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R.T.M. ~ Frontrunning ~ 27th Ed., Vol.2 ~ July 4th - 8th

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#1
Precious Metals Surge Continues, As Does Italian Bank Pain, In Holiday-Shortened Session


by Tyler Durden
Jul 4, 2016 7:12 AM

In today's US holiday-impacted session, the biggest overnight story was the dramatic surge in precious metals, which saw silver briefly soar above $21 following a Chinese short squeeze sending the metal as much as 7% higher overnight, its biggest one day gain since December 1, 2014. As we reported overnight, silver touched a two-year high and gold rallied for a fourth day after the Brexit vote spurred demand for havens. The catalyst is familiar: speculation central banks in some of the world’s leading economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union. The commodity complex helped push the Shanghai Composite higher by 1.9%, closing the SHCOMP just shy of 3,000, the highest since May.



“Investment demand for metals continue on expectations of a dovish Fed, growth worries and central bank policies putting more and more sovereign bonds into negative yields,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank A/S by e-mail. “The policies of the ECB and BOJ are already ultra loose and further stimulus could be added following the Brexit vote.”

Brent crude held above $50 a barrel as Nigerian militants threatened more supply disruptions, while nickel climbed to an eight-month high after the Philippines announced plans to audit all mining operations. Miners in the Stoxx Europe 600 Index traded at the highest level since April, while automakers and builders led the industries lower. Currencies of commodity producers Australia, Canada and New Zealand were the best performers among major peers. The Shanghai Composite Index climbed the most since May.

Meanwhile, things for European, and especially banks, have turned from bad to worse, with Italy’s FTSE MIB Index falling 0.9%, the biggest decline among western-European markets, as Banca Monte dei Paschi di Siena SpA and Banca Popolare dell’Emilia Romagna SC lost more than 3 percent. The catalyst was news that the ECB asked Monte Paschi to draw up a plan for tackling its bad-loan burden, yet another confirmation the nation’s banks are under pressure to bolster their finances. As a result European equities turned lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid.

The Stoxx 600 slipped 0.2 percent, after posting is biggest four-day rally since February. The volume of shares changing hands was about 20 percent lower than the 30-day average, with the U.S. market closed for the Independence Day holiday. S&P 500 Index futures gained 0.2 percent. The U.K.’s FTSE 100 Index was little changed. The gauge of megacaps is close to entering a bull market, boosted by a weaker pound and a rally in miners of precious metals. Fresnillo Plc and Randgold Resources Ltd. climbed more than 4 percent on Monday. The MSCI Emerging Markets Index rose 0.5 percent to the highest since April. It is up 6.1 percent in five days, the best performance for the period since March 7.

The US is closed today with all floor exchanges, the CME, CBOT, NYSE and NYMEX dark.

Market Snapshot
  • S&P 500 futures up 0.2% to 2101
  • Stoxx 600 down 0.2% to 331
  • US 10-yr yield unch at 1.44%
  • Nikkei up 0.6% to 15,776
  • SHCOMP up 1.9% to 2,989
  • Dollar Index unch at 95.73
  • FTSE down 0.1% to 6,568
  • EURUSD down 0.14% to 1 1123
  • USDJPY up 0.1% to 102.62
  • WTI Crude futures up 0.4% to $49.15
  • Brent Futures up 0.5% to $50.58
  • Gold spot up 0.7% to $1,351
  • Silver spot up 4.0% to $20.27
Looking at regional markets, Asian equity markets traded positive across the board following the biggest weekly YTD advance in the S&P 500 and Dow Jones last week. Nikkei 225 (+0.6%) shrugged off its initial weakness as JPY pared some of its strength, while ASX 200 (+0.6%) has also rebounded, led by materials after continued gains across metals in which silver rallied above the USD 21/oz level for the first time since July 2014. Elsewhere, Chinese markets conformed to the positive sentiment with the Hang Seng (+1.3%) seeing strength as it played catch up to last Friday's gains and the Shanghai Comp (+1.9%) benefiting from another firm liquidity injection. Finally, 10yr JGBs traded in negative territory amid the improvement in appetite for riskier assets, although 2yr and 20yr yields declined to fresh record lows while today's BoJ operations were for a paltry JPY 390b1n in government debt.

In Europe, equities are lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid. This comes after reports that an Italian official has denied that PM Renzi is to challenge the EU and intervene in the banking sector, as such the FTSE MIB has been the notable underperformer. Additionally, Monti Paschi (-7%) plunged to a record low after the ECB demanded that the company reduced its holding of NPLs. However, price action has been contained with volumes lighter as many participants are away for the US Independence Day holiday. While in terms of credit markets, Bunds are a touch softer with the price remaining in close proximity to the 167.00 level.

