At the request of the US side, the Canadian side arrested a Chinese citizen not violating any American or Canadian law. The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim. The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou.​

We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.​
Meng's arrest will immediately heighten tensions between Washington and Beijing just days after the world’s two largest economies agreed on a truce in their growing trade conflict. It will, or at least should, also prompt any US execs currently in China to think long and hard if that's where they want to be, say, tomorrow when Xi decides to retaliate in kind.

Meng’s father Ren Zhengfei, a former army engineer who’s regularly named among China’s top business executives, has won acclaim at home for turning an electronics reseller into the world’s second-largest smartphone maker and a major producer of networking gear.

As Bloomberg notes, the CFO’s arrest will be regarded back home as an attack on China’s foremost corporate champions. While Alibaba and Tencent dominate headlines thanks to flashy growth and high-profile billionaire founders, Ren’s company is by far China’s most global technology company, with operations spanning Africa, Europe and Asia.

“Tencent and Alibaba may be domestic champions and huge platforms in of their own rights, but Huawei has become a global powerhouse,” said Neil Campling, an analyst at Mirabaud Securities Ltd. It is “5G standards that are at the heart of the wider IP debate and why the U.S. and her allies are now doing everything they can to cut to the heart of the Chinese technology IP revolution.”​
At the same time, Huawei's technological ambitions have also gotten the company in hot water with the US: its massive push into future mobile communications has raised hackles in the U.S. and become a focal point for American attempts to contain China’s ascendance.

Going back to the arrest, the U.S. Justice Department declined to comment about the circumstances involving the CFO, although the biggest question on everyone's mind right now is whether Trump was aware of the pending arrest at the time of his dinner with the Chinese president, and why exactly he had greenlighted the move which would certainly result in another diplomatic scandal, promptly crushing and goodwill that was generated at the G-20 dinner.

Meanwhile, in a statement, Huawei said the arrest was made on behalf of the U.S. so Meng could be extradited to “face unspecified charges” in the Eastern District of New York.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng,” Huawei said.

“The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, U.S. and EU.”



Tensions between the Chinese telecom giant and U.S. authorities escalated in 2016, when the US voiced concerns for the first time that Huawei and others could install back doors in their equipment that would let them monitor users in the U.S. Huawei has denied those allegations. The Pentagon stopped offering Huawei’s devices on U.S. military bases citing security concerns. Best Buy Co., one of the largest electronics retailers in the U.S., also recently stopped selling Huawei products.

In August, U.S. President Donald Trump signed a bill banning the government’s use of Huawei technology based on the security concerns. The same month, Australia banned the use of Huawei’s equipment for new faster 5G wireless networks in the country and New Zealand last week did the same, citing national security concerns. Similar moves are under consideration in the U.K. The U.S., which believes Huawei’s equipment can be used for spying, is contacting key allies including Germany, Italy and Japan, to get them to persuade companies in their countries to avoid using equipment from Huawei, the Wall Street Journal reported last week.

In 2016, the Commerce Department sought information regarding whether Huawei was possibly sending U.S. technology to Syria and North Korea as well as Iran.​

The U.S. previously banned ZTE Corp., a Huawei competitor, for violating a sanctions settlement over transactions with Iran and North Korea.
The cynics out there may claim that the US response is merely in place to delay the development of the company which in the third quarter overtook Apple as the No. 2 global smartphone maker, shipping more than 52.2 million units according to Gartner Inc.

“This is what you call playing hard ball,” said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. “China is already asking for her release, as can be expected, but if the charges are serious, don’t expect the US to blink.”

The biggest question is what will China do next. One look at futures, which flash crashed earlier when the news of the CFO's arrest first hit, suggests that whatever it is, Beijing will probably not be happy.

https://www.zerohedge.com/news/2018...st-huawei-cfo-warns-it-will-take-all-measures
 

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Share Talk Bulletin Board Heroes, Thursday 6th December 2018
Share Talk


Published on Dec 6, 2018
A charting look at some of the most followed stocks on the London market, Zak Mir covers.

Brave Bison Grp (BBSN)
Jkx Oil & Gas (JKX)
Lonmin (LMI)
Mporium Grp (MPM)
Mayan (MYN)
Orosur Mining (OMI)
Predator Oil (PRD)
Regal Petroleum (RPT)
Thomas Cook (TCG)

@ZaksTradersCafe deductive reasoning as to what should happen next in terms of the newsflow regarding the companies listed in this video.

Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
 

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"Fake Markets" To Lead to Global Financial Crisis? Goldnomics Podcast (Ep 9)
GoldCore


Published on Dec 6, 2018
Fake Markets – Are we living in a new era?

What are Fake Financial Markets and what effect do they have on the current inflated levels of global stock markets? What do they mean for stock market and bond market performance in the future?

In this episode 9 of the Goldnomics Podcast, Stephen Flood GoldCore CEO talks to Francesco Filia CEO of Fasanara Capital and regular contributor to CNBC about his take on this idea of Fake Markets and their effect on global financial markets and your portfolio.

Listen to the full episode or skip directly to one of the following discussion points:


00:30 – Francesco Filia and Stephen Flood: can the performance of stock markets be trusted as a barometer for economic performance?
01:06 – Stay updated in all developments in precious metals by signing up for GoldCore’s market update on www.goldcore.com
01:27 – Meet Francesco Filia, CEO & CIO at Fasanara Capital.
02:28 – Francesco: Understanding fake markets and why you should be concerned.
03:10 – Fake markets today due to complete manipulation of markets by monetary authorities.
05:14 – Francesco: Understanding the difference between passive and active investments.
07:59 – Are ETFs a cause for concern?
10:10 – Swiss National Bank & Swiss equity market: A bubble waiting to burst?
11:40 – How strong is the argument for passive investments?
12:19 – Greek Tier One Capital and the assumption of zero default risk: How sustainable is this?
14:08 – The definition of “Fake Markets.”
15:42 – Fake markets, systemic risk and investors: Identifying and avoiding the pitfalls.
17:40 – Are systemic risk indicators better than volatility based indicators?
19:50 – The Rate of Recovery: A good indicator of the temperament of the market?
22:10 – Is complexity theory a better way to understand markets?
24:09 – What can investors do to insulate themselves in Fake Markets?
25:48 – What can gold do to your portfolio in the event of a market correction?
28:03 – How can markets be fixed?
31:44 – Can central banks or official sector intervention fix the market?
32:54 – What can central banks do to protect the market and ensure systemic stability?
34:08 – Has the market bubble created more income inequality?
36:12 – Low rates: can bonds still save the day?
37:28 – Coming market transition: Any need for panic?
38:02 – Is this the right time to rebalance portfolios and hold more cash and gold?

Make sure you don't miss a single episode......

Subscribe to the Goldnomics Podcasts on iTunes, Soundcloud, or YouTube:
https://soundcloud.com/goldcore-38145...

YouTube.com/user/GoldCoreLimited

Follow us on social media:

GoldCore on Twitter: https://twitter.com/goldcore

GoldCore on Facebook: https://www.facebook.com/GoldCore/

GoldCore on Linkedin: https://ie.linkedin.com/company/goldcore

Visit our website at: https://www.goldcore.com
 

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Global Markets, Futures Plunge As Traders Brace For China's Response


by Tyler Durden
Thu, 12/06/2018 - 07:23


It is a sea of red out there as traders brace for China's response.



Shortly after S&P futures flash crashed at the start of the overnight session, with the CME triggering multiple Velocity Logic events causing 10-sec pauses to slow down trading...



... after US markets were shut to commemorate the death of George H.W. Bush on Wednesday, global stock markets tumbled for a third day on Thursday as the arrest of the CFO of Chinese telecom giant Huawei in Canada for extradition to the United States prompted fears of fresh tensions between the two economic superpowers, and sparked dread as to how China would respond.

S&P futures by as much as 1.9% during the Asian session in a sudden and unexpected move that sent world equity markets reeling, and was trading near session lows, just above 2,650 this morning.



