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R.T.M. ~ Frontrunning ~ 23nd Ed., Vol.2 ~ June 6th - 10th

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Frontrunning: June 6


by Tyler Durden - Jun 6, 2016 7:32 AM

  • Yellen faces fine balance on Fed rate hike after job growth tumbles (Reuters)
  • Oil Advances as Abu Dhabi Sees $60 Crude on Shrinking Surplus (BBG)
  • China to submit 'negative list' for U.S. investment treaty talks next week (Reuters)
  • Buoyed by attacks on Trump, Clinton heads into pivotal week (Reuters)
  • Clinton's IT aide keeps email server shrouded in mystery (The Hill)
  • Senior Republicans criticize Trump's remarks on Hispanic judge (Reuters)
  • Pound Falls, Volatility Jumps as Polls Show Momentum for Brexit (BBG)
  • U.S.-backed force in Syria closes in on Islamic State-held city (Reuters)
  • The Land Below Zero: Where Negative Interest Rates Are Normal (BBG)
  • ‘Niger Delta Avengers’ Sabotage Oil Output (WSJ)
  • Global Yields Fall to Record as U.S. Jobs, Brexit to Hamper Fed (BBG)
  • NY Fed first rejected cyber-heist transfers, then moved $81 million (Reuters)
  • Winning With Unloved Europe Stocks When All Others Fall Flat (BBG)
  • Ukraine says detained man planned attacks on Euro soccer championship in France (Reuters)
  • China to submit 'negative list' for U.S. investment treaty talks next week (Reuters)
  • Rosengren flags jobs report, yet says Fed rate hikes coming (Reuters)
  • U.S. Navy slaps drinking ban on 18,600 sailors in Japan (Reuters)

Overnight Media Digest

WSJ

- U.S. officials appear poised to make history by approving the first private space mission to go beyond Earth's orbit, according to people familiar with the details. (http://on.wsj.com/1U3aB9d)

- The U.S. Federal Reserve's plans for raising short-term interest rates went on hold after Friday's dismal jobs report, with officials now wanting to wait and see whether the economy remains on track before they make a move. (http://on.wsj.com/1U39Rkh)

- Hillary Clinton won the Puerto Rico Democratic primary on Sunday, moving her a step closer to prevailing over her rival, Bernie Sanders, in the fight for her party's presidential nomination. (http://on.wsj.com/1U39Wo5)

- SoftBank Group Corp is set to sell most of its stake in GungHo Online Entertainment in a deal valued about 73 billion yen, or roughly $685 million. (http://on.wsj.com/1U3bq1H)

FT

Private equity firm AnaCap Financial Partners raised 595 million euros ($675.09 million) for its AnaCap Credit Opportunities III fund to buy credit assets from European banks.

Mike Ashley, the founder of Sports Direct International Plc , will answer questions in Britain's parliament about practices at the sports goods retailer on Tuesday, his spokesman said, signalling an end to a standoff between the billionaire and lawmakers.

High-street banks are training their staff on how to reassuringly answer queries from confused customers ahead of Britain's June 23 European Union referendum.

NYT

- Prevention, a health and wellness magazine that is published by the family-owned Rodale company, will become ad-free starting with its July issue, which will hit shelves next week. (http://nyti.ms/1VGS5Wy)

- The Treasury's schedule of financing this week includes Monday's regular weekly auction of new three- and six-month bills and an auction of four-week bills on Tuesday. At the close of the New York cash market on Friday, the rate on the outstanding three-month bill was 0.30 percent. The rate on the six-month issue was 0.43 percent, and the rate on the four-week issue was 0.19 percent. (http://nyti.ms/1Usvc3K)

- The Obama administration plans to use annual talks with leaders in Beijing to push for cuts in excess Chinese industrial output, which has inundated foreign markets with discounted steel, aluminum and other products, Treasury Secretary Jacob J. Lew said in Beijing on Sunday ahead of the meeting. (http://nyti.ms/1UCq1ky)

- As news outlets round the world continued to publish revelations from the Panama Papers, the non-profit organization that coordinated the project was preparing to move out of its offices here in an effort to cut costs. The organization, called the International Consortium of Investigative Journalists, was already forced to part with three contract journalists who had helped its small staff shepherd the project. (http://nyti.ms/1t0ibZ5)

Britain

The Times

Martin Sorrell is facing a shareholder rebellion over his 70 million pounds ($100.72 million) pay package as chief executive of WPP Plc. Two proxy advisory firms, Pirc and ShareSoc, are advising investors to oppose the advertising group's remuneration report on Wednesday, while another, ISS, is recommending only "qualified support" for the report. (http://bit.ly/1PdCkjc)

John Kingman, the most senior civil servant in the Treasury, is being lined up to take on the chairmanship of Legal & General Group Plc in one of the most eye-catching moves from Whitehall to the City in years. (http://bit.ly/1PdCnLR)

The Guardian

The Bank of England is stepping up its preparations for a possible decision by Britain to leave the European Union on June 23. The first of three special funding operations by Threadneedle Street will be launched on June 14 to ensure UK's commercial banks have the necessary cash to cope with any turmoil caused by the uncertainty surrounding a Brexit vote. (http://bit.ly/1PdCRBB)

Retail Acquisitions, the former owner of BHS, pledged to keep all funds in the business and plough any proceeds from the sale of the group's properties into its day-to-day running until a deal had been struck on the future of the BHS pension scheme, the Guardian understands. (http://bit.ly/1PdD87D)

The Telegraph

The Bank of Scotland has warned that nearly a third of companies are planning further job cuts to survive the slow recovery from sub-$30 a barrel oil prices seen earlier this year. The bank's annual oil sector survey shows that 43 percent of companies are planning cost cutting. (http://bit.ly/1PdD9Zl)

Deliveroo, the London-based food delivery network, is due to hit revenue of 130 million pounds this year, solidifying its position as one of UK's most-promising technology companies. (http://bit.ly/1PdCPtl)

Sky News

HouseSimple, an online estate agent backed by Charles Dunstone, has raised 13 million pounds to fund its growth plans, Sky News understands. (http://bit.ly/1PdCCX6)

The Independent

Sports Direct International Plc boss Mike Ashley has said he will now appear before MPs to defend his firm's "good name". Ashley has backed down after months of refusing to give evidence to the Business, Innovation and Skills (BIS) select committee about working conditions at his sporting goods chain. (http://ind.pn/1PdCCq9)

http://www.zerohedge.com/news/2016-06-06/frontrunning-june-6
 

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Futures Flat Following Friday's Jobs Fiasco: All Eyes On Yellen Again


by Tyler Durden - Jun 6, 2016 6:36 AM

Every ugly jobs report has a silver lining, and sure enough following Friday's disastrous jobs report, global mining and energy companies rallied alongside commodities after the jobs data crushed speculation the Fed would raise interest rates this month. “The disappointing U.S. jobs report on Friday means that a summer Fed rate hike is off the table,” said Jens Pedersen, a commodities analyst at Danske Bank. “That has reversed the upwards trend in the dollar, supporting commodities on a broader basis. The market will look for confirmation in Yellen’s speech later today.” While commodities benefited from USD weakness, the pound slumped following polls that showed Britons favor exiting the European Union. European stocks and U.S. stock index futures are little changed. Asian stocks rise.

Janet Yellen is speaking today at 12:30pm in Philadelphia, the last scheduled appearance by a central bank official before the next policy meeting concludes on June 15, and hopes are again high that she will provide some additional insight into what happens next. Considering just over one week ago she pushed the hawkish Fed case which has now disintegrated before everyone's eyes, we would be skeptical. During her May 27 appearance, the Chair strongly hinted at a June rate move, sending summer rate hike odds to their highest yet. It did not last.



Yellen will have to backtrack now after the dismal payrolls report last week led markets to doubt whether the Fed will raise rates this year, let alone this month. To be sure, she has her usual excuse: "the Fed is data dependent", and the data just fell out of the window.

According to Bloomberg, Yellen may need to update her tone slightly in response to renewed labor market uncertainty, perhaps softening or further qualifying her May 27 statement that an increase will probably be appropriate “in coming months.” Still, economists and strategists say it’s unlikely that she’ll give a more definitive timeline on when to expect the second hike in a decade. “We’re going to get a vague promise of future rate hikes that does not specify a date,” said Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who expects a September increase. “You can’t claim data dependence, have the most recent data be what it was, and still take upward rate action.”



Meanwhile, markets are being pulled in different directions, with worries over a slowing U.S. economy and British polls weighing on some assets, while a weaker dollar and chances the Fed will keep interest rates lower for longer supporting others. Materials producers were the biggest gainers in both Europe and Asia as the Bloomberg Commodity Index headed for the highest close since October, with Brent crude above $50 a barrel and zinc extending its longest rally since 2013. Indonesia’s rupiah and Malaysia’s ringgit were the best performers among 31 major currencies after Friday’s U.S. payrolls report caused the Bloomberg Dollar Spot Index to tumble. The pound sank to a three-week low and Brexit concern also infected Spanish and Italian bonds and U.K. homebuilders.

“Stocks are flattish today because people are interpreting there won’t be a rate hike after the jobs report Friday and for me that’s very complacent because we shouldn’t forget the longer-term trend,” said Michael Woischneck, who oversees about 300 million euros ($341 million) at Lampe Asset Management in Dusseldorf, Germany. “Oil and commodities are better again and that’s also helping stocks, but it will be a very volatile week with the Brexit vote coming closer and closer.”

The Stoxx Europe 600 Index added 0.2 percent. Rio Tinto Group and Glencore Plc led a gauge of mining companies to the best performance of the 19 industry groups on the gauge as commodities surged. BP Plc pushed oil stocks higher as crude rebounded. The U.K.’s FTSE 100 Index climbed the most among major western-European markets, gaining 1 percent, as miners jumped and the pound weakened after the Brexit polls. Futures on the S&P 500 were little changed. Shares fell Friday after the disappointing U.S. jobs data cast doubt on the strength of the world’s biggest economy and on whether the Fed will raise rates at its next meeting. The MSCI Emerging Markets Index rose as much as 1 percent to a one-month high, advancing for a third day and climbing above its 50-day moving average. Benchmark gauges in Russia and the Philippines jumped over 1 percent. South Korea’s market is shut for a holiday.

Aside from the abovementioned Yellen speech, there is no macro data in the traditional post-payrolls weekly lull.

Market Snapshot

  • S&P 500 futures up less than 0.1% to 2099
  • Stoxx 600 up less than 0.1% to 341
  • FTSE 100 up 0.8% to 6256
  • DAX up 0.2% to 10128
  • S&P GSCI Index up 0.9% to 377.4
  • MSCI Asia Pacific up 0.3% to 130
  • Nikkei 225 down 0.4% to 16580
  • Hang Seng up 0.4% to 21030
  • Shanghai Composite down 0.2% to 2934
  • S&P/ASX 200 up 0.8% to 5360
  • US 10-yr yield up 1bp to 1.71%
  • German 10Yr yield up 1bp to 0.08%
  • Italian 10Yr yield up 14bps to 1.47%
  • Spanish 10Yr yield up 5bps to 1.52%
  • Dollar Index up 0.09% to 94.11
  • WTI Crude futures up 1.1% to $49.16
  • Brent Futures up 1.1% to $50.21
  • Gold spot down 0.3% to $1,241
    Silver spot up less than 0.1% to $16.42
Top Global News

  • China Must Get ‘More Adept’ on Monetary-Policy Signals: Lew; China must improve monetary policy communication as it takes on an increasingly large role in the global economy, U.S. Treasury Secretary Jacob J. Lew said
  • Fed’s Rosengren Says Important to See If Weak Jobs Were Anomaly: Boston Fed head says May payrolls contrast with other data; FOMC voter still expects sufficient growth for gradual hikes
  • Fed’s Yellen speaks in Philadelphia at 12:30pm
  • Pound Tumbles, Volatility Jumps After Polls Show Brexit Momentum: ITV poll shows Brexit ahead 45% to 41%; TNS has 43% to 41%; one-month volatility at 7-year high before June 23 vote
  • U.S. Economy Projected to Expand This Year by Least Since 2012: uncertainty on the presidential election weighs on outlook, according to a survey of forecasters by the National Association for Business Economics
  • Clinton Wins Puerto Rico Democratic Primary, Nears Nomination: Democratic front-runner widens lead on rival Bernie Sanders
  • ASCO WEEKEND WRAP: AbbVie, Bristol, Lilly, Stemline May Move
  • Tesla Challenger in China Plans to Debut $106,000 E- Roadster: Qiantu Motor plans to start production in Suzhou by year-end; Tesla May Purchase Batteries From Samsung SDI, Nikkei Says
  • Paramount’s ‘Ninja Turtles’ Opens to Slow Sales Over Weekend: movie opened to disappointing weekend sales in N. American theaters
  • Apple May Get Breather on Sourcing Rules in India: Times
  • McKinsey Said to Have Built $5b Internal Investment Arm: FT
Looking at regional markets, Asia stocks traded mixed as the region digested Friday's dismal NFP data and its implications for Fed policy. Nikkei 225 (-0.4%) significantly underperformed as the aforementioned data saw JPY strengthen firmly against the USD with USD/JPY briefly below 107.00. Conversely, material names elevated the ASX 200 (+0.8%) into positive territory as the softer greenback underpinned commodity prices. Hang Seng (+0.4%) and Shanghai Comp (-0.2%) saw choppy trade with sentiment clouded following a lacklustre CNY 40bIn liquidity injection, although downside across the Asia region was stemmed as the poor jobs data also dampened prospects of a sooner Fed hike. 10yr JGBs traded in positive territory as the lack of risk-appetite in Japanese equities fuels safe haven inflows benefiting bond prices.

Asian Top News

  • China’s Opening Bond Market a Threat to Hong Kong Connect Plans: HKEx bond link one of many ways to access China, says Haitong
  • Negative-Rate Job Half Done as Japan Banks Cut Bonds, Keep Cash: Banks’ JGB holdings drop 5.5% in April, as reserves rise 3.4%
  • Line Plans Year’s Biggest Tech IPO With Pitch to U.S. Investors: Japan’s messaging app to split IPO between Tokyo and New York
  • Temasek Unit Said to Plan Debt Tied to Private Equity Stakes: Astrea III plans to issue about $500 million notes in 4 parts
  • Lotte $4.9 Billion IPO Faces Fresh Setback on Bribery Probe: Korean prosecutors raid Hotel Lotte last week as part of probe
  • Stay or Go? Rajan’s Future Becomes Focus of India Rates Meeting: All 19 economists see RBI leaving rates unchanged Tuesday
European equities have also benefitted in the wake of Friday's eventful NFP release, with indices spending most of the session higher, although coming off best levels as we move into mid-morning (Euro Stoxx: +0.1%), with material and energy names among the best performers. As such, FTSE is the best performing index, led higher by Anglo American, Rio Tinto and BHP Billiton. Fixed income markets have sustained the upside seen last week, with Bunds continuing to trade near all-time highs, albeit relatively contained on the day given the lack of European supply or data and with net supply relatively steady this week.

European Top News

  • German Factory Orders Declined in April on Weak Export Demand: orders fell 2% on month compared with estimated 0.5% drop
  • Rothschild & Co. Buying Martin Maurel to Expand in France: deal creates bank with EU34b under management; Rothschild & Co should keep CET1 capital ratio above 18%
  • Nestle Seeks China Turnaround Online as Competitors Abound: E-commerce business more profitable than other retail channels
  • Swisscom Gains as Swiss Vote Against Pay Cap for Top Management: country votes against new rules for government- owned companies
  • EON Can’t Please Everyone as Shareholders Meet for Spinoff Vote: utility needs 75% shareholder approval for Uniper listing
In commodities, the Bloomberg Commodity Index rose 1.1% putting it on course for the highest close since Oct. 22, as oil and metals advanced. Brent crude added 1.2 percent to $50.25 a barrel, after falling 0.7 percent last week as OPEC refrained from freezing output at a meeting in Vienna. The global oil surplus is shrinking faster than expected and has the potential to send prices as high as $60 a barrel this year, according to Ali Majed Al Mansoori, chairman of the Abu Dhabi Department of Economic Development. Saudi Arabia, the world’s largest exporter, raised pricing on most oil grades in July. Zinc climbed as much as 1.9 percent in London, rising for an eighth day to its highest level since July 2015, buoyed by speculation that mine supply cuts will lead to a worsening deficit. Nickel gained 2.3 percent and copper rose 0.9 percent. Iron-ore futures in Dalian jumped 2.7 percent after the first decline in Chinese port inventories in three weeks. Stockpiles fell 0.4 percent last week to 100.25 million metric tons, according to data compiled by Shanghai Steelhome Information Technology Co

In FX, the most notable mover as noted last night was the pound which tumbled to to $1.4390, near session lows, on an ITV opinion poll that found 45 percent of Britons backed the ‘Leave’ campaign, compared with the 41 percent who were for ‘Remain.’ The numbers were 43 percent for ‘Leave’ and 41 percent for ‘Remain’ in a TNS survey. “If there’s any one other currency investors may want to go short on besides paring long dollar positions that would be sterling,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “There’s a binary event risk of much greater proportions than just a policy move.” The Bloomberg Dollar Spot Index was up 0.2 percent, after tumbling 1.5 percent in the last session following the U.S. jobs report. Payrolls climbed by 38,000 in May, less than the most pessimistic estimate in a Bloomberg survey. The yen weakened 0.6 percent to 107.19 per dollar, after a 2.2 percent surge on Friday that marked its biggest gain since April. The euro fell 0.2 percent, after a 1.9 percent gain on Friday that was biggest jump of the year. The MSCI Emerging Markets Currency Index rose 0.9 percent. Indonesia’s rupiah climbed 1.6 percent, and Malaysia’s ringgit strengthened 1.2 percent. China’s yuan fell to its lowest level against a basket of peers since November 2014 after the central bank strengthened the fixing by less than expected following a slump in the dollar.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities trade modestly higher as participants await direction from the US in the wake of Friday's NFP release and ahead of Yellen's upcoming speech
  • Despite recovering throughout the European session, GBP was dealt a blow overnight as the latest batch of polls lean in favour of the leave camp
  • The rest of the session is light in terms of data, and will see all focus on the much anticipated speech from Fed's Yellen this afternoon, which will garner even more attention in the wake of Friday's jobs release
  • Treasuries rally in overnight trading while global equities are mixed and US dollar index rises as GBP drops as polls in Britain show majority now favor exit from EU.
  • Pablo Iglesias, leader of the Spanish anti-establishment party Podemos, said the concessions European Union leaders gave David Cameron to help keep the U.K. in the bloc were “shameful”
  • Being opaque has been paying off for Janet Yellen. That’s one reason not to expect razor-sharp clarity as she speaks in Philadelphia later on Monday
  • China must improve monetary policy communication as it takes on an increasingly large role in the global economy, U.S. Treasury Secretary Jacob J. Lew said in an interview ahead of talks in Beijing between the two countries
  • Banks known as primary dealers, which trade directly with the Federal Reserve and bid at U.S. debt auctions, have bought just 30 percent of the new securities this year, the smallest share on record, data compiled by Bloomberg show
  • Negative interest-rate stimulus is half working in Japan, as lenders cut government bond holdings by the most in almost three years, only to hoard proceeds at the central bank
  • German factory orders declined in April as demand for investment goods from outside the 19-nation currency region slumped. Orders, adjusted for seasonal swings and inflation, fell 2 percent from the prior month
US Event Calendar
  • 10am: Labor Market Conditions Index Change, May, est. 0 (prior -0.9)
  • 12:30pm: Fed’s Yellen speaks in Philadelphia
DB's Jim Reid concludes the overnight wrap

Just in case you haven't seen the numbers from Friday payrolls were only 38k (vs. 160k expected and the lowest since September 2010) and were revised down 59k across the prior two months. Suddenly the 3-month average has fallen to 116k from 181k. As DB's Joe LaVorgna points out this is the weakest growth since July 2012, a couple of months before QE3 started. The good news is that the unemployment rate fell to 4.7% from 5.0% (vs. 4.9% expected) but perhaps there's an element that it's getting more difficult to hire. We should also acknowledge that the Verizon strike would have impacted these numbers so June's report will be important to see the impact reversed.