In FX, The Australian, Canadian and New Zealand dollars appreciated at least 0.3 percent, buoyed by the pickup in commodity prices. The British pound was little changed versus the dollar, after Chancellor of the Exchequer George Osborne floated the possibility of a lower corporate tax rate and before Bank of England Governor Mark Carney outlines the available macroprudential tools on Tuesday. The currency tumbled 8.1 percent in June, the most since 2008, as the U.K.’s decision to leave the EU shocked investors and triggered political upheaval in the country. Japan’s yen weakened 0.1 percent to 102.60 per dollar. It declined 0.3 percent last week as BOJ Governor Haruhiko Kuroda said more funds could be injected into the market should they be needed. The haven currency touched 99.02 in the wake of the vote for Brexit, its strongest level since 2014.

In Commodities, silver soared as much as 7 percent, its biggest intraday gain since 2014, before paring its advance to 3 percent as it traded at $20.3404 at 11:28 a.m. in London. Holdings in silver-backed exchange traded funds expanded to a record last month, and assets in gold ETFs are now at the highest since August 2013 as investors bet on a continued low-yield environment. Gold bullion rose 0.7 percent on Monday. “Brexit has created all sorts of fear and loathing across markets,” Commonwealth Bank of Australia analysts, including Tobin Gorey, wrote in a July 4 note, adding that investors are cutting back on risk. “Gold and silver, as we would expect, benefit the most from safe-haven demand flows.”

Brent crude added 0.5 percent to $50.59 a barrel. A militant group operating in Nigeria’s southern oil-producing region said it attacked five crude-pumping facilities, dealing a blow to the government’s effort to enforce a cease-fire. Nickel, which is used in the production of stainless steel, rose 3.6 percent to more than $10,000 a ton in London. It surged 5.6 percent on Friday after the Philippines announced its audit plans, threatening to curb supplies from the southeast Asian country. Less than a third of miners operating in the nation are compliant with international standards for responsible mining, according to the government. Rubber futures climbed 3.7 percent in Tokyo, buoyed by shrinking stockpiles after rains disrupted production in Thailand.

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities are lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid
  • In FX, we have seen some decent movement in the majors, led by the AUD which has recovered swiftly from the weekend gap lower on the back of the tight election results in Australia
  • Looking ahead, there are no major standouts on the data slate
US Event Calendar
  • July 4 Holiday
DB's Jim Reic conludes the overnight wrap

Welcome to Amexit Day, more latterly know as US Independence Day. Happy holidays to our friends stateside. Wherever you are you may have noticed that the EMR has been coming out a bit earlier recently. You may have thought that this was due to extra diligence and professionalism around the Brexit saga. You would be slightly correct but the truth is that it has more to do with a 'murder' of crows which is an apt name for a group of them given what they are driving me towards. Every morning at 4am we get woken by crows pecking very aggressively at our windows. After a few days of bad sleeps we researched into it and found that it is currently mating season and a period that the male crows get incredibly territorial. They think the reflection in the window is a love rival and they try to fight with it. They also produce an awful lot of waste whilst doing so. My wife who has far better hearing than me wakes immediately and curses as she's also been up with Maisie previously. She then typically wakes me to ask if I can hear it!! I usually say no I can't but I can now that you've woken me. Anyway on the advice of the internet we yesterday bought a scarecrow owl that bobs up and down in the wind and also some reflective tape that flutters and apparently scares them.

Anyway I'll let you know how that goes on Wednesday as today I'm having knee surgery so will leave the reigns fully to Craig tomorrow while I recover. The irony is that as I haven't been able to do much cardio in recent weeks, I've gone back to doing upper body weights to try to stay fit. This weekend I've started getting a minor dislocation sensation in my shoulder similar to what happened before I had shoulder surgery 3 years ago. I'm desperately hoping it doesn't develop into the same problem again. I am falling apart.

Financial markets were certainly more robust last week post Brexit than my failing body. Indeed despite the heavy declines across markets last Monday, markets roared back in style from Tuesday onwards as the focus quickly turned over to the Central Banks reaction function. In fact last week saw a number of European equity markets record their best week in a month. The Stoxx 600 (+0.72% on Friday, +3.19% over the week) had its best week since the end of May along with the DAX (+0.99%, +2.29%) while even more impressively the IBEX (+1.29%, +6.18%) had its best weekly return since October last year. Amazingly the FTSE 100 (+1.13%, +7.15%) had its best one-week gain since 2011 and you’d have to go back to 2008 to find the last time that the index recorded a better four-day gain (Tuesday-Friday). Clearly alot of that has to do with Sterling (-0.33%, -3.01%) which is hovering around 1.3285 this morning although still hasn’t quite got down to those Monday lows. Meanwhile across the pond the S&P 500 (+0.19%, +3.22%) – while enduring a slower session on Friday ahead of the long weekend – still had its best weekly gain this year.

It was much the same in credit markets too. In Europe the iTraxx Main (-5bps Friday) and Xover (-22bps Friday) closed the week just 4bps and 26bps off their pre-referendum levels on the 23rd. The peripherals were the standouts in the sovereign bond market where 10y yields in Italy, Spain and Portugal closed the week 32bps, 48bps and 33bps lower respectively. 10y Gilt yields were 22bps lower over the week and the Swiss yield curve turned completely negative – along with a number of other eye watering record lows being achieved. Commodity markets also joined in the global rally. Gold was up +1.32% over the week, Silver +11.35%, Copper +4.53%, Nickel +10.53% and WTI Oil +2.83%.