That was just the start of it, and in the latest US-China trade war linked shockwave to slam global markets, these were some of the stand out moves:

  • Dow Jones futures were off more than 450 points; Nasdaq futs fell 2.4 percent as Apple suppliers plunged amid renewed production cuts
  • Europe's Stoxx 600 tumbled 2.2% to the lowest in almost two years
  • Germany's DAX tumbled below 11,000 for the first time in two years
  • WTI crashed below $51 after Saudi Energy Minister Khalid Al-Falih said OPEC hasn’t yet reached a deal on production cuts
  • Deutsche Bank plunged to a new record low, dropping as low as €7.71
  • The yuan dropped the most since October.
  • Treasuries jumped again, sending the 10Y yield to 2.89%
  • The Bloomberg dollar index spiked amid safe-haven flows, rising just shy of 2018 highs.
  • The MSCI Asia Pacific Index posted its worst day in six weeks
  • China’s 2nd largest telecom equipment maker ZTE Corp crashed 9% in Hong Kong

News of the arrest of Huawei’s CFO Meng Wanzhou, the daughter of the firm’s founder, who was detained by Canadian police on the same day Trump and Xi held their dinner in Buenos Aires, triggered renewed fireworks coming just as Washington and Beijing prepare for crucial trade negotiations and threatened to reignite U.S.-China tensions. The yuan dropped the most since October.

Asian markets took a beating. Huawei is not listed but China’s second-largest telecom equipment maker ZTE Corp sank 9% in Hong Kong while most of the nearby national bourses lost at least 2 percent. Japan’s Nikkei shed 1.9%, closing at its lowest level since Oct. 30, with semi-conductor related shares leading the losses. MSCI’s ex-Japan Asia-Pacific index lost 2.0%; Hong Kong’s Hang Seng dropped 2.5% while Chinese bluechips lost 2.1% to take their 2018 slump to 20%.

Europe slumped too in early trading as 3 percent falls for the tech sector, miners and also carmakers kicked London, Frankfurt and Paris to two-year lows.

Needless to say, early market commentary was dire:

  • "We had this very ugly new turn and just the degree to which the market has reacted just suggests to me that they are vulnerable right now,” said Saxo Bank’s head of FX strategy John Hardy. “It think we should all be very careful, it is not looking good, especially if the S&P 500 goes to new lows.”
  • “There are so many forces weighing against markets right now, whether it’s the China slowdown, weak European data, Fed hikes, uncertainty around trade and now Brexit as well,” Bilal Hafeez, head of fixed-income research for EMEA at Nomura, told Bloomberg TV. “We really need to see some stabilization in any of those factors to see markets stabilize now.”
  • “This move against the Huawei CFO has just added another spanner in the works,” Eleanor Creagh, strategist at Saxo Capital Markets, told Bloomberg TV in Sydney. “It’s really illustrative of the fact that the trade truce we saw over the weekend between Trump and Xi doesn’t really do much to mend the underlying relationship between the U.S. and China that is still deteriorating.”

And while Hardy said that President Trump may try to send some reassuring tweets later, for now traders are not taking any chances with S&P 500 futures near session lows, down almost 2 percent, and over 5% in the past two trading days after Tuesday's 3.2% plunge. The losses would have been even steeper had CME Group’s Chicago Mercantile Exchange not implemented a series of 10-second trading halts in Asia that had limited the initial drop.

Not helping sentiment, overnight BOJ Governor Haruhiko Kuroda said economic risks from abroad could be severe, and the Federal Reserve’s Beige Book report showed fading optimism over growth prospects at U.S. firms citing growing instances of economic "slowdown".



The plunge persisted even though a Chinese government spokesman said that China and the U.S. have reached agreement in the sectors of agriculture, autos, and energy, and China will immediately start implementing that consensus. Still, there’s no official, confirmed statement of what China agreed as part of the deal.

"China will start from agricultural products, autos and energy to immediately implement specific items that China and the U.S. have agreed upon," Ministry of Commerce Spokesman Gao Feng told reporters in Beijing. "In the next 90 days we will work in accordance with the clear timetable and road map to negotiate in areas where both sides have an interest and there are mutual benefits, such as intellectual property rights protection, technology cooperation, market access, and the trade balance."

That reassurance however faded in light of the shocking arrest, and the yuan eased 0.3% to 6.8835 per dollar in offshore trade. China’s foreign ministry said neither Canada and the United States had clarified their reason for the move but a source had earlier told Reuters it was related to violations of U.S. sanctions on Iran.

The arrest again heightened the sense of a major collision between the world’s two largest economic powers not just over tariffs but also over technological hegemony. Britain’s BT Group said it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations. Australia and New Zealand have also rejected Huawei’s products.

“The U.S. has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "So while there was a brief moment of optimism after the weekend U.S.-China talks but the reality is, it won’t be that easy."