The weak report makes for an interesting appearance from Yellen tonight (5.30pm BST) as surely she can't confidently signal a summer hike now? However she was relatively hawkish when she spoke 10 days ago at Harvard so will one number knock her back to her normal dovish leanings. The market has certainly voiced its opinion. We've had a big round trip in June and July hike expectations over the last month. Only 4 weeks ago the probabilities were 4% and 17%. They then climbed to a peak of 34% and 54% on May 24th before landing at 4% and 27% this morning.

Interestingly risk assets in the US actually held up relatively OK by the end of play on Friday. The initial knee jerk reaction for the S&P 500 was to tumble -0.90% only to then steadily rise over the remainder of the session before finishing the day ‘just’ -0.29% lower. It was a similar story in credit where CDX IG was a couple of basis points wider initially before rallying back to finish pretty much flat. There was no such rebound for the US Dollar though with the Dollar index eventually ending -1.61%, the biggest one-day decline this year. It was one-way traffic for Treasuries too. 10y yields ended up at 1.700% and 10bps lower on the day, while 2y yields were down over 11bps to 0.774% and to the lowest level since mid-way through last month. Gold (+2.74%) snapped out of its recent funk in style for its strongest day since the 11th February.

This morning in Asia it’s fairly mixed for most regional bourses with the standout mover being in Japan again where a big rally for the Yen on Friday (+2.15%) has resulted in the Nikkei (-1.14%) and Topix (-1.17%) taking a steep leg lower this morning. Meanwhile the Hang Seng (-0.31%) is also lower this morning, while markets in China and Korea are little changed. The ASX (+0.85%) is the big outperformer this morning while US equity index futures are little changed.

Also attracting some headlines is over in the FX market where Sterling (-0.90%) has tumbled following further referendum polls over the weekend showing voters favouring leaving the EU. The poll run by YouGov for ITV had 45% voting to leave versus just 41% at remain, while a survey run by TNS had the split at 43% versus 41% in favour of leave. It’s worth noting that tomorrow evening we will see PM David Cameron and UKIP leader Nigel Farage take part in a live debate on Brexit with another debate (with speakers to be announced) scheduled for Thursday. Such has been the recent swings of late in polls that implied 1-month volatility in the GBP/USD pair has jumped to 21.5% this morning which is the highest now since February 2009.

Most of the other weekend newsflow has been a continuation of the fallout from Friday’s data, although one event worth highlighting is yesterday’s referendum in Switzerland on the unconditional basic income plan for all residents. The final results showed that 77% voted against the plan with just 23% favouring the introduction of a minimum income for all. The result won’t come as much of a surprise with the idea gaining little support amongst Swiss politicians or parties, but nonetheless the vote was closely watched internationally with the FT suggesting that local and national governments in Brazil, Canada, Finland, Netherlands and India are said to be debating the idea of a similar sort of basic income.

Switching back to Friday’s data and quickly recapping the rest of the May employment report. Average hourly earnings rose +0.2% mom in May which has had the effect of keeping the YoY rate unchanged at +2.5%. Average weekly hours were unchanged at 34.4hrs which was slightly disappointing given expectations were for a modest rise to 34.5hrs. The labour force participation rate dipped to 62.6% which was a decline of two-tenths and marks the second consecutive decline. Finally the broader U-6 measure of unemployment printed unchanged at 9.7% which is essentially where it has been for four months now.

Also contributing to the disappointing batch of releases on Friday was the ISM services reading which fell more than expected in May (-2.8pts to 52.9; 55.3 expected) with the reading now at the lowest level since February 2014. The employment component in particular (-3.3pts to 49.7) confirmed the weakness in the May payrolls number, while new orders (-5.7pts to 54.2) and business activity (-3.7pts to 55.1) components also softened. Elsewhere, there was a modest upward revision to the final services PMI (+0.1pts to 51.3), while the April trade deficit widened to $37.4bn from a revised $35.5bn.

We did get some initial reactions to Friday’s data from the Fed. Governor Brainard, a notable dove, was unsurprisingly the most cautious, saying that the report was ‘sobering’ and that ‘in this environment, prudent risk management implies there is a benefit to waiting for additional data to provide confidence that domestic activity has rebounded strongly and reassurance that near-term international events will not derail progress toward our goals’. Brainard also made further comments on the upcoming UK EU referendum vote, warning that while the economic effects are difficult to quantify for Brexit ‘we cannot rule out a significant adverse reaction to such an outcome in the near term, such as a substantial jump in financial risk premiums’.

Meanwhile, Cleveland Fed President Mester was a bit more upbeat in her post-payrolls comments on Friday. A more hawkish leaner usually, Mester said that she still believes a gradual upward pace of rate hikes is appropriate although that ‘when the rate hikes will occur and the slope of that gradual path is data dependent’. Mester added that the weak employment number had not changed her economic outlook.

Over in Europe on Friday, the main take away from the price action was the reasonable underperformance for risk assets in the region. Indeed, unlike the rebound in the US the Stoxx 600 ended -0.89% as financials names dragged the index lower. It also capped what was a rough five days for European equities (-2.39%) following three straight weekly gains. Sovereign bonds were the big winners on Friday however. 10y Bund yields ended up nearly 5bps lower at 0.067% which is the lowest closing yield on record. That 0.049% intraday low struck back in April last year is suddenly well within sight again. Meanwhile 5y Bund yields tumbled even further into negative territory at -0.415%, while 8y (-0.202%) and 9y (-0.079%) yields all struck all time record lows.

Before we turn to the week ahead, there was actually some data in Europe to highlight on Friday which eventually got overshadowed by those across the pond. It was positive too with the final May composite PMI for the Euro area revised up 0.2pts to 53.1 following similar upward revisions for the manufacturing and services data. That composite level has been relatively stable for a few months now and our European economists noted that it is consistent with Euro area GDP growth of between +0.3% and +0.4% qoq in Q2.

Turning over now to this week’s calendar. It’s a quiet start to proceedings today with just Euro area investor confidence data and German factory orders this morning, while over in the US the usual post-payrolls lull is in effect with the labour market conditions index reading the only data of note. Tuesday morning during the Asia session we’ll have the usual focus on the China foreign reserves data, while the RBA cash rate decision is also due out (no change expected). In Europe on Tuesday the main data of note is the final revision for Q1 GDP in the Euro area (+0.5% qoq expected), while French trade data and German industrial production data is also due. Over in the US on Tuesday consumer credit, Q1 nonfarm productivity and unit labour costs and the IBD/TIPP economic optimism reading are the main releases of note. It’s set to be a busy morning in Asia on Wednesday where we’ll get China trade data for May (a slowdown in exports is expected) and the final revision for Q1 GDP in Japan. Over in Europe UK industrial production and French business sentiment data are due, while in the US the April JOLTS job opening report is the sole release on Wednesday. We’re in China again on Thursday when the May CPI (no change to +2.3% yoy expected) and PPI reports are due out. During the European session on Thursday the main data of note due out is the German and UK trade numbers for April. Over in the US meanwhile we’ll get the latest initial jobless claims print as well as the April wholesale inventories and trade sales report. In Europe on Friday we’ll get French industrial production and German CPI. We finish in the US on Friday with the May Monthly Budget Statement and a first take on the June University of Michigan consumer sentiment survey.

Away from the data, the big focus from a Fedspeak perspective will be on the comments from Fed Chair Yellen early this evening (5.30pm) BST when she is due to speak in Philadelphia addressing the World Affairs Council. Rosengren is also scheduled to speak sometime today or tomorrow in Helsinki. Over at the ECB meanwhile we are due to hear from Coeure (today), Nouy (Wednesday) and Draghi (on Thursday) – the latter of which is speaking at the Economic Forum in Brussels. Also worth mentioning this week are the various US presidential primaries on Tuesday including California, the release of the World Bank’s Global Economic Prospects 2016 report and an ITV televised debate between UK PM Cameron and UK Independence Party leader Farage on the UK EU referendum vote. The latter two events are also scheduled for Tuesday.

http://www.zerohedge.com/news/2016-...ing-fridays-jobs-fiasco-all-eyes-yellen-again
 

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Asian Metals Market Update: June-6-2016
By: Chintan Karnani, Insignia Consultants
It has been a sort of a muted reaction by gold and silver in the Asian session after Friday’s US jobs number. Yellen’s speech today and other risk’s over the next two weeks are preventing gold and silver from zooming. In May everyone was foxed after the US jobs number. Traders and investors are all cautious. If the Federal Reserve overlooks the US jobs numbers, then it can still raise interest rates this month or next month. There are bright spots all over the US economy apart from the employment numbers. The UK European Union referendum will also have an impact.
 

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Frontrunning: June 7


by Tyler Durden - Jun 7, 2016 7:41 AM

  • Soothing Fed sounds send stocks to five-week high (Reuters)
  • Clinton reaches magic number in fight for Democratic nomination (Reuters)
  • Euro-Area Economy Grows Faster as Consumption Gathers Pace (BBG)
  • Trump unyielding on Hispanic judge uproar (Reuters)
  • European Firms Find ‘Increasingly Hostile’ Environment in China (WSJ)
  • China tells U.S. to play constructive South China Sea role (Reuters)
  • Republican Alternative to Dodd-Frank Calls for Banks to Boost Capital (WSJ)
  • Saudi Arabia to Cut Public-Sector Wage Bill in Post-Oil Plan (BBG)
  • Goldman Probed Over Malaysia Fund 1MDB (WSJ)
  • Syrian army, U.S.-backed forces advance separately against Islamic State (Reuters)
  • Struggling Ralph Lauren Tries to Fashion a Comeback (WSJ)
  • The Alchemist Who Turned Toxic Assets Into Gold at Citigroup (BBG)
  • World’s Safest Market Beset by Most Volatility Since 2008 Crisis (BBG)
  • Brazil sports minister plays down Zika fears for Rio (Reuters)
  • Eurozone beats growth expectations (BBG)
  • Bankers Linked to Tax Evasion Face Tougher Penalties in Denmark (BBG)
  • India central bank chief wary of banks taking majority in stressed-debt funds (Reuters)
  • Primary may shut out Republicans from California U.S. Senate race (Reuters)
Overnight Media Digest

WSJ

- Hillary Clinton secured the delegates needed to clinch the Democratic nomination Monday night, according to an Associated Press tally, crossing a historic milestone as she campaigned in California and pushed to end a long presidential primary campaign on a high note. (http://on.wsj.com/1Yc6quK)

- Nike is suing Boris Berian, the world indoor 800-meter champion, in an effort to stop him from joining New Balance, a sign of rising tensions between athletes and companies that bankroll Olympic sports. (http://on.wsj.com/1Yc6U3O)

- U.S. investigators are attempting to identify whether Goldman Sachs Group Inc violated federal law after failing to flag a transaction in Malaysia, according to people familiar with the investigation. (http://on.wsj.com/1Yc6L0v)

- Federal Reserve Chairwoman Janet Yellen affirmed that the central bank won't be raising short-term interest rates until new uncertainties about the economic outlook are resolved. (http://on.wsj.com/1Yc6DOy)

FT

Burberry paid its chief executive, Christopher Bailey, 75 percent less last year than in the 2014-15 period after the British luxury brand failed to meet its profit target, meaning the boss lost out on his bonus and other incentives.

Banks will be encouraged to lend more to their weakest borrowers and take on excessive risks if global regulators go ahead with proposals to give banks less freedom to use their own models, the Institute of International Finance has warned.

Rothschild & Co and Compagnie Financiere Martin Maurel said they plan to merge, a move that will combine their French private banking and asset management businesses and create a private bank with combined assets under management of about 34 billion euros

NYT

- In a move sure to bring cheer to junior associates at major law firms, one of the industry's most elite, Cravath, Swaine & Moore, on Monday said it had increased the annual salary for its first-year lawyers to $180,000, from $160,000. (http://nyti.ms/1tdJ6kC)

- National Amusements, the theater chain through which Sumner Redstone controls his media empire, said on Monday that it had altered Viacom's corporate bylaws to prevent the entertainment company from selling any part of Paramount without the approval of the full board. (http://nyti.ms/1UvFRe5)

- Regulators are wrangling with bankrupt coal companies to set aside enough money to clean up Appalachia's polluted rivers and mountains so that taxpayers are not stuck with the $1 billion bill. (http://nyti.ms/1U5hjeB)

- Troy Carter, known as an innovative manager for musicians and a prolific tech investor, has joined Spotify as its global head of creator services, overseeing the company's relationships with artists, songwriters and record companies, Spotify said on Monday. (http://nyti.ms/1Obm7Qq)

Canada

THE GLOBE AND MAIL

** Commodities from oil to gold have ended their epic swoon - and, in the process, turned Canadian stocks into some of the world's hottest offerings. The Bloomberg Commodity Index, which tracks 22 raw materials, finished Monday more than 20 percent above its low on Jan. 20, meeting the most common definition of a bull market. (http://bit.ly/1TTc5jY)

** The legalization of assisted death enters a new era Tuesday, marked by conflicting approaches by provinces and uncertainty for patients and doctors after the Supreme Court deadline to create frameworks for assisted dying expired on June 6. (http://bit.ly/1Ob88ds)

** Calgary Mayor Naheed Nenshi on Monday accused his Vancouver counterpart, Gregor Robertson, of fear-mongering over the latter's high-profile campaign to block an oil pipeline project that many in Alberta see as crucial to the province's economic well-being. (http://bit.ly/1PDl9Nr)

NATIONAL POST

** Two senior editors have left the Toronto Star newsroom in the last few days. Spokesman Bob Hepburn said Monday that managing editor Jane Davenport has transferred to a different role at her own request. He said Davenport will remain an employee of parent company Torstar Corp and that details on her new job will be announced soon. The move comes after the departure last week of Jon Filson, the head of the paper's StarTouch tablet project. (http://bit.ly/1UaKCho)

** In Canada, the federal Liberals, along with governments in Ontario, Quebec and Alberta have expressed interest in the concept of a guaranteed minimum income - also known as a guaranteed annual income. While basic income guarantee, or basic income, is often said to enjoy support across the political spectrum, it's clear that left and right have very different ideas of what it would mean. (http://bit.ly/1Y5GoZN)

** Outspoken Ontario New Democrat Cheri DiNovo will be the first person to announce a bid for the leadership of the federal NDP. DiNovo will make the announcement official Tuesday morning from a church in Toronto's Parkdale-High Park riding that she currently represents. (http://bit.ly/22KN7ci)

Britain

The Times

- Less than 2-1/2 weeks before the EU referendum, investors were unnerved by evidence that the Remain campaign was losing momentum and sterling fell to a three-week low. (http://bit.ly/25Iw504)

- Burberry Group Plc CEO Christopher Bailey's total pay has fallen by 75 per cent to 1.9 million pounds ($2.75 million) and his annual bonus was axed after a challenging year. (http://bit.ly/25IvzPF)

The Guardian

- Mike Ashley, the founder and deputy chairman of Sports Direct International Plc, has admitted for the first time to problems with the security and search procedures at the retailer's Derbyshire warehouse. (http://bit.ly/25IvMCF)

- Retail Acquisitions, the former owner of BHS, pledged to keep all funds in the business and plough any proceeds from the sale of the group's properties into its day-to-day running until a deal had been struck on the future of the BHS pension scheme. (http://bit.ly/25IwboE)

The Telegraph

- Martin Abbott, former chief executive of the London Metal Exchange, which was bought by rival Hong Kong Exchanges and Clearing four years ago, is considering setting-up a competing trading platform. (http://bit.ly/25IxqEi)

- A breakthrough oncology drug from AstraZeneca Plc, known by its brand name Lynparza, is showing promising long-term results in women with ovarian cancer, one of its leading scientists has revealed at a closely watched pharmaceuticals conference. (http://bit.ly/25IxML8)

Sky News

- Royal Dutch Shell Plc executives are expected to use a presentation to investors on Tuesday to highlight the company's concerns that an independent Scotland would be unable to support the North Sea's huge decommissioning costs during a period when many platforms are being decommissioned. (http://bit.ly/25IyDv7)

- Owners of GHD, a supplier of hair products to celebrities such as Victoria Beckham and the singer Katy Perry, are plotting a sale that will value it at more than 400 million pounds. (http://bit.ly/25IyDvb)

The Independent

- EasyJet Plc cancelled more than 170 flights in May, the budget-carrier has said. There were 173 cancellations for the month, which were largely due to French air control strikes and poor weather. (http://ind.pn/25IyIPJ)

http://www.zerohedge.com/news/2016-06-07/frontrunning-june-7
 

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#9
S&P Nears All Time High, Global Stocks Rally As Dovish Yellen Unleashes Animal Spirits


by Tyler Durden - Jun 7, 2016 6:50 AM

Stock whisperer Yellen said all the right things yesterday, when she sounded more optimistic than pessimistic on the economy but while the economy is "strong" it is most likely not strong enough to weather a rate hike in the immediate future. As a result, the S&P 500 climbed toward a record on Monday (and continued rising overnight) after Yellen said she expects to raise interest rates only gradually and held off from specifying any timeframe, a shift from her May 27 stance that a move was probable “in the coming months.” This was interpreted that both a June and July rate hike are now off the table, with September odds rising modestly.