Meanwhile, half way around the word, traders were also on pins and needles waiting to hear from the OPEC+ meeting in Vienna about what kind of cuts OPEC and other oil producers like Russia could make to their output. And in the latest price shock, WTI plunged almost 5% just above $50 a barrel as Saudi Arabia’s energy minister said going into the day long meeting that 1 million “would be enough”; with consensus among analysts for somewhere between 1-1.3 million barrels per day, this led to a quick waterfall in oil prices.



At the same time, and adding to worries about U.S. recession risks, the Treasury yield curve remained inverted between two- and five-year zones; the 10Y yield dropped as low as 2.87% overnight - a 3 month low - amid a flood to safety. Yields on German 10Y bunds held near six-month lows in risk off environment.

The Bloomberg Dollar Spot Index headed for a third day of gains as part of the global flight to safety. The yen led gains in G-10 as havens were supported. Elsewhere in FX, the euro barely budged at $1.1338 and the Canadian dollar languished near the 18-month low it had hit the previous day after cautious noises from the Bank of Canada. The pound drifted as U.K. Prime Minister Theresa May searched for a compromise to avoid a crushing defeat on her Brexit deal in a key vote in Parliament next week.

In the latest Brexit news, UK PM May was being pushed by cabinet members to postpone next week's Parliament vote on Brexit amid worries she is facing a loss so disastrous it could collapse the government. Instead, cabinet members believe that the PM should devote more time to selling the deal. Furthermore, reports have suggested that PM May has sent her Chief Whip to try find a way forward with the ERG by offering a potential Parliamentary ‘lock’ which would require lawmakers to give their consent before some of the more controversial parts of the UK’s exit from the EU came into effect.

U.S. jobs data is due on Friday. If the figures show any sign of serious weakness, markets are likely to react HSBC’s head of macro economic strategy, Shuji Shirota, said.

Expected data include trade balance and factory orders. Kroger, Broadcom, and Lululemon are among companies reporting earnings

Market Snapshot
  • S&P 500 futures down 1.7% to 2656.25
  • STOXX Europe 600 down 1.8% to 347.85
  • MXAP down 1.8% to 150.77
  • MXAPJ down 2% to 485.10
  • Nikkei down 1.9% to 21,501.62
  • Topix down 1.8% to 1,610.60
  • Hang Seng Index down 2.5% to 26,156.38
  • Shanghai Composite down 1.7% to 2,605.18
  • Sensex down 1.4% to 35,366.35
  • Australia S&P/ASX 200 down 0.2% to 5,657.65
  • Kospi down 1.6% to 2,068.69
  • German 10Y yield fell 1.9 bps to 0.258%
  • Euro unchanged at $1.1344
  • Italian 10Y yield fell 9.4 bps to 2.696%
  • Spanish 10Y yield fell 0.8 bps to 1.451%
  • Brent futures down 4% to $59.07/bbl
  • Gold spot little changed at $1,236.64
  • U.S. Dollar Index little changed at 97.12
Top Overnight Headlines
  • Huawei Technologies CFO was arrested in Canada over potential violations of U.S. sanctions on Iran, provoking outrage from China and complicating thorny trade negotiations just as they enter a critical juncture
  • Saudi Arabia proposed a moderate oil- production cut from OPEC and its allies that would gently rebalance the market, seeking to walk a fine line between preventing a surplus and appeasing U.S. President Donald Trump
  • German factory orders unexpectedly rose for a third month, underpinning growth momentum after Europe’s largest economy contracted in the third quarter
  • The EU’s highest court will say next week whether the U.K. should be allowed to reverse Brexit, in a landmark ruling that could offer hope to those who want the country to stay in the bloc
  • President Donald Trump has used tariffs as one of his most powerful tools for fighting his trade wars, but he’s also wielding leverage with another weapon: uncertainty
  • Federal Reserve Chairman Jerome Powell wants to avoid being tagged as the fool in the shower. And that’s why he’s likely to be especially cautious about marching interest rates higher in 2019
Asian stocks were lower across the board for a 3rd consecutive day with sentiment dampened after the US market closure and reports that Canada arrested Huawei’s CFO at the request of US authorities for alleged violations of sanctions against Iran. This prompted demands by China’s Embassy for an immediate release of the executive and led to concerns of the potential ramifications to trade discussions which weighed heavily on US equity futures. As such, Emini S&P declined by over 60 points and DJIA futures were down by more than 500 points shortly after the reopen which forced the CME to intervene to prevent a harder drop, while ASX 200 (-0.2%) and Nikkei 225 (-1.9%) were also weaker with the latter pressured by detrimental currency flows. Hang Seng (-2.5%) and Shanghai Comp. (-1.6%) conformed to the negativity with the Hong Kong benchmark underperforming amid losses across all its components and as local money markets rates edged higher again, while the PBoC announcement of a 1-yr Medium-term Lending Facility failed to support China with the operation at a reduced amount of CNY 187.5bln vs. Prev. CNY 403.5bln. Finally, 10yr JGBs were higher amid a continuation of the declines across yields and with safe-haven demand also underpinned by the weakness across equities.