And in a world where a hawkish Fed is bullish but a dovish Fed is even more bullish, stocks took their cue from Janet and sprang higher first in the US, and then across the globe, rallying with emerging markets because as Bloomberg put it, Yellen won't "derail the recovery with a premature interest-rate increase." If by premature BBG means a second hike one in a decade, then yes.

Of course, what Yellen really meant is to give algos a green light to trigger all stops at the new 2016 highs, and then to continue to the fresh all time high in the S&P500, which as of this moment is less than 1% away, and will likely be taken out today.

Thanks to Yellen, the MSCI All Country World Index headed for its strongest close since April, led by gains in energy companies and raw-materials producers. Emerging-market stocks and currencies advanced for a fourth day. The Bloomberg Commodity Index snapped a four-day gain that had pushed it to a bull market. The South Korean won surged the most in six years, and the currencies of Australia and India also rose after the nations’ central banks kept interest rates unchanged. The pound advanced as a poll showed the campaign to keep Britain in the European Union ahead. The odds of a rate hike by July dropped to 22 percent in the futures market, after halving to 27 percent on Friday as a report showed U.S. jobs growth in May was the weakest in almost six years. S&P 500 futures advanced 0.3%, indicating U.S. equities will extend gains on Monday that were propelled by Yellen’s remarks, and close at new 2016 highs, if not new all time highs entirely.

“It seems likely that we will get at most one rate hike this year and that’s positive for equities and commodities,” said Ric Spooner, chief analyst at CMC Markets in Sydney. "Of the beaten-down commodities, the oil market is the best place. We’re already seeing supply cutbacks.”

While a Brexit will ultimately not be allowed, analysts continue to pay attention to the latest polls out of the UK. According to the latest Times/YouGov poll, 43% would vote to remain in EU and 42% would vote to leave. ORB/Telegraph poll showed 48% would vote to remain in EU and 47% would vote to leave. Furthermore, the Telegraph wrote: Leave campaign closes gap to narrowest margin yet as latest poll shows Brexit vote will go down to the wire.

“While polls suggest the ‘‘remain’’ campaign has established at least a modest lead, one persistent concern has been that low turnout could skew the result in the direction of those who care most about the issues surrounding Brexit,” JP Morgan’s Allan Monks says in note. “Turnout could prove decisive, however, in a very close outcome.”

Finally, for commodity watchers, WTI advanced 0.4% to $49.90 a barrel, having risen above $50 earlier in the session. API data later on Wednesday is forecast to show crude stockpiles dropped for a third week, declining by roughly 3 million barrels. The reason for the latest leg higher in oil was the dollar weakness in the past 24 hours. Also, Eni SpA said 65,000 barrels a day of supply was halted Friday after a militant attack in Nigeria.

Market Snapshot
  • S&P 500 futures up 0.3% to 2115
  • Stoxx 600 up 1.3% to 347
  • FTSE 100 up 0.7% to 6315
  • DAX up 1.5% to 10278
  • German 10Yr yield down less than 1bp to 0.09%
  • Italian 10Yr yield down 2bps to 1.45%
  • Spanish 10Yr yield down 4bps to 1.48%
  • S&P GSCI Index up 0.2% to 379.6
  • MSCI Asia Pacific up 1% to 131
  • Nikkei 225 up 0.6% to 16675
  • Hang Seng up 1.4% to 21328
  • Shanghai Composite up less than 0.1% to 2936
  • S&P/ASX 200 up 0.2% to 5371
  • US 10-yr yieldunchanged at 1.74%
  • Dollar Index down 0.11% to 93.8
  • WTI Crude futures up 0.5% to $49.95
  • Brent Futures up 0.6% to $50.87
  • Gold spot down 0.3% to $1,242
  • Silver spot down 0.9% to $16.32
Top Global News
  • Clinton Clinches Nomination, Becoming First Woman to Lead Ticket: Hillary Clinton secured the delegates required to claim the Democratic presidential nomination Monday, according to the Associated Press; Obama, Sanders Said to Speak as Endorsement of Clinton Planned
  • Verizon Bidding $3b for Yahoo Assets, WSJ Reports: co. will bid $3b for Yahoo’s main internet assets, the WSJ reported, seeking to edge out AT&T, TPG and other potential buyers
  • Samsung Said to Consider Bendable-Screen Phones for 2017: co. considering introducing 2 new smartphone models that will feature bendable screens, including a version that folds in half like a cosmetic compact
  • Lotte Chemical Offers Plan to Buy Axiall to Diversify: offer to buy polyethelene maker Axiall as South Korean based petrochemical co. seeks to build on its takeover of Samsung Group’s chemicals arm
  • GM CEO Says ‘Undervalued’ Carmaker Can Sustain Profit Long Term: Barra sees GM breaking even in 10 million-unit U.S. market
  • Raytheon Says $1b Cyber Contract Confirmed After Protests: co. will keep contract that affects more than 100 agencies
  • Ralph Lauren holds first investor day, expected to give 1Q, FY2017 forecasts; Ralph Lauren Said to Plan to Cut Up to 10% of Jobs: WWD
  • Merck’s Patent Win Over Gilead Reversed Over False Testimony: judge throws out $200m jury verdict in hepatitis C case
  • Oil Holds Near 10-Month High as U.S. Stockpiles Seen Declining: U.S. inventories estimated to drop 3 million barrels last week
  • Zillow Settles Suit With Murdoch’s News Corp. Over Trulia: Zillow to pay Murdoch’s Move $130m in settlement
  • Tropical Storm Colin Knocks Out Power as It Moves Across Florida: some areas already soaked with rain, experiencing high winds
Looking at regional markets, Asia stocks traded mostly positive following Fed Chair Yellen's comments which were "cautiously optimistic" on the economy, yet dovish at the same time, and dampened the likelihood of an imminent rate hike as she omitted mentioning a timeframe. Energy dictated sentiment in the ASX 200 (+0.2%) and Nikkei 225 (+0.6%) as both indices coat-tailed on the gains seen in oil prices, with the latter also supported by a bout of JPY weakness. Chinese markets traded mixed as the Hang Seng (+1.4%) advanced on strong property and automaker sales while the Shanghai Comp (+0.1%) lagged after the PBoC kept its liquidity injections reserved ahead of its holiday closures beginning on Thursday. 10yr JGBs traded marginally lower as gains in stocks dampened demand for safer assets, while a stronger 30yr auction in which the b/c rose from prior and tail in price narrowed, also failed to lift demand for 10yr JGBs.

Top Asia News
  • China to Give $38 Billion RQFII Quota to U.S. in First-Ever Move: U.S. gets largest Chinese investment quota after Hong Kong
  • Rajan Holds India Rate as Speculation Swirls on His Future: RBI to stay accommodative as inflation uncertainties abound
  • Australia Holds Rate; Lack of Policy Guidance Spurs Currency: Traders pare bets to 46% for an August cut from 64% Monday
  • Everbright Shuts China Hedge Fund After Returns Stumble in Rout: Firm will reallocate funds’ assets to another China strategy
  • Australian Regulator Starts BBSW Civil Proceedings Versus: ASIC starts legal proceedings in the Federal Court in Melbourne
European equities have taken the firm lead from Asian bourses with the Euro Stoxx 50 firmly in the green (+1.3%) after comments from Fed Chair Yellen which were optimistic on the economy while also dampening the likelihood of an imminent rate hike. Additionally, upside in equities this morning has been further bolstered by the upside in crude prices with WTI edging towards USD 50/bbl. Bunds have traded relatively flat despite the increased risk-on tone across the region, as well as the slew of supply expected to hit the market (Approximately EUR 9.6bIn) with German paper benefiting from the aforementioned Yellen comments. Additionally, peripheral bonds have been notable outperformers to lead Euro-area yields lower.

Top European News
  • Euro-Area Economy Grows Faster as Consumer Spending Gathers Pace: 1Q GDP increases 0.6% vs. May 13 reading of 0.5%; expansion driven by household consumption, investment
  • German Industry Output Recovers in April on Investment Surge: production expanded 0.8% versus estimated 0.7% increase
  • Shell Deepens Spending Cuts, Promises More Savings From BG: trims expected 2016 capex by $1b to $29b; free cash flow, return on capital to rise at $60-a-barrel oil
  • Deutsche Bank Is Only Thing Missing From Germany’s Biggest Deal: bank said not to advise on, finance Bayer’s Monsanto bid
  • Brexit Is No Issue for U.K. Stocks With Traders Doubting Polls: British equities near cheapest of year versus global shares; Brexit Threatens to Destroy 18 Months of Swiss Toil in a Stroke
In FX, the Aussie strengthened almost 1 percent versus the greenback, having been little changed prior to the Reserve Bank of Australia’s policy meeting. The authority refrained from giving any guidance on whether it will consider adding to May’s interest-rate cut. India’s rupee gained 0.3 percent, reaching a three-week high after central bank Governor Raghuram Rajan left borrowing costs unchanged as widely expected. The pound was 1.1 percent higher, the strongest gain since March 17. Sterling has fluctuated in recent weeks, depending on which side of the EU referendum argument was gaining momentum. Sterling’s climb comes after it dropped in early trading Monday, as three polls were released showing more Britons favor quitting the EU than staying. Two more surveys that came later the same day showed slim leads for the “Remain” camp. The Bloomberg Dollar Spot Index slipped 0.2 percent, set for its weakest close since May 11 based on closing prices. The yuan fell for a second day after the People’s Bank of China weakened its daily reference rate by the most in a week.

In commodities, the Bloomberg Commodity Index declined for the first time in a week, having ended Monday more than 20 percent higher than its January low. A four-year bear market that pushed raw materials to the lowest level in a quarter century has drawn to an end after supply constraints drove a recovery from soybeans to zinc. Gold slipped 0.3 percent, trimming this month’s advance to 2.3 percent. Zinc fell 0.1 percent on the London Metal Exchange, retreating from its highest close since July 2015. Copper fell 1.5 percent, while aluminum was little changed. Aluminum prices are likely to decline as smelters in China, the biggest producer, restart capacity to take advantage of thicker margins, Goldman Sachs Group Inc. said in a report Monday. West Texas Intermediate crude oil advanced 0.2 percent to $49.81 a barrel, having climbed 2.2 percent to a 10-month high on Monday. U.S. government data due Wednesday is forecast to show crude stockpiles dropped for a third week, trimming a glut. Eni SpA said 65,000 barrels a day of supply was halted Friday after a militant attack in Nigeria.

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities trade higher across the board in a continuation of the dovish sentiment seen yesterday and overnight in Asia
  • Once again we see GBP taking centre stage, swinging higher today as EU polls from the Times and the Telegraph now showing the Remain camp showing a small lead
  • Looking ahead, highlights include API Inventories and potential comments from ECB's Makuch and Knot
  • Treasuries little changed overnight as global equities and WTI oil rally; week’s auctions begin with $24b 3Y notes, WI 0.97%; sold at 0.875% in April, was biggest stop through by a 3Y since 2009.
  • June is out. July might be too soon. The Federal Reserve’s next interest-rate increase is coming, but even September isn’t a sure bet. That’s the message investors and economists are taking from Chair Janet Yellen’s remarks Monday
  • A Federal Reserve interest-rate increase would be good for China because it would signal demand is rising and the U.S. economy is improving, People’s Bank of China Deputy Governor Yi Gang said at a briefing
  • China’s foreign-exchange reserves slipped to the lowest level since late 2011 as a rallying dollar ate into the value of its holdings. The world’s largest currency hoard fell by $28 billion to $3.19 trillion in May
  • Euro-area GDP grew 0.6% in 1Q, faster than previously estimated, driven by investment and a pickup in consumer spending, according to the European Union’s statistics office
  • German industrial production rebounded in April to 0.8% from -1.1% in March in a sign that Europe’s largest economy is benefiting from a pick-up in investment
  • Even before Mario Draghi starts his corporate-bond buying program on Wednesday, he’s pushed down borrowing costs in Europe toward unprecedented levels. The average yield on investment-grade company notes in euros tumbled to 1.002%
  • Saudi Arabia approved its National Transformation Program, a key part of a blueprint to prepare the kingdom for the post- oil era. The plan outlines a number of initiatives to be undertaken by different ministries
  • House Financial Services Committee Chairman Jeb Hensarling wants to cut a deal with U.S. banks: Raise several hundred billions of dollars in additional capital and Washington will let you break free from a litany of burdensome rules
  • With Democrats in six states still to make their choices on Tuesday, the Associated Press said that its count shows Clinton had secured the number of pledged delegates and superdelegates required to claim the Democratic nomination
US event calendar
  • 8:30am: Non-farm Productivity, 1Q F, est. -0.6% (prior -1%)
  • 8:55am: Redbook weekly sales
  • 10am: IBD/TIPP Economic Optimism, June (prior 48.7)
  • 3pm: Consumer Credit, April, est. $18.0b (prior $29.674b)
  • 4:30pm: API weekly oil inventories
DB's Jim Reid concludes the overnight wrap

Well it looks like the round trip in Fed tightening expectations is pretty much complete now with Yellen’s straight bat approach yesterday bringing the focus back to the data while at the same time also keeping full optionality on the table. Rewind ten days or so ago when Yellen said at Harvard University that a rate hike might be appropriate in the coming months, well yesterday any mention of timing was rightly avoided and instead the mantra of ‘further gradual increases in the federal funds rate will probably be appropriate’ was provided. It did feel like the ‘probably’ part of that by itself came across as a little bit softer in nature though.

Indeed there was a familiar balancing act feeling to the tone with the Chair clearly trying to balance the nervousness of Friday’s employment report with trying not to read too much into one piece of data. While the Fed Chair said that ‘I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones’, Yellen also made mention to recent signs in job creation bearing ‘close watching’ with the Friday jobs report being described as ‘disappointing’ and ‘concerning’. She also listed a number of ‘considerable and unavoidable’ uncertainties which may have the potential to affect the outlook and path ahead. This appeared to include doubts about the resiliency of domestic demand as well as potential ‘significant economic repercussions’ from this month’s Brexit referendum and also the ‘considerable’ challenges in China.

In fact Yellen interestingly offered a number of relevant questions herself without actually answering them, instead saying that ‘my colleagues and I will be wrestling with these and other related questions going forward’. The end result of all that was decline in summer tightening expectations though, albeit not quite to the extent as that seen post payrolls on Friday. June (2%) is now more or less completely out of play, while the probability of a hike in July is back down to 22% this morning after finishing at 27% on Friday. Further afield September is currently sitting at 42%.

Interestingly risk assets in the US had another resilient day. US equities dipped temporarily but the S&P 500 still ended up +0.49% (and at one stage hit a high for the year) although it was the outperformance for credit markets which caught the eye with CDX IG rallying to the tune of 3bps. Oil markets appeared to be a helping hand there as WTI rebounded just over 2% to edge back up close to $50/bbl as more supply disruption concerns in Nigeria and price hikes in Saudi Arabia dictated moves in energy markets. It was a quieter day for the US Dollar with the Dollar index (-0.14%) ending with a much more modest move lower, while over in the Treasury market yields backed up a couple of basis points higher.

This morning in Asia and China aside the majority of bourses appear to be following that positive lead from the close in the US last night. Indeed the Nikkei (+0.36%), Hang Seng (+0.61%), Kospi (+0.93%) and ASX (+0.50%) are all up although in China the Shanghai Comp (-0.33%) and CSI 300 (-0.28%) have failed to hold onto early gains. It’s not entirely obvious what’s causing the move lower in China although the lack of direction may in part reflect investors waiting for the latest foreign reserves data due out at some point this morning.

FX markets have also been the subject of some early focus this morning. The Aussie Dollar is +0.45% after the RBA left rates on hold as expected. Meanwhile Sterling (+0.76%) has rebounded well on the back of another Brexit poll late last night. The YouGov run poll for the Times newspaper has the remain camp with a 1 point lead over the leave camp at 43% to 42%. Elsewhere, the Associated Press is reporting that Hilary Clinton has now secured enough delegates to claim the Democratic nomination. That comes ahead of tonight’s six scheduled primaries, including California.

Back to China where yesterday our China Chief Economist Zhiwei Zhang published part four of his China tail series report. In it he highlights that China’s government has started to tighten credit control which is starting to feed through to financial markets with a slowdown in corporate bond issuance being felt. Zhiwei thinks that the government’s strategy is to contain the build-up of leverage within the financial sector and bolster direct financing through policy banks. In his view this could lead to a divergence in the second half of this year with property sector investment likely to slow. Overall Zhiwei believes tightened credit will leader to slower growth in the next half year, putting depreciation pressure on the RMB, while he also expects property prices to soften.

Moving on. As well as those comments from Fed Chair Yellen yesterday, we also heard from a couple of her colleagues. Atlanta Fed President Lockhart, who is usually fairly centrist in his views, said that he doesn’t personally see a lot of cost to being patient to the July meeting and that ‘I think we can be watchful and see how things develop over the next few weeks’. Meanwhile Boston Fed President Rosengren (usually dovish) said that the latest jobs report was disappointing and that ‘it will be important to see whether the weakness in this report is an anomaly or reflects a broader slowing in labour markets’.
Elsewhere yesterday, the calendar was a lot lighter for economic data with the only release coming out of the labour market again with the labour market conditions index reading for May. The data showed the index declining another 1.4pts to -4.8 (vs. -0.8 expected) and as a result touching the lowest level since 2009. It’s not clear how much weight the Fed give to the data series but with the index declining at a relatively fast rate since the turn of the year, it may start to make a few heads turn.

The European session yesterday was fairly quiet although risk assets did manage to rebound following Friday’s weakness. The Stoxx 600 finished up +0.33%, although much like in the US it was the performance for credit markets which stood out with Main and Crossover rallying 3bps and 9bps tighter respectively. Data in the region didn’t add much to the debate. The Sentix investor confidence reading for the Euro area bounced 3.7pts to 9.9 (vs. 7.0 expected) while German factory orders declined more than expected in April (-2.0% mom vs. -0.5% expected).

Looking at today’s calendar, this morning in Europe we’re kicking off in Germany shortly after this hits your emails with the April industrial production data. Shortly following that will be the latest trade balance reading in France before we then get the final Q1 GDP report for the Euro area where expectations are for no change to the initial +0.5% qoq estimate. This afternoon in the US we are due to receive the final Q1 estimates for nonfarm productivity and unit labour costs data, as well as the IBD/TIPP economic optimism reading (which is expected to fall half a point to 48.2) and finally the April consumer credit reading later this evening. Away from the data there are a few other events worth highlighting. This evening will see UK PM David Cameron and UKIP leader Nigel Farage take part in a live TV debate on the Brexit vote at 9.00pm BST which could be well worth watching. Meanwhile the World Bank is due to issue its Global Economic Prospects report for 2016 sometime this evening, while the US Presidential race will see six primaries vote including California.

http://www.zerohedge.com/news/2016-...-rally-dovish-yellen-unleashes-animal-spirits
 

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#11
Asian Metals Market Update: June-7-2016
By: Chintan Karnani, Insignia Consultants
It is better to ignore the Yellen speech and trade in the technical. Traders are now starting to postpone the expectations of an interest rate hike to September. In my view, if the Federal Reserve does not raise interest rates in July, then it may not do so for the rest of the year. Gold investment demand should now rise as the risk to return ratio moves in favor of the buyer.
 

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#15
BREXIT "Yes" Vote Will Collapse EU | Fabian Calvo
FinanceAndLiberty.com


Published on Jun 7, 2016
This video was posted with permission from Fabian Calvo of http://Fabian4Liberty.com & http://FabianCalvo.me

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#17
Lather. Rinse. Repeat.
By: Peter Schiff, Euro Pacific Capital
Stop me if you've heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back...only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different. But it never is. Last week was just the latest re-telling.

Gold Seeker Closing Report: Gold and Silver End Slightly Lower
By: Chris Mullen, Gold-Seeker.com
Gold fell $9.26 to $1235.94 at about 8:30AM EST before it rallied back higher into the close, but it still ended with a loss of 0.1%. Silver slipped to as low as $16.245 and ended with a loss of 0.43%.
 

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#18
COLLAPSE to WIPE OUT Savings, 401ks, etc. | Greg Mannarino
FinanceAndLiberty.com


Published on Jun 7, 2016
IN THIS INTERVIEW:
- Stock market correction ahead ►0:46
- What effects would a Fed rate hike have? ►5:42
- Could Donald Trump or Hillary Clinton stop an economic collapse? ►9:29
- Why the bond market is key ►11:36
- The economy is a mess right now! ►15:00

FINANCE AND LIBERTY:
SUBSCRIBE (it's FREE!) to "Finance and Liberty" for more interviews and financial insight ►http://bit.ly/Subscription-Link
Website ► http://FinanceAndLiberty.com
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Follow us on Twitter ►http://twitter.com/Finance_Liberty
Google Plus ►http://Gplus.to/FinanceLiberty
Title and video graphics by Josiah Johnson Studios ►http://JosiahJohnsonStudios.com

This interview was recorded on June 7, 2016.

DISCLAIMER: The financial and political opinions expressed in this interview are those of the guest and not necessarily of "Finance and Liberty" or its staff. Opinions expressed in this video do not constitute personalized investment advice and should not be relied on for making investment decisions.
 

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#19
Frontrunning: June 8


by Tyler Durden - Jun 8, 2016 7:38 AM

  • World stocks struggle to build on highs as Europe weighs (Reuters)
  • Oil hits eight-month high on disruptions, Chinese demand (Reuters)
  • Hillary Clinton Set for Democratic Nomination After Primary Wins (WSJ)
  • DNC avoids calling Clinton presumptive nominee (The Hill)
  • Trump, Rattled by Critics, Treads Carefully in Victory Speech (BBG)
  • Ruling against ex-AIG boss Greenberg raises stakes in Trump University case (Reuters)
  • China May exports fall 4.1 percent, but imports beat expectations (Reuters)
  • China Oil Imports Decline as Busy Port Curbs Crude Access (BBG)
  • The Epicenter of America’s Oil Bust Is Drawing Buyers (WSJ)
  • ECB Keeps Buying and Buying, Sending Assets to New Peak (BBG)
  • Police Probe Finds Nothing to Suggest Aubrey McClendon Committed Suicide (WSJ)
  • North Korea restarts plutonium production for nuclear bombs (Reuters)
  • Yahoo Lines Up Bids for About 3,000 Patents (WSJ)
  • We’ve Hit Peak Human and an Algorithm Wants Your Job. Now What (BBG)
  • Dark Days at the Folly as Nomura Traders Join Europe’s Jobless (BBG)
  • Russia deploys troops westward as standoff with NATO deepens (Reuters)
  • Ousted CEO Laplanche studies LendingClub takeover (Reuters)
Overnight Media Digest

WSJ

- Hillary Clinton declared herself the Democratic Party nominee for U.S. president on Tuesday, embracing her role in history as the first woman to lead a major party in a race for the White House. (http://on.wsj.com/24y3Xun)

- A police investigation into the crash that killed Chesapeake Energy co-founder Aubrey McClendon has found nothing to suggest the shale pioneer committed suicide, and McClendon's friends say they saw no signs of trouble before he died (http://on.wsj.com/24y4XhO)

- The U.S. and India agreed to move forward with construction of six nuclear reactors in India by U.S. company Westinghouse, the first such move since the countries signed a landmark civil nuclear deal in 2008. (http://on.wsj.com/24y4hsY)

- Amazon.com Inc plans to invest an additional $3 billion into India, which is emerging as a critical area of growth for the e-commerce giant. (http://on.wsj.com/24y47Sj)

- Yahoo Inc has hired boutique investment bank Black Stone IP LLC to sell about 3,000 of the internet company's patents, according to people familiar with the matter. (http://on.wsj.com/24y4ufQ)

FT

Yildiz, the Turkish owner of Godiva chocolate and McVitie's biscuits, has set up a London-based company that will boost its exposure to international markets and investors, helping the company compete in an increasingly competitive global food industry.

RIT Capital Partners Plc, a British investment trust chaired by financier Jacob Rothschild, said it did not intend to make an offer for Alliance Trust Plc despite "constructive discussions."

Mike Ashley, the billionaire founder of British retailer Sports Direct, said on Tuesday the company effectively paid warehouse staff below the statutory minimum wage by requiring them to queue for security checks on their own time.

NYT

- On Tuesday, top computer scientists along with World Wide Web creator Tim Berners-Lee brainstormed at an event, called the Decentralized Web Summit, over new ways that web pages could be distributed broadly without the standard control of a web server computer, as well as ways of storing scientific data without having to pay storage fees to companies such as Amazon, Dropbox or Google. (http://nyti.ms/1WEdOzn)

- To many in the furniture industry, the 2014 merger of Herman Miller and Design Within Reach was a no-brainer. But a little-noticed lawsuit brought by two long-time shareholders in Delaware contends that the $154 million merger of the two never happened at all. (http://nyti.ms/1TYfX8A)

- A proposal by a senior House Republican Jeb Hensarling to dismantle portions of the 2010 Wall Street reforms known as the Dodd-Frank Act has rekindled a partisan debate over the state of banking regulation eight years after the financial crisis.(http://nyti.ms/1Uod8YH)

- The Senate on Tuesday gave final approval to an overhaul of the nation's 40-year-old law governing the use of toxic chemicals in homes and businesses, sending the bill to President Obama for his expected signature. (http://nyti.ms/25LepnZ)

Canada

THE GLOBE AND MAIL

** General Motors of Canada Ltd will announce on Friday that it plans to hire as many as 1,000 additional engineers, giving a strong boost to its research and development activities in Canada. (bit.ly/1UEnaaK)

** The wildfires that tore into Fort McMurray have left a toxic legacy, with mounds of ash across the city containing harmful levels of contaminants, according to tests conducted over the past month. (bit.ly/1UeHIbr)

** Alberta has told prosecutors and police that no member of medical teams involved in an assisted death for mentally competent, severely ill adults will be prosecuted, the clearest attempt by any province to create certainty around the newly legalized practice. (bit.ly/1PhaPFg)

NATIONAL POST

** Calgary-based Suncor Energy Inc has signed a C$2.5 billion ($1.97 billion) bought deal for the sale of 71.5 million shares at C$35 a share, which represents a discount of C$1.50, or 4.1 percent, to Tuesday's closing price of C$36.50. (bit.ly/1tgIeMk)

** Valeant Pharmaceuticals International Inc Chief Executive Officer Joseph Papa said he was convinced the embattled drugmaker remains misunderstood and should be headed for a turnaround, but investors are less certain. (bit.ly/1UEnztY)

Britain

The Times

- Piers Linney has sent a sharply worded letter to Vittorio Colao, chief executive of Vodafone Group Plc, to complain that the mobile network is responsible for the plight of his cloud computing company, Outsourcery, which has all but collapsed. (http://bit.ly/22NEXjk)

- Royal Dutch Shell Plc announced plans to leave up to 10 countries and cut billions of dollars in spending as it presses ahead with its 35 billion pounds ($50.88 billion)takeover of BG Group in the face of sharply lower oil prices. (http://bit.ly/22NEYnf)

The Guardian

- Mike Ashley's Sports Direct Plc is facing a multimillion-pound bill in fines and back pay after Ashley admitted his company had broken the law by failing to pay staff the national minimum wage. (http://bit.ly/22NFgdW)

- Global growth will slow this year as oil exporters in the developing world struggle to cope with lower energy prices, the World Bank has said in its half-yearly economic health check. (http://bit.ly/22NFIJ8)

The Telegraph

- Terra Firma aired new claims that Michael Klein, then Citigroup Inc's global head of investment banking and now leading his own boutique advisory firm, deceived private equity tycoon Guy Hands over the bank's view of EMI's business. (http://bit.ly/22NGd5W)

- The Turkish owners of United Biscuits have unveiled an ambitious plan to expand the business behind McVitie's biscuits and Jaffa Cakes abroad and then return the company to the London Stock Exchange. (http://bit.ly/22NGhmm)

Sky News

- CBI is urging its members to enable millions of people to work part-time on June 23 to enable them to vote in the EU referendum. (http://bit.ly/1TY3hie)

- British exporters are at risk of paying up to 5.6 billion pounds in duties if the UK votes Out in the EU referendum, the head of the World Trade Organisation, Roberto Azevedo, said. (http://bit.ly/1TY4iqo)

http://www.zerohedge.com/news/2016-06-08/frontrunning-june-8
 

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#20
Futures Levitate To Session Highs As ECB Enters The Bond Market; Crude Hits $51


by Tyler Durden - Jun 8, 2016 6:57 AM

In an overnight session dominated by the latest political developments out of the US where Hillary Clinton officially claimed the democratic nomination, the financial newsflow focused on China's trade data, where exports fell 4.1% from a year earlier, in line with expectations, but imports dropped 0.4% from a year earlier, the smallest decline since they turned negative in November 2014, likely reflecting higher commodities prices but really driven by "imports" from Hong Kong which rose to $2.48b, the highest since at least 1999; and a 243% y/y surge in dollar term, also a historical high. This means that not only is China's economy not improving as the "rebound in imports" would suggest, but that instead Chinese trade overinvoicing continues to be used quietly transfer capital out of the country.

For now however, emerging markets equities and currencies rose for a fifth day, boosted by the "stronger" Chinese trade data, while commodities gained for a sixth day, the longest run in three months, as oil climbed to an eight-month high and metals advanced. Moments ago, oil rose above $51, climbing 1.4%, to fresh 2016 highs, on the same supply disruption narrative which according to PK Verleger now accounts for $15 in premium.

The other main news was the official launch of the ECB's corporate bond buying, which helped drive government bonds yields in German to new record lows, and the average yields on investment-grade corporate debt below 1%. Germany’s 10-year bund yields, already at a record-low, approached zero. Among the bonds supposedly purchased by the central bank were bonds belonging to Engie, Telefonica, Generali, AB InBev, Siemens, Renault, RWE, and others. On the back of the ECB's latest intervention, Germany’s 10-year yield fell to as low as 0.033 percent, the least on record, and was at 0.05 percent as of 10:57 a.m. London time. The yield is likely to test zero as soon as this week, according to the top-ranked primary dealer of the nation’s debt. “The market looks poised to test the level,” said Michael Leister, the Frankfurt-based head of rates strategy at Commerzbank AG. “It can happen over this week. Momentum is quite strong, we’re not that far away from the zero line.”



Meanwhile, the recently dovish Fed is now seen as the catalyst for the next leg higher in stocks: “with global growth moderating, the Fed will be more gradual in its approach to raising interest rates,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital. “That’s going to help boost equities, particularly in emerging markets.” And to think just a week ago it was the hawkish Fed that was boosting equities.

Others disagreed: “markets are generally struggling to find a direction at a time when economic data is not bad, but it’s not great either,” said Michael Hewson, a market analyst at CMC Markets in London. “Ultimately, the global outlook remains pretty weak. The World Bank did not just cut the forecast, it suggested that the risks were tilted to the downside. Now we are getting a little bit of profit taking.”

Judging by futures at session highs as of the moment, the algos don't really care about the economic data. In fact, global stocks are trading near their highest levels of 2016, having rallied since February as commodities recovered from a quarter-century low to enter into a bull market this week. Government bonds, corporate credit, gold and emerging markets are also rallying, indicating that investors aren’t deterred by a deteriorating U.S. labor market or a cut by the World Bank on its forecast for global growth this year. Central bank stimulus helps explain the moves, with traders adding to bets this week that the Federal Reserve will keep interest rates lower for longer.

“Following the payrolls, clearly the expectations for rate hikes have been scaled back and it gives investors more room to look for more carry,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “Given the weak payrolls and that Fed hikes are probably not going to come this summer -- maybe in September but at least for the next couple of months it seems less likely -- that’s clearly supporting demand for bonds.”

For now, however, the trade is simple: with the ECB backstopping bond purchases, traders are shifting up and down on the balance sheet, and this morning continue to aggressively buying everything from bonds, to commodities, and most certainly, to stocks.

Market Wrap
  • S&P 500 futures up 0.1% to 2113
  • Stoxx 600 down 0.4% to 345
  • FTSE 100 down less than 0.1% to 6283
  • DAX down 0.5% to 10239
  • German 10Yr yield unchanged at 0.05%
  • Italian 10Yr yield down 3bps to 1.39%
  • Spanish 10Yr yield down 4bps to 1.42%
  • S&P GSCI Index up 0.7% to 385.2
  • MSCI Asia Pacific up 0.5% to 132
  • Nikkei 225 up 0.9% to 16831
  • Hang Seng down 0.1% to 21298
  • Shanghai Composite down 0.3% to 2927
  • S&P/ASX 200 down less than 0.1% to 5370
  • US 10-yr yield down 1bp to 1.71%
  • Dollar Index down 0.07% to 93.77
  • WTI Crude futures up 0.7% to $50.71
  • Brent Futures up 0.9% to $51.90
  • Gold spot up 0.7% to $1,253
  • Silver spot up 2.1% to $16.73
Top Global News
  • Yahoo Offering More Than 3,000 Patents Amid Strategic Reviews: Intellectual property covers search, ads, cloud technology, co. to keep more than 1,000 patents for its core business
  • Clinton Claims Historic Victory as Battle With Trump Opens: Declared herself the victor in the Democratic nominating race
  • VeriFone Cuts Year Adj. EPS, Rev. Views; Shares Fall 23%: Sees FY2016 adj. EPS $1.85, saw $2.21-$2.24 (March 10); sees FY2016 adj. net rev. $2.1b, saw $2.15b-$2.17b
  • Ingenico Leads Payment Companies’ Drop After VeriFone Warns
  • Valeant Walks Knife’s Edge of Debt Limits With Forecast Cut: New Ebitda projects are close to limit of debt agreements; files 10-Q report, avoiding nearest risk of default
  • Ex-LendingClub CEO Laplanche Has Explored Takeover, Reuters Says: Founder said to approach buyout funds, banks on financing
  • Blackstone Said to Be in Advanced Talks to Buy Acrisure: Reuters: Deal could value Acrisure at over $2b incl. debt, Reuters reports, citing unidentified people familiar
  • Hiring Plans Axed Amid Election-Year Uncertainty, U.S. CFOs Say: Almost half of U.S. financial chiefs report pullback in plans
  • Alstom, GE Accused of Decade-Old Bribes by Ex-Petrobras Official: GE denies wrongdoing; Alstom said no longer in energy business
  • IEA Cuts Gas Demand Outlook Again as Glut Seen to End of Decade: Gas use in power generation slows, especially in U.S.
  • Amazon Targets India Growth With $3 Billion Investment Boost: Company employs 45,000 in India, sees ‘huge potential’
  • Musk: Tesla Working Exclusively With Panasonic on Model 3 Cells
  • Gannett May Sweeten $15/Shr Bid for Tribune Publishing: NYP: May only sweeten bid if it looks like it would help close deal, NYP reports, citing unidentified person familiar
  • Youtube CEO Sees Snapchat, Facebook, Netflix as Main Rivals: WSJ
  • GM Canada to Hire Up to 1k Engineers in R&D Push: Globe & Mail
Looking at regional markets, we start in Asia where the Shanghai Composite Index slipped 0.3% while the Hang Seng China Enterprises Index in Hong Kong gained 0.3 percent. Mainland markets will be closed for holidays for the rest of the week, while Hong Kong’s will shut on Thursday. The MSCI Asia Pacific Index rose 0.5 percent, having been 0.1 percent lower before the Chinese trade figures were released. Japan’s Topix and South Korea’s Kospi advanced 0.8 percent, with the latter capping its highest close since November. Japan’s 20-year bonds advanced, pushing their yield as low as 0.205 percent. South Korean bonds rose on a plan to create an 11 trillion won ($9.5 billion) fund to bolster finances at state lenders. The yield on 10-year sovereign securities dropped two basis points to 1.72 percent.