Top Asian News
  • SoftBank Is Said to Place All Shares for $23 Billion IPO
  • Takeda Downgrade Looms After Shareholders Approve Shire Deal
  • China’s Drugmakers Plunge Most Since 2009 on Price Concerns
  • Anta-Led Consortium Is Said to Near Deal to Acquire Amer Sports
European equities (Eurostoxx -2.0%) have taken the lead from US futures and Asia-Pac trade overnight with US-Chinese trade concerns reignited by news that Canada arrested Huawei’s CFO at the request of US authorities for alleged violations of sanctions against Iran. This prompted demands by China’s Embassy for an immediate release of the executive, which subsequently weighed heavily on US equity futures. Despite commentary from China ahead of the open stating that their ultimate goal in US-China negotiations is to remove all tariffs, overnight developments have weighed heavily on sentiment in Europe thus far. The follow-through of events overnight has placed weight on IT names with STMicroelectronics (a supplier to Huawei) lower by -4.8% with losses also observed in Dialog Semiconductor (-2.6%) and Infineon (-3.3%) among others . Elsewhere, energy names underperform amid initial comments from the OPEC ministers in Vienna, signalling a potential cut in the low end of the expected range. In turn, European Oil and Gas Index fell 3.4% in-fitting with price action in the oil complex (BP -4.3%, Total -2.5%).

Top European News
  • Italy’s Salvini Says He Opposes New Taxes for Auto Sector: Ansa
  • Populists Split as Conte Seeks Deficit Trim for Juncker Meeting
  • German Orders Rise for Third Month, Underpinning Recovery Hopes
  • VW Brand Speeds Up Profit Target Ahead of Electric-Car Push

In FX, JPY/USD/CHF - All beneficiaries of safe-haven positioning/demand, as the global stock rout continues and intensifies, but to varying degrees with Usd/Jpy retreating below 113.00 while Usd/Chf holds near parity and the DXY remains around 97.000 amidst heavy losses in certain G10 counterparts. However, some hefty and layered option expiries in Usd/Jpy could keep that pair in check, with 1.6 bn rolling off between 112.75-80 and a similar amount sitting at 112.95-113.00, ahead of more 1+ bn maturities above the figure up to 113.75.
  • AUD/CAD/NZD - The non-US Dollars have extended declines vs the Greenback and underperformance against other majors, as bearish independent impulses exacerbate the negative impact of broader risk aversion. Aud/Usd is now testing 0.7200 bids and psychological support following dovish commentary from RBA’s Debelle in wake of this week’s disappointing GDP data, with rate cuts back on the agenda if the economy slows further and the baseline scenario of the next policy move being a hike does not pan out. By the same token, and with the added pressure of collapsing crude prices amidst talk of no more than 1 mn output cuts from OPEC+, the Loonie has continued its post-BoC plunge to circa 1.3440, while the Kiwi has slipped below 0.6900 towards 0.6850, but is deriving underlying support from the greater demise in the Aud again, as the cross retreats through 1.0500 and to a fresh ytd low around 1.0480.
  • GBP/EUR - The Pound and single currency are both holding up reasonably well given the increasingly risk-off environment, not to mention ongoing Brexit and Italian budget tension, as Cable maintains 1.2700+ status and Eur/Usd stays above 1.1300. Note, mega option expiries in close proximity from 1.1295-1.1300, 113.50-60 to 1.1380 (1.65 bn, 1.7 bn and circa 1.4 bn respectively).