Top Asia News
  • China Exports Stabilize as Imports Hint at Improving Demand: Trade figures look better in yuan terms as currency weakens
  • China May Retail Auto Sales Rise 11.4% on Year: China’s retail auto sales in May rose to 1.76m units, Passenger Car Association says
  • Yuan Fixing Is Back in Focus as Declines Deepen Against Peers: Central bank surprises traders with reference rate this week
  • Japan’s Biggest Bank Considers Exit as Primary JGB Dealer: Move poses questions over BOJ’s negative-rate policy, Iwashita says
  • Apple Raises $1.4 Billion in Taiwan on Larger Insurer Appetite: Canada’s Manulife also sells $1b of bonds in Taiwan
  • Nissan, Takata Face Criminal Complaint on Japan Air-Bag Rupture: Cos. said they were cooperating with investigation
  • 1MDB Defends Liquidity Position After Moody’s Removes Rating: Malaysian fund defaulted on debt in April amid dispute
  • StanChart Said to Mull Asia Non-Life Insurance Distribution Deal: Considering inviting bids from insurers to distribute their non-life products through its hundreds of branches and outlets in Asia, according to people with knowledge of matter
In Europe, the Stoxx Europe 600 Index was an outlier as it retreated 0.5%. Roche Holding AG and Novartis AG were the biggest drags, down at least 1 percent. Travel-and-leisure companies and banks posted the biggest declines of the 19 industry groups on the equity gauge. Erste Group Bank AG lost 3 percent after one of its holders sold a stake in the Austrian lender. Miners bucked the trend, with Glencore Plc leading industry gains as commodity prices advanced. Engie added 2.3 percent after the ECB was said to have purchased 3 million euros ($3.4 million) of the French utility company’s debt. German power producers EON SE and RWE AG also climbed. The ECB made its first purchases of corporate debt, including notes issued by Telefonica SA, power company Engie SA and insurer Assicurazioni Generali SpA, according to people familiar with the matter. The central bank is buying non-bank company debt in euros as part of efforts to revive investment and inflation in the region. Its program has helped drive average yields on investment-grade corporate debt in the single currency to below 1 percent, the lowest in more than a year, according to Bank of America Merrill Lynch index data.

Top European News
  • Draghi Fires Starting Gun on Corporate Bond Purchases in Europe: ECB started buying corporate bonds on Wednesday, according to people familiar with the matter; Engie, Telefonica, Generali bonds among those bought by ECB
  • U.K. Industrial Output Has Biggest Monthly Gain Since 2012: Output rose 2% from March, when it gained 0.3%, economists in a Bloomberg survey had predicted no change
  • Fiat Said in Talks With Uber as Marchionne Seeks Tech Ventures: Cos. said to consider partnership on driverless cars
  • Daimler Trucks Widens Global Parts Sharing to Bolster Earnings: Aims to boost future earnings with a plan to cut costs by sharing engines, axles and other components across units in North America, Europe and Asia
  • Sainsbury Sales Beat Estimates as Price Cuts Stem Decline: Cut prices permanently to stem a loss of customers to cheaper competitors
  • Europe’s Political Anguish Spreads From Spanish to Italian Bonds: Spread between two countries narrows to least since Dec.
  • Brexit TV Special Sees Cameron, Farage Push Core Messages
In FX, the Bloomberg Dollar Spot Index fell 0.1 percent as the yen strengthened 0.3 percent, buoyed by a government report showing Japan’s economy grew faster last quarter than was initially estimated. The won strengthened 0.5 percent versus the greenback, after a 1.8 percent surge on Tuesday that marked its biggest jump in six years, while Taiwan’s dollar appreciated 0.3 percent. The countries count China as their No. 1 export market. The MSCI Emerging Markets Currency Index advanced 0.3 percent, poised for the highest close since May 3. Poland’s zloty strengthened 0.2 percent against the euro as the central bank left monetary policy unchanged in Governor Marek Belka’s last meeting before his term ends this month. Gross domestic product expanded by an annualized 1.9 percent, more than a preliminary reading of 1.7 percent.

In commodities, the Bloomberg Commodity Index rose another 0.7% to the highest since October, after entering a bull market on Monday. West Texas Intermediate crude climbed as much as 0.9 percent to $50.81 a barrel. U.S. stockpiles are estimated to have fallen for a third week, a Bloomberg survey showed before official data on Wednesday. Oil has surged about 90 percent from a 12-year low in February amid unexpected disruptions and a continuous slide in U.S. output, which is under pressure from the Organization of Petroleum Exporting Countries’ policy of pumping without limits. Aluminum rose 2.1 percent on the London Metal Exchange, with zinc, nickel and lead also climbing more than 1 percent. Gold added 0.7 percent, advancing for the third time in four days.

Looking at today's US calendar, the main release is the JOLTS job opening report for April .

Bulletin Headline Summary From Bloomberg
  • Bonds rose with commodities and emerging markets on speculation that central banks will persist with policies that support financial markets
  • Treasury 10-year notes are in the highest demand in half a century by one measure as investors prepared to bid at a $20 billion sale of the securities today
  • Germany’s 10-year bond yields, already at a record-low, are likely to test zero as soon as this week, according to the top-ranked primary dealer of the nation’s debt
  • Mitsubishi UFJ Financial Group Inc. may quit as one of the 22 primary dealers that underwrite auctions of the nation’s bonds; the bank’s President Nobuyuki Hirano has been among the most vocal critics of the negative-rate policy
  • The European Central Bank entered a new phase in its efforts to stimulate the flagging euro region’s economy, plunging into the corporate bond market for the first time
  • Greek bonds will soon become eligible for the European Central Bank’s asset-purchase program, paving the way for an easing of capital controls, and the gradual recovery of investor confidence, Finance Minister Euclid Tsakalotos said
  • U.K. industrial production posted its biggest monthly gain in almost four years in April as manufacturing surged. Output rose 2% from March, when it gained 0.3%
  • Hillary Clinton declared herself the victor in the Democratic nominating race and
US Event Calendar
  • 7am: MBA Mortgage Applications, June 3 (prior -4.1%)
  • 10am: JOLTS Job Openings, April, est. 5.675m (prior 5.757m)
  • 10:30am: DOE Energy Inventories
DB's Jim Reid Concludes the Overnight Wrap

Markets continue to react reasonably well to Friday's weak payrolls and Yellen's relatively dovish tone on Monday night. It remains an odd one though as markets recovered their poise in May after the Fed minutes were more hawkish than expected thus repricing the front end and signalling a summer hike. The narrative was that markets welcomed the confidence the Fed had in the economy. However now we've gone back almost full circle markets seem to be happy there is no imminent rate rise. It's not clear which is the correct interpretation but can both be right? I suppose it boils down to the fact that rate rises can be absorbed if the data is firm and expected to stay that way but less so if data is still ambiguous. For now we're back in the 'ambiguous but not awful but with no imminent rate rise' channel.

Employment numbers are going to be closely watched for a break out from this channel and today brings the monthly JOLTS report - a firm Yellen favourite. As our US economists point out, the data that goes into the JOLTS report are derived from the Establishment Survey which is also used to construct nonfarm payrolls. However it’s worth noting that JOLTS is released with a one-month lag, meaning today’s report corresponds to April. Given the downward revision to the April payrolls report (-37k to 123k) as well as a similar revision lower in March, they expect to see mild deterioration in the three series within the JOLTS that the Fed is focused on, namely the job openings, hirings and quits rates. They also note that the diffusion index of private payrolls has declined meaningfully over the past three months. Our colleagues highlight that the percentage of industries hiring over the three months ending in May (53.2%) fell to the lowest level since March 2010 (47.5%) when the economy was just emerging from recession. With this coinciding with the recent weakness in payrolls growth, a soft number today would be more food for thought for the Fed.

Changing tact now and switching straight over to Asia where there have been a couple of important data releases this morning. In China the trade numbers for May have been released a short time ago. The numbers make for slightly disappointing reading however. In USD terms exports have weakened further during the month to -4.1% yoy (vs. -4.0% expected) from -1.8% in April. Meanwhile, imports have declined -0.4% yoy but that’s a lot less than what was expected (-6.8%) and also relative to April (-10.9%). The end result is a trade surplus of $50bn which is about $4.5bn higher than that of April. There was a similar trend for the numbers in CNY terms. Chinese equity markets were already lower prior to the data and have held onto those losses as we go to print. The Shanghai Comp is currently -0.44%.

Meanwhile we’ve also had some data out of Japan where the final Q1 GDP report was revised up one-tenth as expected to +0.5% qoq, or a quarterly annualized rate of +1.9%. Our economists in Japan note that we should treat the data with caution given the potential overestimate due to the leap-year effect.

The Yen was immediately stronger post the data but has pared back a little now, although is still +0.2% firmer as we type. It’s been alot more volatile for Japanese equity markets however where the Nikkei was down as much as -0.50% post the release, only to now have jumped to a +0.55% as we type. Elsewhere, the Hang Seng is -0.33% while the Kospi and ASX are little changed. It’s hard to gauge how much of an effect, if at all, the new World Bank forecasts released late last night have had. The Bank cut its forecast for global growth this year to 2.4% from the initial 2.9% estimate made in January, with growth for 2017 sketched in as 2.7%.

Moving on. Our latest Credit Bite should have hit your inbox yesterday at around 9pm London time. It is called “Nykredit Bite – The First Tier 3 Bond”. The Danish mortgage provider Nykredit has issued a new type of bond that ranks between senior unsecured and subordinated Tier 2 bonds, hence Tier 3, which the authorities can write down or convert to equity in resolution. Eventually, the latest regulatory requirements on loss absorbency are likely to give rise to a new asset class: Tier 3 bonds of European banks. Please see the note for more details.

Staying with credit, today sees the start of DB's 20th European Leverage Finance conference which is a huge two day event. I'll be around for most of it so if you're about please say hello. I'm kicking off day 2 tomorrow over breakfast so please come along to that. Ahead of the conference yesterday we published our latest Euro HY strategy monthly which takes stock of the market (fundamentals, technicals and valuations) ahead of a busy June. Overall valuations look OK but given the EUR HY index has rallied more than 7.5% from the February lows they are not as attractive as they have been. We remain comfortable with our year-end forecasts (tighter) for now but at some point late cycle will turn into a recession so we have to be vigilant. We still think it's more a 2017 story but the recent payrolls report raises some risks.

Back to markets. As we highlighted earlier the relatively positive performance post-payrolls continued again yesterday. Despite a late slip into the close, the S&P 500 (+0.13%) still closed a touch higher on the day and in the process is creeping closer and closer to breaking that all time record high in the index set in May last year. Markets in Europe had actually closed with more impressive gains earlier in the day (Stoxx 600 +1.12%) with some of the data there helping. It was another decent performance for Oil however which fuelled much of the positive sentiment. Indeed WTI was up +1.35% yesterday and in doing so closed above $50/bbl (at $50.36/bbl) for the first time since July last year. That means it’s now up a fairly remarkable 93% from the intraday February lows with the recent supply disruptions in Nigeria still seemingly driving the recent support.

Also helping is a slightly softer US Dollar despite the post payrolls weakening for the Greenback starting to show signs of fatigue. Some of the more eye catching moves yesterday though came in rates markets and particularly in Europe. Most notable of the bunch was the move in the 10y Bund with the yield closing 3.6bps lower on the day at 0.048% - a new all time record low. With the ‘umlaufrendite’ already in negative territory at -0.01%, the move yesterday for the 10y means it is one step closer to joining Switzerland and Japan in the negative 10y yield camp. There’s still some way to go to matching that of the Swiss though with yields there in negative territory up until the 21y maturity. Remarkable. Bloomberg in fact reported yesterday that 42% of bonds in its Eurozone Sovereign Bond Index have negative yields.

Meanwhile, over in credit markets price action yesterday was relatively subdued although there were plenty of headlines being generated from US HY giant Valeant. Earlier in the day the company again slashed its earnings outlook for this year (the second time it has done so) with the bonds taking another dip lower as a result. The share price also plummeted nearly 15%. Post the close though we then got the announcement from the company that it has filed its delayed 10-Q report and so actually beating a self-imposed deadline. That of course comes after creditors had sent the company notices of default due to the breach. This saga looks set to continue for some time though.

Away from this, the positive takeaway from yesterday’s data flow was largely focused in Europe. In Germany we saw industrial production for April come in a little better than expected during the month (+0.8% mom vs. +0.7% expected) which has helped lift the YoY rate to +1.2% from +0.3%. Meanwhile, the final take of the Q1 GDP report for the Euro area saw growth revised up a tenth from the initial estimate to +0.6% qoq. That has had the effect of keeping the YoY rate unchanged at +1.7%. Meanwhile across the pond yesterday the final Q1 reading for nonfarm productivity was revised up four-tenths to -0.6% qoq, while unit labour costs for the first quarter was also revised up an equal amount to +4.5% qoq. Elsewhere the IBD/TIPP economic optimism came in bang in line with expectations at 48.2, although that was disappointingly down half a point from last month. Finally credit growth was reported as $13.4bn in April (vs. $18.0bn expected) with the gain in revolving credit being the smallest in three months.

Turning to today’s calendar, it’s a reasonably quiet start to the day in Europe with the latest industrial and manufacturing production reports in the UK for April being the highlight to note. Over in the US the main release is that aforementioned JOLTS job opening report for April which we previewed earlier. Away from the data we’re due to hear from the ECB’s Nouy later this morning (11.30am BST). Of course today also marks the landmark date of the ECB kick starting buying under its inaugural corporate sector purchasing programme. It'll be interesting to see how visible they'll be.
 

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#21
David Morgan-US Debt Clock Shows Gold and Silver Way Undervalued
Greg Hunter


Published on Jun 7, 2016
Regardless of the timing, all the big players agree there is going to be another big economic crash. Financial writer David Morgan thinks the elite are fighting over how the crash is going to take place. Morgan explains, “There is infighting at the top. The central banks really don’t know what to do, and they are starting to get agitated at the top of the pyramid. . . . As things start to deteriorate more and more . . . there is an instinctive ability of the human species to preserve what they have. There is infighting at the top. These people know this isn’t working, and there may be some really interesting discussions going on behind closed doors about what they really can do. The answer is they really can’t do much.”

On the U.S debt clock showing gold being priced thousands of dollars more than it is priced in the markets, and also silver priced hundreds of dollars higher, Morgan says, “I think it is $812 silver and gold $7,300. What that is is year-over-year increases in M2 money supply and yielding production of silver and gold in ounces. Or, you could say it’s the year-over-year production in ounces . . . and it’s an arithmetic problem. It’s dollars per ounce mined. As to why they are doing this, I don’t know, but I will take a stab at it. Maybe it is to get this out in the public where few are awake and aware. It’s obviously showing the gold/silver ratio is out of whack. . . . Both silver and gold are way undervalued.”

In closing, Morgan, who is also an expert in gold and silver, says, “Real wealth is what we can physically touch, and the market is going to reprice all of that. Gold and silver are a small subset of real wealth because that is physical money. If you look at farmland, skyscrapers, all the roads, all the minerals in the ground, oil and everything else, that’s the real wealth. What you do in a bond collapse is you reprice everything.”

Join Greg Hunter as he goes One-on-One with David Morgan of The Morgan Report.

All links can be found on USAWatchdog.com: http://usawatchdog.com/dire-financial...
 

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#23

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#24
Frontrunning: June 9


by Tyler Durden - Jun 9, 2016 7:43 AM

  • European Bond Yields Hit Record Lows as Stocks Tumble (WSJ)
  • Oil prices soften on profit taking after hitting 2016 highs (Reuters)
  • Wooing Sanders supporters will be tough task for Clinton (Reuters)
  • Clinton ally Warren weighs potential VP role, sees hurdles (Reuters)
  • Rise of the Machines Fueled by Higher Asia Manufacturing Wages (WSJ)
  • Iraqi PM Abadi stakes leadership, IS campaign, on Falluja battle (Reuters)
  • San Francisco Is Bracing for Life After This Tech Bubble (BBG)
  • U.S.-backed forces tighten grip around Islamic State in Syria's Manbij (Reuters)
  • PepsiCo Weighs Another Fix to Diet Pepsi (WSJ)
  • Draghi Says Economic Cost of Reform Delay Too High to Ignore (BBG)
  • Saudi Property Stocks Named in Kingdom’s Post-Oil Plans Soar (BBG)
  • Brexit Vote Looms Large for U.K.'s Car Industry (WSJ)
  • Israel Revokes Ramadan Permits for Palestinians After Tel Aviv Attack (WSJ)
  • After five lean years, gold miners gear up for growth (Reuters)
  • How a Supercomputer Is Ready to Mint Money Out of Mexico's Stock Market (BBG)
  • Hillary Clinton’s foreign policy problem (Reuters)
  • Dairy Farmers Say Trump’s Deportations Could Dry Up Milk Supply (BBG)
Overnight Media Digest

WSJ

- George Soros has returned to trading after a long hiatus, lured by opportunities to profit from what he sees as coming economic troubles. Anticipating weakness in various markets, the billionaire hedge fund founder recently directed a series of big, bearish investment, according to people close to the matter. (on.wsj.com/1WFKLvd)

- With the Democratic primary behind her, Hillary Clinton in an interview says she plans to put Republican Donald Trump's economic record and agenda at the center of her campaign. (on.wsj.com/1WFKRmE)

- Envision Healthcare Holdings Inc is in talks to merge with AmSurg Corp, a deal that would bring together two big providers of physician and other healthcare services with a combined value of more than $9 billion. (on.wsj.com/1WFL7SC)

- Uber Technologies Inc has held talks with Fiat Chrysler Automobiles NV about a potential partnership involving self-driving car technology, people familiar with the matter said. (on.wsj.com/1WFKZCx)

- Ralph Lauren's new CEO Stefan Larsson has poached Jane Hamilton Nielsen, a top executive from rival Coach Inc , to join his team. This is part of a broader management shakeup at the luxury brand, according to people familiar with the matter. (on.wsj.com/1WFLE79)

FT

Financial watchdogs from Switzerland and Britain are looking into alleged irregularities around sovereign loans to Mozambique, including a "tuna bond" arranged by Credit Suisse Group and VTB.

Britain's biggest retailer, Tesco Plc, is to sell its interests in Turkey and its Giraffe UK restaurant business, people briefed on the group's plans said.

Rolls-Royce Holdings Plc Chief Executive Warren East, writing in an update to staff, urged employees to redouble their efforts as the engineering group is running behind with deliveries to customers.

NYT

- Osamu Suzuki, the chairman of Suzuki Motor Corporation , plans to give up day-to-day control of the automaker he has led for most of the last four decades, in response to a scandal over improper fuel economy tests on cars that the company sells in Japan. (nyti.ms/1ZzMj89)

- Mayor Bill de Blasio and the City Council agreed on Wednesday on an $82.1 billion budget for New York City that adds tens of millions in new spending for initiatives, including summer jobs for youths, after-school programs and reserve funds to help the city weather an economic downturn. (nyti.ms/1VNFtNk)

- Two lawyers from a Washington law firm Williams & Connolly, James Bruton III and James Fuller III have been ordered by a Manhattan court to provide documents and testimony about conversations they had with a former Morgan Stanley banker and oil investor Morris Zukerman. The lawyers were defending Zukerman who was accused of failing to pay $45 million in income and sales taxes. (nyti.ms/24BvQkY)

- Guy Hands, the founder of private equity firm Terra Firma Capital Partners, denied in court on Wednesday that he had made up conversations he claimed he had with senior executives at Citigroup ahead of a disastrous deal to buy EMI in 2007. (nyti.ms/1WFMYXv)

Britain

The Times

- WPP Plc Chief Martin Sorrell struck a defiant tone over his 70.4 million pounds ($102.16 million) pay package yesterday after more than a third of shareholders voted against WPP's remuneration policy at its annual meeting. (bit.ly/1UoYmkx)

- CMC Markets Plc, which has 57,000 active clients worldwide, said that it might insist on larger-than-normal margins - effectively upfront cash - as well as putting ceilings on positions. (bit.ly/1UoYNez)

The Guardian

- David Cameron has lambasted Sports Direct International Plc's "appalling practices" following the admission by the company's founder that workers have been paid less than the minimum wage. (bit.ly/1UoYqkq)

- British industrial production grew by 2.3 percent in April, the fastest pace in almost four years, boosted by the pharmaceuticals and energy sectors. (bit.ly/1UoZCnN)

The Telegraph

- BHS was "held to ransom" by Philip Green and the Pensions Regulator, Dominic Chappell, the former owner of the company claimed, as he battled to deflect attention from his role in the demise of the 88-year-old retailer. (bit.ly/1UoZdSp)

- Sales at J Sainsbury Plc's have fallen as "challenging" conditions persist in the grocery market and food price deflation took its toll. Same store sales, which exclude new store space, dipped 0.8 percent in the three months, or 1 percent including the effects of fuel. (bit.ly/1UoZdBM)

Sky News

- Marc Bolland, the former chief executive of Marks & Spencer Group Plc, was awarded a bonus of more than 600,000 pounds last year, the high street retailer is set to disclose on Thursday. (bit.ly/1UoZjJG)

- Citigroup Inc has warned staff that Brexit would mean "rebalancing" its operations away from Britain. Chief country officer for the UK, James Bardrick told Citi's workforce that a vote to leave the EU "is likely to have implications for our UK operations". (bit.ly/1UoYRep)

The Independent

- Investors will be able to buy 100 gram (0.22 lb) and 1 kilogram gold bars from the Royal Mint, as part of a service that allows customers to own a fractional amount of a gold bar, to be held as a pension scheme. (ind.pn/1UoZu7K)

- Yildiz Holding is launching a new global confectionery and biscuits company to create a food industry giant worth $5.2 billion, with plans to float it on the London Stock Exchange by 2020. (ind.pn/1Up0tVo)

http://www.zerohedge.com/news/2016-06-09/frontrunning-june-9
 

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#25
Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows


by Tyler Durden - Jun 9, 2016 6:54 AM

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloomberg explains, "traders assessed the outlook for the global economy." It is unclear if that means that the outlook is suddenly much brighter. After all, it was last Friday's recessionary payrolls that sent the S&P soaring to just shy of all time highs, so in this bizarro, centrally-planned "market", we need more clarification.

The global stocks gauge fell 0.4%, led by telecom and materials shares. The Stoxx Europe 600 Index dropped 1 percent, heading for its biggest slide since May 23. S&P 500 futures expiring this month retreated 0.4%. Markets in China and Hong Kong were closed today, It also appears the algos have gotten tired of first creating then chasing oil momentum because after hitting almost record overbought levels, oil finally fell and the Bloomberg Commodity Index erased earlier gains, putting it on track for the first decline in seven days after earlier advancing as much as 0.4%.



WTI dipped back under $51 following yesterday's late day algo-driven buying scramble, down 0.9% to $50.78, while Brent dropped 0.3% to $52.34 a barrel.

However, while "risk" assets such as stocks and commodities dipped, bonds rose, with U.K. gilt and German Bunds yields declining to a record low and a Japan 5 year auction pricing at a fresh average record low yield overnight. New Zealand’s currency jumped after the central bank refrained from cutting borrowing costs.

Some more humor: this is what Bloomberg has to say: "Global economic optimism has cooled because of weak U.S. jobs data, a lower growth forecast from the World Bank and the U.K.’s looming referendum on quitting the European Union. Central banks are still pursuing accommodative policies, with the European Central Bank buying corporate bonds for a second day and the Bank of Korea unexpectedly cutting rates." Oh so it took traders 5 days to spot the "weak US jobs data" and 2 days to finally read the article on the growth forecast cut? Golf clap.

And now some even more fantastic quotes: “Growth still doesn’t look brilliant,” said Peter Dixon, global equities economist at Commerzbank AG in London. “The kind of rally we’ve had in the past few days across most assets doesn’t tend to last very long.” Oh but it can Peter - after all, all it takes is a bunch of lunatic central bankers who are left with nothing to lose and intent on blowing the biggest bubble in history, to keep doing what they do so well (for the full slamdown, read DB's response). Here, James gets it: “Monetary policy remains accommodative globally and expectations for a rate hike in the U.S. have been pushed back,” James Woods, an analyst at Rivkin Securities in Sydney, said by phone. “That should be supportive of equities.” That's right James: bad news for millions of US workers - for the 8th year in a row - is great news!

The dollar hit a five-week low against the yen, hurt by falling Treasury yields amid waning expectations that the Federal Reserve will lift interest rates anytime soon. Those expectations saw German 10-year Bund yields hit a low of 0.034 percent, not far from negative territory in which $10 trillions worth of bonds globally already trade at.

Market Snapshot

  • S&P 500 futures down 0.4% to 2101
  • Stoxx 600 down 0.8% to 342
  • FTSE 100 down 0.8% to 6251
  • DAX down 1.2% to 10099
  • S&P GSCI Index down 0.2% to 388.9
  • MSCI Asia Pacific down 0.6% to 132
  • Nikkei 225 down 1% to 16668
  • S&P/ASX 200 down 0.1% to 5362
  • US 10-yr yield down 3bps to 1.68%
  • German 10Yr yield down less than 1bp to 0.05%
  • Italian 10Yr yield down 1bp to 1.38%
  • Spanish 10Yr yield down 2bps to 1.41%
  • Dollar Index up 0.21% to 93.79
  • WTI Crude futures down 0.4% to $51.01
  • Brent Futures down 0.7% to $52.14
  • Gold spot down 0.3% to $1,259
  • Silver spot up less than 0.1% to $17.06
Top Global News

  • Soros Said to Return to Hands-On Trading, Sees Market Shifts: Has been spending more time in the office directing trades and recently oversaw a series of big, bearish investments
  • China’s Factory-Gate Deflation Eases in Capacity-Cut Drive: May producer price index fell 2.8%, least since late 2014
  • UBS to Cut Managers at U.S. Wealth Unit, Recruit Fewer Advisers: Headcount reduction will mostly hit middle and senior managers, including some at main offices in New Jersey, New York
  • Twitter Confident Systems Not Breached By Hackers: Techcrunch: Co. confident that “our systems have not been breached,” TechCrunch says citing a spokesperson responding to reports that >32m Twitter login credentials have been leaked; Ross Hoffman to Run Twitter Media Team: Recode
  • Blackstone Said to Have $200 Million Profit in Hawaii Deal: Hyatt Waikiki Beach resort to sell to Mirae for $780m
  • DOJ Asks Supreme Court to Overturn Apple Patent Ruling: Reuters: DOJ asked the Supreme Court to send Apple, Samsung’s smartphone patent case to trial court for more litigation
  • Ralph Lauren Said to Hire Coach’s Jane Nielsen as CFO: WSJ; Coach CFO Nielsen to Leave Co. to Pursue Another Opportunity
  • Avaya Said to Meet Creditors as It Wrangles $6 Billion Debt Load: Discussions will put co. face-to-face with a group of lenders including Blackstone Group and Apollo Global Management
  • Samsung May Supply Batteries to Tesla Energy, CEO Musk Says: Unit provides electricity storage for homes, businesses
  • Solar Makes Up Most of New U.S. Power Capacity for First Time: Solar accounted for 64% of new capacity, wind added 33%
  • Puerto Rico Bill Faces House Vote Despite Uncertain GOP Support: Republicans will likely need robust support from Democrats to pass the measure
  • Caesars Judge Says He May Not Be Able to Halt Creditor Suits: Casino giant asking for freeze on cases in Delaware, New York
Asia equity markets shrugged off the positive US close and traded cautious with a lack of demand amid several market closures in the region. Nikkei 225 (-1.0%) underperformed on a firmer JPY and weaker than expected Machine Orders in which the M/M figure contracted the most since May 2014. ASX 200 (-0.2%) also suffered from broad-based weakness, although commodity strength stemmed losses after oil prices extended its gains following the DoE inventory drawdown. Elsewhere, the KOSPI (-0.1%) was initially supported following an unexpected 25bps rate cut by the BoK but then conformed to the downbeat sentiment, while mainland Chinese and Hong Kong markets were closed for holiday. 10yr JGBs traded marginally higher amid the risk-averse tone, while the 5yr auction saw the highest b/c since 2014, a narrower tail in price and the lowest accepted price surpassing estimates.

Top Asian News

  • Korea Unexpectedly Cuts Rate to Support Debt Restructuring: Only one of 18 economists in survey correctly picked move
  • Korea Bond Yields Drop to Records as BOK Signals Worst Not Over: BOK Governor Lee Ju Yeol says S. Korea seems to be getting closer to lower rate limit
  • RBNZ Keeps Key Rate at 2.25% as Inflation, Housing Pick Up: Governor Wheeler says further easing may still be needed
  • Tencent Said to Weigh Supercell Deal at $9 Billion Valuation: SoftBank is selling assets to strengthen balance sheet
European shares fell for a second straight day, with a drop in Vodafone weighing on the telecom sector and Essentra hit by a profit warning. Risk-off tone dictates the state of play in Europe with the Euro Stoxx (-1.1%) seeing heavy losses this morning amid the softness across the commodity complex with WTI crude edging towards USD 51.00bbl . Additionally, the DAX has been one of the underperformers led by utility giant EON (-6.8%) as they go Ex Div. As such, this has underpinned the gains in Bunds, while the 30yr outperforms on the back of duration buying with the yield curve continuing to bull flatten amid the front end lagging with oil prices hovering near 8-monh highs.

Top European News

  • ECB Said to Buy Volkswagen Securities in Second Day of Purchases: Purchases included securities issued by Volkswagen, Continental and Orange, according to a person familiar
  • Draghi Says Economic Cost of Delaying Reforms Too High to Ignore: Called on politicians to help the ECB’s bid to restore economic health to the region by accelerating reforms, comments in speech at Brussels economic forum
  • U.K. House Prices Predicted to Drop for First Time Since 2012: RICS survey shows London home prices already falling in May
  • Dong Valued at $15 Billion Joins List of European IPO Giants: Share sale raises gross proceeds of DKK17.1b
  • Aspen to Buy Anaesthetics From AstraZeneca for $520 Million: Will also pay AstraZeneca royalties and as much as $250m in additional sales-based installments over the next two years
  • Glencore Sells Agri Stake to Canadian Fund for $625 Million: British Columbia Investment Management Corp buys 9.99% stake
  • Telefonica Said to Seek Sale of Argentine TV Broadcaster Telefe: Disposing of non-core assets under new chairman
In FX, the Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, gained 0.3 percent, snapping a two-day drop. The U.S currency strengthened 0.4 percent to $1.1347 per euro and was 0.5 percent weaker against the yen. The kiwi soared as much as 2 percent to 71.48 U.S. cents, its strongest level in about a year, after the Reserve Bank of New Zealand refrained from cutting rates and said it expects inflation to accelerate. Risk sentiment has been driving FX this morning, with USD/JPY driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now Nevertheless, AUD, CAD and GBP have suffered a little in line with this, while NZD has had some of the shine taken off the post RBNZ rally. The EUR/USD slipped back into the mid 1.1300's. In the GBP, more data proving the UK economy is holding up despite the uncertainty over the Brexit vote in 2 weeks, as the trade deficit narrowed on the month, whilst also exceeding expectations. GBP lower nevertheless, with Cable now in the mid 1.4400's. Losses proving hard fought though, but this is largely down to lower participation. Another day of slim pickings for US data, with only weekly claims and wholesale inventories to look to, but Wall Street now key for the JPY pairs after the price action see this morning.

In Commodities, WTI and Brent have traded in negative territory in the EU session and this comes in tandem with broad based weakness across the commodities sector with Gold USD 1252.10/oz down 0.37% in EU trade. U.S. crude oil fell 0.9 percent to $50.78 a barrel after hitting a 11-month high of $51.67 a barrel. Brent crude rose as high as $52.86 a barrel, highest since October 2015, but was last trading lower at $52.23 a barrel. Spot gold dropped after hitting a three-week high of $1,266.01 an ounce, while aluminium fell 1 percent after climbing to a one-month high of $1,614.50 a tonne. Copper also fell. "I think gold is going to stay range bound until we see more confirmation. We need more confirmation from labour market data in the U.S. that we get in a month from now. The market wants to see at least two data points," said Dominic Schnider of UBS Wealth Management in Hong Kong. Silver is also down 0.75%. This morning base metals have been quiet as Chinese markets are closed but copper has edged higher rising 0.7% and an average gain across the board of 1.2%, today's volumes have been light with 2,597 lots traded.

Looking at today’s calendar, it’ll be interesting to see how last week’s initial jobless claims data comes in (270k expected) in light of the weak payrolls report. Later on this afternoon we’ve also got the April wholesale trade sales and inventories report. Away from the data we’ve got the ECB’s Draghi due to speak at 8am BST this morning where he opens the Brussels Economic Forum so it’ll be worth seeing if anything of interest comes out of that.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities enter the North American crossover lower across the board with risk-averse sentiment gripping the region
  • USD/JPY has been driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now
  • Looking ahead, highlights include US Initial Jobless Claims and Wholesale Inventories
  • Treasuries edge higher in overnight trading, global equities and commodities sell off; auctions conclude with $12b 30Y bonds, WI 2.49%, last sold at 2.615% in May, extended a pattern of tails by 30Y refundings.
  • South Korea’s central bank unexpectedly cut the benchmark interest rate to a new record low Thursday, citing growing risks to the economy including slowing global trade and the government’s push to restructure indebted companies
  • The European Central Bank bought corporate bonds in euros for a second day as it expanded its stimulus program for the region’s flagging economy; The bank’s entry into the corporate bond market included buying bonds with junk ratings and saw purchases of notes from troubled German carmaker Volkswagen AG
  • Billionaire investor George Soros has become more involved in trading at his family office, concerned about the outlook for the global economy and the risk that large market shifts may be at hand, according to a person familiar with the matter
  • “Everything is being driven by high liquidity that ultimately is being provided by central banks,” Simon Quijano-Evans, chief emerging-market strategist at Commerzbank AG, Germany’s second-largest lender, said in London
  • UBS Group AG, which said last month it’s looking for ways to cut costs, is eliminating some management positions in its U.S. wealth unit and reducing the number of financial advisers recruited from competitors
  • U.K. exports surged 9.1% in April to their highest level in almost three years as Britain shipped more to countries both inside and outside the European Union
US Event Calendar

  • 8:30am: Initial Jobless Claims, June 4, est. 270k (prior 267k)
  • 9:45am: Bloomberg Consumer Comfort, June 5
  • 10am: Wholesale Inventories m/m, April, est. 0.1% (prior 0.1%)
  • 10am: Wholesale Trade Sales m/m, April, est. 0.9 (prior 0.7%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: Bank of Canada’s Poloz holds news conference on financial system review
  • 10:30am: EIA natural-gas storage change
  • 12pm: Household Change in Net Worth, 1Q (prior $1.637t)
DB's Jim Reid concludes the overnight wrap

The post-payrolls and post-Yellen slow grind higher continues for US equity markets with the S&P 500 continuing to edge to within touching distance of that record high. Yesterday it closed up +0.33% and it means we’ve not had a swing of greater than 0.50% either way for the index since May 25th. A fourth consecutive weaker day for the US Dollar seemed to be the trigger with little other newsflow for markets to really feed off. European equity markets had actually edged lower (Stoxx 600 -0.49%) earlier on following a big two-day rally as peripheral banks came under pressure again while those moves in the Bund market were also closely watched. 10y Bund yields actually touched an intraday low of 0.032% only to give up those gains into the close to finish more or less unchanged around 0.053%.

Meanwhile, much of the chatter yesterday was on how much of an impact the start of the ECB corporate sector purchasing program, which kicked off yesterday, would have on markets. Certainly the price action in the European CDS indices was more one of consolidation that anything else with the iTraxx Main and Crossover indices little changed on the day. All of the suggestion was that they were very much active through the secondary market as we’d expected.

Flipping over to Asia now where the latest inflation numbers have been released in China. Headline CPI has printed at -0.5% mom in May, the third straight monthly decline which has had the effect of lowering the YoY rate by three-tenths to +2.0% (vs. +2.2% expected). Another slowdown in food prices appears to have been the main driver there. On the other hand, there was a notable increase in the latest PPI print. Prices rose +0.5% mom last month which has resulted in the YoY rate increasing to -2.8% (vs. -3.2% expected) from -3.4%. Producer prices have actually edged higher for three consecutive months now.

With markets in China and Hong Kong closed today, we’ll have to wait to see what the impact there is although it’s largely a sea of red for markets elsewhere in Asia. The Nikkei (-0.91%), Kospi (-0.22%) and ASX (-0.59%) are all lower while there’s also been some action in the FX market. The Kiwi Dollar has rallied nearly 2% after the RBNZ held rates on hold again with some concern about financial stability risks stemming from the housing market being attributed. Meanwhile the Bank of Korea surprisingly cut its benchmark rate this morning by 25bps to 1.25% after expectations had been that they would stay put. The Won immediately weakened 0.7% post the move but is back to unchanged now.

Elsewhere while both US equities and credit were a smidgen stronger yesterday, Gold actually rallied a robust +1.53% while Treasuries were also well bid with the benchmark 10y yield trading down a couple of basis points to 1.703%. Oil continued its surge too with WTI (+1.73%) rallying hard for the third consecutive day to settle up above $51/bbl now. The latest EIA data showing a decline in US crude stockpiles helped, as did the concerning reports of more wildfires in Canada. Indeed two Canadian oil producers have been forced to halt production only just as output had recommenced and workers have again been evacuated in the Alberta region.