In commodities, Brent (-4.3%) and WTI (-4.2%) have continued to drift lower as the 175th OPEC meeting begins, with initial remarks from OPEC delegates suggesting that OPEC+ could only cut 1mln BPD if Russia agrees to cut 150k BPD, adding they would be willing to cut over 1.3mln BPD if Russia cuts 250k BPD. Sources thereafter went on to state that any cut is unlikely to be over 1.4mln BPD. Russia’s role in the agreement continues to remain a source of speculation with prices hampered by comments from the Russian Energy Minister Novak suggesting that it is difficult for Russia to cut output quickly in Winter. WTI and Brent crude futures were then dragged lower once again after the Saudi Energy Minister Al-Falih says there is no agreement yet to cut but all options are on the table, including a no deal. Al-Falih then added that a 1mln BPD cut will be enough for OPEC+, a comment which appeared to add to the downside in energy markets with the level touted not well received by the market, particularly after he then went on to state that the KSA are content with the current oil price. Furthermore, questions also remain over who might not participate in any output cut with NOC's Sanallah contradicting comments from the Oman oil minister overnight after stating that Libya is hoping for an exemption from the OPEC cuts. Additionally, Iran continues to hold a tough stance in negotiations by stating that they will not be a part of any deal to reduce output until sanctions are removed. Note, this week’s DoE report will be released today due to yesterday’s market closure. Gold is trading flat within a tight USD 5/oz range, with spot palladium trading at a premium to gold for the first time in 16 years; as prices hit record levels of USD 1246.50 in the previous session. Separately, China has reportedly asked steel mills in the province of Tangshan to being implementing winter curbs due to a reduction in air quality.

US Event Calendar
  • 7:30am: Challenger Job Cuts YoY, prior 153.6%
  • 8:15am: ADP Employment Change, est. 195,000, prior 227,000
  • 8:30am: Trade Balance, est. $55.0b deficit, prior $54.0b deficit
  • 8:30am: Nonfarm Productivity, est. 2.3%, prior 2.2%; Unit Labor Costs, est. 1.0%, prior 1.2%
  • 8:30am: Initial Jobless Claims, est. 225,000, prior 234,000; Continuing Claims, est. 1.69m, prior 1.71m
  • 9:45am: Bloomberg Consumer Comfort, prior 60.6
  • 9:45am: Markit US Services PMI, est. 54.4, prior 54.4; Markit US Composite PMI, prior 54.4
  • 10am: ISM Non-Manufacturing Index, est. 59, prior 60.3
  • 10am: Factory Orders, est. -2.0%, prior 0.7%; Factory Orders Ex Trans, prior 0.4%
  • 10am: Durable Goods Orders, est. -2.38%, prior -4.4%; Durables Ex Transportation, est. 0.1%, prior 0.1%
  • 10am: Cap Goods Orders Nondef Ex Air, prior 0.0%; Cap Goods Ship Nondef Ex Air, prior 0.3%
  • 12pm: Household Change in Net Worth, prior $2.19t
  • 12:15pm: Fed’s Bostic Speaks on the U.S. Economic Outlook
  • 6:30pm: Fed’s Williams Holds Discussion With Mervyn King in NY
  • 6:45pm: Powell Gives Brief Welcome Remarks at Housing Conference
https://www.zerohedge.com/news/2018...-futures-plunge-traders-brace-chinas-response
 

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Naked Capitalism Links 12/06
https://www.nakedcapitalism.com/2018/12/links-12-6-18.html

SA - Market News Live Feed 12/06
https://seekingalpha.com/market-news

TBP - 10 Thursday AM Reads 12/06
https://ritholtz.com/2018/12/10-thursday-am-reads-219/

FC - WTI challenges $50.00 ahead of API, looks to OPEC 12/06
https://www.forexcrunch.com/wti-cha...utm_campaign=Feed:+ForexCrunch+(Forex+Crunch)

SA - Wall Street Breakfast: Huawei Arrest And OPEC Troubles 12/06
https://seekingalpha.com/article/4226649-wall-street-breakfast-huawei-arrest-opec-troubles

MtM - New Spanner in US-China Relations Weighs on Risk Appetites 12/06
http://www.marctomarket.com/#!/2018/12/new-spanner-in-us-china-relations.html

TCS - US Q4 GDP Growth Remains On Track For Moderate Slowdown 12/06
http://www.capitalspectator.com/us-q4-gdp-growth-remains-on-track-for-moderate-slowdown/