With regards to that JOLTS job openings report yesterday in the US, openings were reported as increasing to 5.79m in April (vs. 5.68m expected) from a downwardly revised 5.67m in March. That put the job opening rate at 3.9% from 3.8%, however the data also showed that the hiring rate dipped two tenths to 3.5% which is the lowest level since August 2014. Given this is one of Yellen’s most favoured series the recent spike lower is significant. Our US economists highlighted yesterday that in their view corporate profit margins may be one source of the weakness in hiring. Indeed they note that corporate profits have been down year-over-year for the last three quarters and they suggest that corporate profit margins have likely peaked in the current business cycle.

Away from this, the only other data of note was out of the UK with a surprisingly bumper industrial production report for April (+2.0% mom vs. 0.0% expected). That was the actually the largest monthly increase since 2012 and has had the effect of lifting the YoY rate to +1.6% from -0.2% in the month prior. Manufacturing production was also up a robust +2.3% mom during the month (vs. -0.1% expected).

Looking at today’s calendar, it’s another relatively quiet one with the only releases of note this morning in Europe being the April trade numbers out of Germany and the UK. Over in the US this afternoon it’ll be interesting to see how last week’s initial jobless claims data comes in (270k expected) in light of the weak payrolls report. Later on this afternoon we’ve also got the April wholesale trade sales and inventories report. Away from the data we’ve got the ECB’s Draghi due to speak at 8am BST this morning where he opens the Brussels Economic Forum so it’ll be worth seeing if anything of interest comes out of that.

http://www.zerohedge.com/news/2016-...llar-global-bond-yields-hit-fresh-record-lows
 

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#26
How Companies 'Collaborate' to Rip Off and Get Rid of Workers

by EconMatters - Jun 8, 2016 11:20 PM

By EconMatters




We occasionally cover some of the odd and weird phenomenons in the current corporate America. We are going to categorize them as Workplace NWO (NWO = New World Order). Here is the latest we've observed.

The current prevalent corporate slogan is 'team work' and problem solving, decision-making through 'collaborative effort'. On the surface, this represents a healthy evolution of workplace process, like the old saying goes 'Two brains are better than one".

However, in our previous post we noted how PIP (Performance Improvement Plan) has become a popular tool used by the new generation of less experienced managers to get rid of high performance, more experienced, 'black horse' employees who do not fit into an otherwise mediocre 'team'. In addition to PIP, there's another way to still rip the benefit, so to speak, of such employee (after all, you can't put every such employee on PIP) under the cloak of 'collaboration'.

Read: How Companies Are Using PIP to Humiliate and Get Rid of Workers

Cool, You Got A Project That Nobody Else Can Deliver

In this situation, the high performance 'black horse' employee is typically given a challenging project or task that nobody else in the 'team' is capable of delivering. The project usually requires recurring deliverable, that is, it is not something you do it one time and leave.

At first glace, this seems to demonstrate manager's confidence as well as confirmation in this employee's skills and capabilities. So this more experienced and high performance 'black horse' employee gets a moral boost and works hard on the project. The project eventually gets completed with resulting compliments even from higher-ups. A job well done and this employee gets some deserving recognition, everything seems fair and square, right? Not so fast.

Collaborate to Rip Off

As mention before, this is a recurring project. Usually, the most difficult part is to establish a sustainable and repeatable process for product creation and delivery on schedule every and each time. In a more traditional workplace, the recurring portion of the project should also fall under the initial project leader and creator (in this case, the 'black horse' employee) to continue managing the ongoing process and deliverable. However, in the 'modern' corporate workplace dominated by Gen X and millennial, nothing is done with rules based on standard moral compass any more.

Read: How Some Companies Are Scamming Job Applicants

What typically happens is that as soon as the project gets some 'credibility' and 'buzz' (mostly on the back of that 'black horse' employee), the manager goes 'let's use the collaborative approach' and distributes project ownership part and parcel to other junior and mediocre 'team members'. After all, following (an established process) is much easier than creating.

Lead a Project without Ownership

This means this 'black horse' employee is still the 'project leader' responsible and accountable for the project outcome, but does not have true project ownership any more. You might ask what is the purpose of the manager doing so? Well, for one thing, the 'black horse' employee is still the 'project leader', so he or she has to do a lot of work mopping up after other 'team members'. If anything goes wrong, which most likely will, the blame is on the project leader. Secondly, since the initial project leader has established credibility, other team members who now become part project owner are able to ride on that coat tail and may get away with inferior product delivery. A third reason is that every team member gets a bite out of the sweet successful project pie instead of the out-of-favor 'black horse' employee getting all the glory.

Read: Getting Hired Now Takes Longer

Ripoff Cycle Repeats

The story usually does not end there. There will always be another difficult project, and again it will be assigned to the 'black horse' employee and then be taken away just like so. This high-performance and hard-to-terminate employee most likely will not get much benefit on the performance review since most of his or her achievement has now morphed into the 'collaborative effort" of the team.

Everybody Loves Collaboration!

Of course, all other team members support and love how manager is looking out for their 'personal development'. What's not to like when somebody else does the heavy lifting and you get to share the credit and glory regardless how little contribution you have made? And since we are in a distorted democratic society where majority rules, this could go on forever with support and approval from seemingly everywhere. The only 'victim' is the 'black horse' employee who is constantly trying to rein in project quality control behind the scene.

But At Whose Expense?

What is very likely going to take place is that those other relatively mediocre 'team members' get noticed or even moved up in positions due to the 'contribution' and 'collaborative' work of a few high-visibility project, while the brain behind these projects will never move up or go anywhere. Eventually, this high performance, hard-to-terminate employee gets so frustrated and moves on to a new job at a different company.

'More Bang for the Buck'

Similar to PIP, this ripoff disguising as 'collaboration' is something that emerged in corporate America within the past 5-10 years, and also has become part of the standard operating procedure for the new generation of middle managers.

Both achieve the same goal - getting rid of a worker disharmonious to the 'team' but otherwise hard to terminate based on performance alone. The difference is that PIP leaves a paper trail in HR records with some legal risk, whereas 'collaborate to rip off' is much more subtle and stealthy while getting more bang for the buck, figuratively speaking, plus zero risk of a law suit.

Like a Pack of Wolves

In my view, there's is really nothing significantly unreasonable with PIP or the 'Collaborative Approach"; however, the problem lies squarely with how they are implemented by the new breed of middle managers after the Boomer generation.

The post-boomer new generation middle managers tend to have a heightened sense of self-entitlement and like to rely on standardization as a managerial skill. That is, their main goal in managing people is to have a 'group-think-and-act' team with similar degree of inexperience. So these managers will not tolerate anyone who does not fit the preferred team mode. They also tend to register low on the moral compass, and like to band together like a pack of wolves taking out 'obstacles' in the process of climbing the corporate ladder.

Short Term Win (maybe), Long Term Total Loss

I know some will argue that this is what Corporate America needs to complete in the global world against the emerging economies like China or S. Korea. I believe this is purely short-sighted and may see some short-term benefits, but in the longer term, Corporate America will lose out with these Workplace NWO.


http://www.zerohedge.com/news/2016-06-08/how-companies-collaborate-rip-and-get-rid-workers
 

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#27

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#30
Saudi's DEMANDING SILVER for PAYMENT? | Jim Willie Viewers Questions
FinanceAndLiberty.com


Published on Jun 9, 2016
VIEWERS' QUESTIONS IN THIS INTERVIEW:

0:33 - Please elaborate as much as you can as to how the Saudi's are demanding silver bullion for payment.

2:46 - What is the possibility of implementing a digital world currency instead of a gold standard?

6:54 - What do you think about what if you own gold/silver in the US will they try to confiscate and what do you think of off shore storage, specifically the Cayman Islands?

10:23 - Is there any further good insider info from either The Voice or others about what's now going on behind the scenes with Deutsche Bank?

17:44 - Why doesn't Russia encourage its citizens to buy gold and silver? In China they are advertising and facilitating the accumulation of gold and silver among its population. Had they done this when China started some years ago then many would have survived the attack in the ruble in far better shape.

22:45 - Do you honestly believe the U.S. Empire with all its power and influence is going to just simply roll over and allow gold and silver to undermine the foundation on which it stands?

27:15 - What will happen to the U.S. Dollar held internationally (i.e. Ecuador, Panama, Costa Rica) when the "Scheiss" Dollar is implemented?

36:05 - Given the banks can engineer the pricing of gold et al, why should they not also do the same for the pricing of oil - given their exposure, and the consequences to their existence if the price continues to spiral downward?

39:40 - I would like to know more about the bankruptcy of Espirito Santo Bank (BES) and Funchal International Bank (Banif), in Portugal, as well as the purchase of Funchal International Bank by Santander Totta in detriment of the Caixa Geral de Depósitos.

43:38 - We know the NSA collects everyone's data. Could you explain how they could use this information to engage in: market manipulation, insider trading, etc.

FINANCE AND LIBERTY:
SUBSCRIBE (it's FREE!) to "Finance and Liberty" for more interviews and financial insight ►http://bit.ly/Subscription-Link
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Title and video graphics by Josiah Johnson Studios ►http://JosiahJohnsonStudios.com

This interview was recorded on May 31st and June 2nd, 2016.

DISCLAIMER: The financial and political opinions expressed in this interview are those of the guest and not necessarily of "Finance and Liberty" or its staff. Opinions expressed in this video do not constitute personalized investment advice and should not be relied on for making investment decisions.
 

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#32
Predicting the Efficacy of a Coming Revolution
By: Jeff Thomas
In much of what was once called “the free world,” governments and economies are in the throes of self-destruction. Before long, we shall witness revolution in several of these countries. The revolutions may prove to be violent, or they may prove to be “soft” revolutions – major changes in the political structure. They may vary anywhere from mere changes in the rhetoric of political hopefuls, to changes in the actual structure of governments.

Unintended Consequences, Part 3: “How Do I Get Away From Negative Yields?”
By: John Rubino
The theory was pretty straightforward: push interest rates down far enough — in some cases to negative territory where borrowers actually turn a profit on their debts — and people will borrow money, spend it, and growth will ensue, with all that that implies for incumbent party election victories, banker year-end bonuses and other extremely important public policy goals.

Gold Seeker Closing Report: Gold and Silver Gain With Dollar While Stocks and Oil Slip
By: Chris Mullen, Gold-Seeker.com
Gold fell $5.01 to $1256.99 in London, but it then jumped up to as high as $1271.63 by early afternoon in New York and ended with a gain of 0.58%. Silver surged to as high as $17.325 and ended with a gain of 1.53%.
 

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#33
Frontrunning: June 10


by Tyler Durden - Jun 10, 2016 7:41 AM

  • Bund Brexit rally puts zero yield firmly in sight (Reuters)
  • Investors Shed Assets as Government-Bond Yields Hit Fresh Lows (WSJ)
  • Stocks Retreat With Oil as Record-Low Bond Yields Point to Angst (BBG)
  • Oil prices ease from 2016 highs on stronger dollar (Reuters)
  • Puerto Rico Debt Crisis Bill Passes U.S. House (WSJ)
  • U.S., Iraqi officials can't confirm report Islamic State leader Baghdadi wounded (Reuters)
  • Obama approves broader role for U.S. forces in Afghanistan (Reuters)
  • Migrant boys tell of attacks, murder in Libyan 'hell' (Reuters)
  • We will respond to entry of U.S. naval vessel into Black Sea (Reuters)
  • McConnell: Donald Trump ‘Doesn’t Know a Lot About the Issues’ (BBG)
  • Emails in Clinton probe dealt with planned drone strikes (Reuters)
  • Donald Trump’s Business Plan Left a Trail of Unpaid Bills (WSJ)
  • QuickTake Q&A: Why Puerto Rico’s Debt Became a National Issue (BBG)
  • Latest threat to online lenders: 'stacking' of multiple loans (Reuters)
  • How a 143-Year-Old Swiss Bank Took a Quick Road to Ruin in Asia (BBG)
  • Tesla’s Betting You’ll Pay $9,000 for a Software Upgrade (BBG)
Overnight Media Digest

WSJ

- The U.S. House of Representatives on Thursday approved legislation to stem Puerto Rico's escalating debt crisis, capping an unusually bipartisan course on a fraught and technically complex compromise measure, following months of internal wrangling. (http://on.wsj.com/25QbNlp)

- Twitter Inc has notified millions of users that their accounts are at risk of being taken over after a database containing nearly 33 million purported usernames and passwords for the social-blogging service was made public Wednesday. (http://on.wsj.com/25QdP4U)

- Thomas Perkins, one of the founding fathers of modern venture capital investing, died on Tuesday at the age of 84 at his home in Belvedere, California, according to the Marin County coroner's office. (http://on.wsj.com/25QdE9X)

- U.S. President Barack Obama endorsed Hillary Clinton for president, via a video released by the Clinton campaign, after Obama met with Clinton's Democratic primary rival Bernie Sanders earlier in the day. (http://on.wsj.com/25QdShj)

- U.S. auto safety investigators are reviewing reports of suspension problems in Tesla Motors Inc's Model S cars, a government spokesman said on Thursday. (http://on.wsj.com/25QcIm2)

FT

Tata Steel Ltd has pushed back to July the timetable for making a decision on the future of its UK steel operations, according to a person close to the Indian company.

Airbus Group said on Thursday it was selling its remaining stake in Dassault Aviation, ending a longstanding arrangement to warehouse shares in the maker of combat and business jets on behalf of the French government.

UK Health Secretary Jeremy Hunt asked Deloitte to advise on an overhaul of NHS Professionals, a step that could lead to a part-privatisation of the service.

Singapore wealth fund GIC is set to buy a stake in Ireland's Eir, in a deal that is expected to value the telecoms group at more than 3.3 billion euros ($3.73 billion), according to people involved in the process.

NYT

- National Amusements, the theater chain through which Sumner Redstone controls his $40 billion empire, is preparing to replace a handful of directors on the Viacom board, a move that is expected to serve as a prelude to the ouster of the company's embattled chief executive. (http://nyti.ms/1VPLuJo)

- Electric carmaker Tesla Motors is under scrutiny from federal regulators over suspension failures attributed to its biggest-selling model - along with reports that it had asked owners not to disclose the problem. (http://nyti.ms/1XJWSbw)

- German prosecutors said on Thursday that they were investigating whether a Volkswagen manager encouraged employees to destroy or remove documents last year, shortly before the Environmental Protection Agency publicly accused the carmaker of illegally manipulating emissions tests in the United States. (http://nyti.ms/1ZCTAnI)

- As part of the continuing global backlash over the popular ride-sharing service, Uber and two of its senior European executives were convicted and fined nearly $500,000 in France on Thursday for running an illegal transportation business. (http://nyti.ms/28oYDhv)

Britain

The Times

- The UK oil industry is on track to shed 120,000 jobs by the end of the year, according to a report by Oil & Gas UK, an industry lobby group. It said that the industry would support about 330,000 UK jobs this year, down from 450,000 in 2014. (http://bit.ly/1U4gENC)

- House prices fell last month at their steepest rate since the end of 2011 as uncertainty about Brexit and the introduction of a new tax on buy-to-let landlords hit the market. (http://bit.ly/1U4grtP)

The Guardian

- Philip Green's wife enjoyed a 53 million pound ($76.65 million) windfall after the sale of BHS' headquarters to Arcadia, the retail business controlled by the couple. The deal for Marylebone House in north London is likely to pose further questions for the Greens about their role in the collapse of BHS. (http://bit.ly/1U4j2E8)

- Billionaire investor George Soros has warned that a Brexit vote this month would make the breakup of the EU "almost certain". (http://bit.ly/1U4giql)

The Telegraph

- Amazon.com Inc's Amazon Fresh is to make its highly anticipated entrance into the UK grocery market in a move which threatens to damage yet further Britain's already under-pressure "Big Four" supermarkets. (http://bit.ly/1YaZ9L8)

- Permanently low interest rates are ruining investments and savings, the Organisation for Economic Co-operation and Development (OECD) has warned, undermining long-term economic growth. (http://bit.ly/1VPpMFo)

Sky News

- McColl's retail Group Plc, the publicly listed convenience store operator, is among several parties who have lodged an interest in buying the portfolio of Co-op properties. (http://bit.ly/1U4gztn)

- Members of the British Bankers' Association (BBA) are expected to endorse plans put forward last year to subsume the organisation under a new umbrella body that will represent a broader constituency of financial services firms. (http://bit.ly/1U4ho5C)

The Independent

- Vodafone Group Plc customers have been urged to check their bills immediately after thousands of customers reported errors. Martin Lewis, founder of Moneysavingexpert.com, said customers should check that their direct debit had been set up correctly and that they were on the right tariff after his website received a huge number of reports of these issues and poor customer service. (http://ind.pn/1U4hxGc)

- Argos customers who signed up for store cards could receive a refund of up to 100 pounds each after the company revealed it had wrongly charged many for late fees. Home Retail Group Plc, the company behind Argos, said it is has put aside up to 30 million pounds to correct the mistake. Affected customers will receive a letter from the retailer in the next few weeks. (http://ind.pn/1U4hBpm)


http://www.zerohedge.com/news/2016-06-10/frontrunning-june-10
 

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#34
Global Stocks Sharply Lower As Bond Yields Hit New Record Lows; Oil Slides Below $50


by Tyler Durden - Jun 10, 2016 6:48 AM


The overnight market action has so far been a repeat of yesterday's, when global bond yields relentlessly slid to fresh record lows around the globe following the launch of the ECB's corporate bond monetization program, and which unlike in recent days has been seen increasingly as a "risk off" signal, pressuring worldwide equities sharply lower. Indeed, Asia was down 1% and various European bourses flirting with a 2% drop, with US equity futures down about 0.6%, but the biggest story once again remains the collapse in yields, as 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours, with US Treasury set to follow soon. For now, all eyes are fixed on the 10Y German Bund and what time today it goes into negative territory.

One explanation for today's risk off mood is rising concerns about upcoming event catalysts: “ahead of the Fed and BOJ next week, and the vote on Brexit the week after, no one wants to take risk today,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. A better explanation is that stocks are finally paying attention to what the bond market has been screaming in recent weeks which is simple: deflation, if not stagflation. At this point lower yields will likely result in lower stock prices.

As we noted yesterday, when UK Gilt yields had slid to the lowest level in history, while 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield, the rush into bond safety is unprecedented. That took US Tsys to the lowest level since February and a lot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%. Moments ago Bunds were trading below 0.02% and appear set to cross into the negative zone at some point today unless the ECB steps in with a bout of selling, as it did last April/May.

And while in recent weeks the collapse in global yields was largely ignored by risk assets, this time caution prevails as the week draws to a close, with global stocks headed for their biggest two-day decline in a month as investors finally gird themselves for potentially seismic events this month. The MSCI All-Country World Index pared its fourth weekly advance. Bonds rose, sending yields from Japan to Germany to all-time lows, before next week’s Federal Reserve meeting and Britain’s referendum on European Union membership later in the month. Rates on investment-grade corporate debt in euros were also near lows following purchases by the European Central Bank.

The Dollar Spot Index rose for a second day, adding 0.2% after rallying 0.4% on Thursday, which in turn has pressured commodities as copper declined again and WTI slid back under $50.




According to Bloomberg, optimism that drove U.S. stocks to a 10-month high this week may have peaked before meetings by the Fed and the Bank of Japan, Britain’s vote and U.S. political conventions, all of which have the potential to roil markets. While policy makers have done what they can with stimulus to shore up economies, they’ve pushed yields lower, hurting earnings prospects for banks. European shares have fallen every day since the ECB’s corporate bond-buying program started on Wednesday.

In other words, the ECB has another policy failure on its hands, and this time it may have no choice but to buy stocks as a last ditch measure to prevent an all out rout.



“The market is looking at a very small chance of the Fed moving next week,” Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd., said by phone. “While that’s been supportive of risk assets, a delay in the Fed rate hike is also a reflection of weaker economic backdrop. Further weakness in U.S. economic data along with the potential for Brexit would be a cause for concern.”

The MSCI world index lost 0.6 percent at 10:32 a.m. in London. It reached a six-month high mid-week as the S&P 500 came within 0.6 percent of a record. The gauge of global equities is still heading for a 0.3 percent weekly advance, while the U.S. measure has climbed 0.8 percent -- both set for a fourth week of gains. Futures on the S&P 500 Index slipped 0.6 percent, following a 0.2 percent retreat in the U.S. benchmark. The index -- which remains about 1 percent away from its record high -- clawed back declines of as much as 0.5 percent Thursday as gains in utilities and telephone companies countered losses among banks and mining shares.

Market Wrap
  • S&P 500 futures down 0.6% to 2093
  • Stoxx 600 down 1.5% to 336
  • FTSE 100 down 1.4% to 6143
  • DAX down 1.8% to 9903
  • S&P GSCI Index down 0.8% to 384.8
  • MSCI Asia Pacific down 1% to 130
  • Nikkei 225 down 0.4% to 16601
  • Hang Seng down 1.2% to 21043
  • S&P/ASX 200 down 0.9% to 5313
  • US 10-yr yield down 3bps to 1.66%
  • German 10Yr yield down less than 1bp to 0.03%
  • Italian 10Yr yield up 1bp to 1.39%
  • Spanish 10Yr yield up 2bps to 1.44%
  • Dollar Index up 0.25% to 94.19
  • WTI Crude futures down 1.6% to $49.75
  • Brent Futures down 1.4% to $51.20
  • Gold spot down 0.2% to $1,267
  • Silver spot down 0.3% to $17.23
Top Global News
  • Tesla Denies Model S Defect, Effort to Discourage Report to U.S.: Issued a lengthy rebuttal to reports that the U.S. is investigating a potential safety defect involving Model S sedan suspensions, and said it hasn’t discouraged customers from reporting issues to regulators
  • Obama Endorses Clinton, a Signal to Democrats and to Sanders: President to join campaign against Trump at Wisconsin event; Warren Endorses Clinton, Saying She’ll ‘Get Into This Fight’
  • Twitter Says Some Accounts Locked After Password Disclosures: Said some of its accounts were locked to prevent potential disclosures from hacks of other websites that may have leaked login credentials on the internet
  • AT&T Said to Make 2nd Round Offer for Yahoo Assets: Reuters: Yahoo set to put together new shortlist of bidders in coming days after AT&T, Verizon made 2nd round bids, Reuters reports
  • Puerto Rico Debt-Crisis Plan Passes House in Bipartisan Vote: Senate said to plan action before July 1 bond payment deadline
  • Japan’s Line Seeking to Raise as Much as $1 Billion in IPO: Naver-owned company to list in New York and Tokyo in July
  • Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe: Received a whistle-blower complaint alleging the bank inflated the value of mortgage bonds on its books and masked losses around 2013, according to people with knowledge of the situation
  • Merck & Co. to Buy Afferent Pharmaceuticals for $500m Upfront: To acquire all outstanding stock of closely held Afferent for $500m in cash upfront
  • Ralph Lauren Hires Coach CFO as It Shakes Up Management Ranks: Nielsen’s appointment comes after CEO turnaround announcement
  • Wendy’s Says Breach Was ‘Considerably’ Bigger Than It Thought: Discovered malicious software aimed at getting customers’ payment-card information from point-of-sale systems
  • U.S. Seeks Oil-Reserve Overhaul to Ease Mandatory Drawdowns: Energy Department seeking $2 billion to overhaul oil stockpile
  • Banks Gain Ground in Push to Change Derivatives Capital Rule: Basel leverage rule said to punish banks for handling trades
  • Goldman CEO Says Fed Hike Would Be Good for Confidence: Echos: A rate increase in the U.S. would be well received by markets, CEO Lloyd Blankfein says in interview
  • PepsiCo Said to Cancel Meeting on Diet Pepsi Revival Plan: WSJ
  • American Farm Bureau Federation Favors Bayer-Monsanto Merger: HB
  • SolarCity, Arizona Public Service Talks Suspended: AZCentral
Looking at regional markets, we start in Asia which traded lower following yesterday's modest US losses thanks to the last hour USDJPY-driven ramp, and where stocks snapped a 3-day win streak. Nikkei 225 (-0.4%) and ASX 200 (-0.9%) were both pressured following the downturn in energy which saw WTI crude futures also pull back from 3 consecutive days of gains, while weakness in basic materials also led the declines in Australia. The Hang Seng (-1.2%) completed the negative picture in Asia as a lack of drivers and the closure of markets in China kept demand subdued. Finally, 10yr JGBs gained with the June futures contract printing its highest on record, while both the 10yr, 20yr and 30yr yields declined to fresh record lows amid the risk-averse sentiment and the BoJ in the market to acquire over JPY 1.2trl in government debt.

Top Asian News
  • Japan Bond Yield Falls to Record as Debt Surges Around the World: Joins a rally in U.S. and European debt on concern the outlook for the global economy is worsening
  • Korea Prosecutors Raid Lotte, Hotel Unit Offices as Probes Widen: Search of offices comes as Hotel Lotte scales back IPO
  • Ant Financial Said to Buy 20% of Hedge Fund Data Firm: Alibaba’s finance affiliate is said to pay $38m for Shanghai Suntime stake
  • Nanshan Buys Virgin Australia Stake From Air N.Z. at 18% Premium: deal subject to regulatory approval by Chinese authorities
  • Miners Cut Distressed Debt Pool by $60b as Rebound Firms: Anglo, Glencore, Freeport no longer make distressed bond list
  • Fidelity Sees Indonesia Buying Opportunity as S&P Keeps at Junk: Holdings in fund 21.7% vs 4.3% y/y
  • Singapore Losing Out to Hong Kong in Race to Be Most Competitive: stricter rules on foreign labor may explain Singapore’s slide
In Europe, this morning has started with a steep sell-off in equities with all European Bourses down in the session in tandem with the decline in oil prices. The Stoxx Europe 600 Index has been struggling for the past two weeks and slipped 1.6 percent on Friday, down for a third consecutive day for the first time since the beginning of May. All but nine of the 600 companies retreated, with banks and insurers leading the drop. Deutsche Lufthansa AG fell 4.5 percent after announcing the surprise departure of Chief Financial Officer Simone Menne. DAX is currently down -2.0% with the worst performing sector being financials. In terms of notable company news, the Sainsbury's acquisition of Home Retail is starting to take shape with Sainsbury's CFO replacing Home Retail's CEO and announcing that the takeover should be completed in Q3. Elsewhere Lufthansa shares declined 4.5% after the airline announced the surprise departure of CFO Simone Menne. In credit markets, global yields have continued to plunge with Bunds hitting fresh record lows of 0.02%, while yields in the long end have notably underperformed as participants continue to hunt for yield. Of note, Bunds hitting around 165.18 could see yields fall to around —0%.

Top European News
  • Billionaire Roekke Agrees to Buy BP’s Norwegian Unit in Oil Push: Det Norske agreed to buy BP’s Norwegian unit in a NOK10.8b ($1.3b) stock deal, to issue 135m shares at NOK80 each
  • Naspers Said to Plan Sale of Polish EBay Competitor Allegro: Morgan Stanley said to advise African tech firm on disposal, Polish e-commerce site said to be worth up to $3 billion
  • Lufthansa Shares Fall as ‘Well-Regarded’ CFO Makes Surprise Exit: Finance chief Simone Menne to leave Aug. 31 to pursue other career options
  • UniCredit Board Said to Meet on CEO Search That Could Take Weeks: Company’s succession process said to possibly take weeks
  • Zurich Insurance to Create Simpler Structure Under CEO Greco: Heads of regions to report directly to new CEO Mario Greco
  • Tesco Dumps Turkish Unit at Huge Discount to Market Value: Sale of 95.5% Kipa stake to yield proceeds of $43.4 million
  • Axel Springer Buys EMarketer, Extending U.S., Digital Push: To buy market researcher EMarketer at an enterprise value of ~$250m
  • Europe Stocks Could Plunge 24% in Brexit, Stress Study Shows: Risk-modeling firm Axioma Inc. found that stocks would take the hardest hit among asset classes when it simulated the effects of a “Leave” vote on a hypothetical portfolio
  • Brexit Debate Sees Johnson Attacked for Leadership Ambitions
In FX, the Bloomberg Dollar Spot Index rose for a second day, adding 0.2 percent after rallying 0.4 percent on Thursday. The gauge is headed for a second straight weekly decline, down 0.2 percent. The Fed decision June 15, while the BOJ convenes the following day. The MSCI Emerging Markets Currency Index dropped 0.3 percent. The regional currency gauge is still up 1.4 percent this week, the best performance in two months. Sterling headed for its second weekly decline versus the dollar before the U.K. votes on June 23 on whether to remain in the EU. Implied volatility for one-month options on the pound versus the dollar rose to 23.5 percent, the highest since January 2009, and more than double the level at the end of April. Expectations for price swings have climbed every week since the period ended April 29, the longest streak of increases since late February. Russia’s ruble fell for a second day, dropping 0.6 percent, before a central bank rate decision. While economists are split on whether policy makers will cut or leave their key rate unchanged, forward-rate agreements are signaling a reduction over three months.

In commodities, the Bloomberg Commodity Index is down for a second day, the first two-day decline since May 24. It’s still heading for a fifth weekly advance, the longest rally in more than two years.
West Texas Intermediate crude fell 1.3 percent to $49.89 a barrel, trimming its fourth weekly advance in five to 2.7 percent. U.S. inventories fell by 3.23 million barrels last week to a two-month low, the third straight drop, government data showed Wednesday. Wildfires in Canada curtailed oil-sands production, with lost output estimated at less than 1 million barrels a day. Copper for delivery in three months extended a weekly decline by 0.4 percent to $4,497 a ton after stockpiles on the London Metal Exchange posted the biggest weekly increase in more than a decade. Metal registered to the London Metal Exchange jumped 37 percent, the most in more than a decade as falling premiums for physically delivered metal and warehouse incentives saw metal diverted to locations in Singapore and South Korea.

Looking at today's US calendar, today's only releases of note will be the first take of the University of Michigan consumer sentiment reading for June where expectations are for a 0.7pt decline to 94.0, followed by the Monthly Budget Statement for May.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities trade lower ahead of the US open with softness in energy prices and weakness in financial names guiding sentiment
  • Some moderate moves in FX but all very tight/range bound as yet while, bond yields hitting record lows
  • Looking ahead, highlights include the Canadian jobs report, Uni. Of Michigan and US monthly budget statement
  • Treasuries rallied in overnight trading and global bond yields drop to record lows as concern over growth and Brexit increase risk-off sentiment. 10Y government notes in Japan, Germany and the U.K. all posted record-low yields over last 24 hours.
  • Trader expectations for price swings in the pound climbed for a sixth week to a fresh seven-year high as anxiety about a potential British exit from the European Union gripped investors
  • An influential adviser to Prime Minister Shinzo Abe said the BOJ should bolster monetary stimulus as soon as next week, but stick to its main tool of government-bond purchases for now rather than opt for a more-negative benchmark interest rates
  • The European Central Bank has pledged enough stimulus to return euro-area inflation to its goal, policy maker Bostjan Jazbec said, in a sign that officials may sit tight over the summer months
  • Spain is heading for its second election in six months on June 26 after party leaders failed to piece together a governing majority from the deadlocked parliament
  • The world’s biggest banks have argued for years that capital rules punish them for handling clients’ derivatives trades. All that lobbying is starting to pay off
* * *

US Event Calendar
  • 10am: University of Mich Consumer Sentiment, June P, est. 94 (prior 94.7)
  • 12pm: Monthly World Agriculture Supply and Demand Estimates
  • 1pm: Baker Hughes rig count
  • 2pm: Monthly Budget Statement, May, est. -$56b (prior - $84.1b)
* * *

DB's Jim Reid concludes the overnight wrap

Lower yields certainly weren’t just unique to the UK yesterday as global bond markets rallied in what was a much more risk-off day all round. Indeed 10y Treasuries closed below 1.7% at 1.688% after dropping a couple of basis points in yield. That took them to the lowest level since February and alot of the chatter is how they’ve now broken the downside of the recent tight trading range with February’s low mark of 1.659% now well within sight. Meanwhile 10y Bunds continue to set new dizzying lows. They finished a couple of basis points lower yesterday at 0.031% and touched an intraday low of 0.022% mid-way through the afternoon. Yesterday’s move actually meant Bund yields were 41% tighter on the day and is the third time in five days that yields have tightened by over 40%! Bloomberg’s global developed sovereign bond index is now yielding just 0.601%, the lowest on record after starting the year at 1.021%.

There didn’t appear to be one obvious trigger to set off the rally in bonds yesterday or safe haven trades for that matter. The decline in Chinese CPI and surprise Bank of Korea easing early on may have been partly to blame while WTI Oil (-1.31%) could have also been a factor after paring some of the big rally of late. Metals also had a rougher day with Copper and Aluminium down over 1%. Alot of the chatter was that the moves were just more reflective of position squaring as we edge another day closer to the Brexit vote with a general feel of caution clearly evident in the market at the moment. Reports surfacing out of the WSJ suggesting that George Soros has been recently buying Gold and Gold stocks perhaps helping while later on in the day we also heard Bill Gross warn that the current $10tn of negative yielding bonds is a ‘supernova that will explode one day’.

So unsurprisingly it was risk assets which lost out yesterday. European equities shed around 1% generally although losses in the US were a lot more modest by comparison. The S&P 500 finished just -0.17% lower and continues the theme that we’ve seen of late with moves either way being fairly subdued. With a number of big events still to come this month it still feels like there’s a bit of a waiting on the sideline approach at the moment.

This morning in Asia and with little else to guide markets, it looks like that risk off theme is continuing for the most part with bourses edging lower. While markets in China are still closed, the Hang Seng (-0.73%) has reopened in the red, while the Nikkei (-0.85%), Kospi (-0.49%) and ASX (-0.99%) are also down. The move lower in bond yields yesterday is also being mirrored in the JGB market where the 10y has struck a new record low of -0.152%. In fact as we type the 15y maturity of the JGB has just turned negative for the first time ever. It’s getting to the stage where these sorts of headlines are almost becoming commonplace.

Moving on. The economic data didn’t add a huge amount to the debate yesterday. Early on in Europe we saw Germany print a larger than expected trade surplus in April with exports flat MoM after the consensus had been for a decline (-0.8% expected). Meanwhile in the US we saw initial jobless claims nudge down slightly last week. Claims printed at 264k (vs. 270k expected) which is down 4k from the week prior, while the four-week average was down 7k to 270k. Elsewhere we learned that wholesale inventories rose more than expected in April (+0.6% mom vs. +0.1% expected), while trade sales (+1.0% mom vs. +1.1% expected) were more or less in line. The Atlanta Fed left their Q2 GDP forecast of 2.5% unchanged post that report.

Away from the data, there was also some focus on the comments from ECB President Draghi yesterday when he warned about the cost of delaying reforms in Europe. Draghi said that ‘we cannot avoid the fact that, over time, the inherent speed limits resulting from the euro area’s unfavourable demographics will start to bite’ and that the cost from delaying the implementation of reforms is ‘simply too high’.

Looking at today’s calendar, this morning in Europe the early focus should be on Germany shortly after we go to print with the final revision to the May CPI report (no change to the +0.3% mom expected). In France and Italy we’ll get the latest industrial production reports too. This afternoon in the US the release of note will be the first take of the University of Michigan consumer sentiment reading for June where expectations are for a 0.7pt decline to 94.0. Later on this evening we’ll get the Monthly Budget Statement for May.

Before we wrap up, first thing Monday morning will see the release of the final batch of economic indicators out of China including retail sales, industrial production and fixed asset investment, so expect that to set the tone on Monday.

http://www.zerohedge.com/news/2016-...ields-hit-new-record-lows-oil-slides-below-50
 

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#35

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#36
Asian Metals Market Update: June-10-2016
By: Chintan Karnani, Insignia Consultants
Next week is the FOMC meeting. One needs to look for signs of profit taking before the FOMC meeting. Gold needs to trade over $1272 till next Friday on a daily closing basis to restart another bull run to $1397 and $1550. In case gold does not manage to trade over $1272 till next Friday, then there will be continuous fears of quick big correction.
 

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#38
COT Gold, Silver and US Dollar Index Report - June 10, 2016
By: GoldSeek.com
COT Gold, Silver and US Dollar Index Report - June 10, 2016

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 2% and 5% on the Week
By: Chris Mullen, Gold-Seeker.com
Gold edged down to $1264.63 in Asia before it bounced back to $1276.86 at about 10AM EST and then fell back to roughly unchanged in the next 90 minutes of trade, but it then rallied back higher into the close and ended with a gain of 0.4%. Silver traded mixed and ended unchanged on the day.