One market which is struggling to keep up is European Banks however. The Euro Stoxx Banks index was down -0.88% last week and is nearly 19% down from its pre referendum levels. Italian Banks are at the heart of that weakness with the likes of Unicredit, Intesa, Banco Monte dei Paschi and UBI down -9.78%, -3.44%, -15.79% and -6.11% respectively last week. There’s been plenty in the press about possible liquidity guarantees and recaps for Italian Banks and it looks like this one still has plenty of room to run. The FT ran a story over the weekend suggesting that Italy PM Renzi is set to inject public funds into the banking system should it come under severe systematic stress, and so break the bail-in principles of EU regulation. While UK politics has dominated headlines for the last few weeks it feels like the health of Italian Banks could well takeover in the near term.

The Brexit chat should reduce this week whilst never being too far beneath the surface. As the week builds Friday's payrolls will also loom large. We should get some payback from last month's weak 38k headline print and 59k downward revisions to prior months. DB don’t expect a return to prior levels though and are at 155k. Consensus is at 175k while expectations are also for the unemployment rate to creep up one-tenth to 4.8% (DB at 4.9%).

After last month's payroll report and Brexit, the Fed have been priced out until October 2018 now (the probability of a December hike this year is 12% and a December 2017 hike is 45%) and regular readers will know that we've always felt the Fed will struggle to raise rates this cycle. However the pattern has always been under and over pricing the risk and perhaps the market has got a little complacent about the Fed again. If Brexit chat eases for a while and the data is ok, there will be a number of Fed members who start getting hawkishly excited again. So watch out for this, even if we think that they will still struggle to raise rates this cycle.
In terms of the weekend newsflow and unlike in previous weeks there’s not actually a great deal to report. It’s been largely politics orientated again and the biggest perhaps is the news that the UK Chancellor George Osborne is considering a cut in the corporate tax rate to less than 15% (from 20% now) in a bid to deter businesses from leaving the UK.

Glancing at our screens, markets in Asia are opening the week on the front foot and largely following the lead from the European and US sessions on Friday. Bourses in China are leading the way with the Shanghai Comp currently +1.33% and CSI 300 +1.07%, while the Hang Seng (+1.54%) has also risen strongly. Elsewhere the Nikkei (+0.44%), Kospi (+0.35%) and ASX (+0.32%) are also up. Meanwhile the Aussie Dollar has pared early losses after the Australian General Election over the weekend failed to yield a clear winner on election night.

Moving on. This morning we published our latest HY monthly where we’ve highlighted the orderly nature in which markets have handled the outcome of the UK referendum on EU membership. Overall there is evidence that both GBP HY and generally domestically focused UK names have been under pressure since the referendum. Whether this is a trend that continues will probably depend on the ultimate outcome for the UK economy. Near-term there might be some respite for the relative underperformance purely due to a lack of information. Ultimately the Conservative leadership contest and subsequent negotiations with the EU are likely to drive sentiment. See the report from Nick Burns just before this one.

Just when you thought we were done with politics, one interesting development on Friday came in Austria with the news that the Austrian Constitutional Court has decided in favour of the FPO contestation and annulled May 22nd's election result with a likely new run-off presidential election to be held in autumn according to our European economists. Significantly, our colleagues note that it seems likely that the new election will be neck-and-neck again. As a result political uncertainty has resurfaced as the far right wing populist Hofer again has the chance to become Austria’s president. He had previously caused some uproar with his statement that if he was elected president there would be early parliamentary elections and pointing to a referendum on EU membership (Oxit) in the event EU policy goes in the wrong direction. One to keep an eye on.

The economic dataflow on Friday in the US was a bit of a mixed bag. On the positive side the ISM manufacturing reading for June rose 1.9pts to 53.2 (vs. 51.3 expected) which was the best reading since February last year. In the details the employment component rose above 50 (+1.2pts to 50.4) for the first time since November while new orders, production and new export orders also rose. On the negative side however construction spending in May was unexpectedly weak (-0.8% mom vs. +0.6% expected) while total vehicle sales in June declined to an annualized 16.6m rate (vs. 17.3m expected) from 17.4m in the prior month.

Meanwhile in Europe there was a relatively positive read-through from the final manufacturing PMI revisions for June. The Euro area reading was revised up two-tenths to 52.8 while readings for Germany and France were revised up to 54.5 (+0.1pts) and 48.3 (+0.4pts) respectively. The PMI for the UK came in at 52.1 (vs. 50.1 expected) which was a decent increase on the 50.4 in May although it remains to be seen how much of an effect the referendum at the end of the month played a part.

There was a little bit of central bank speak on Friday too. The Cleveland Fed’s Mester (hawkish) said (unsurprisingly) that it is too early to judge the Brexit impact on the US which was a view also shared by Vice-Chair Fischer (centrist to slightly dovish), with Fischer also adding that recent data since the weak payrolls print last month ‘has done pretty well’.

Away from the data we’ve got a number of central bank speakers scheduled through the week. Over at the Fed Dudley is due on Tuesday and Tarullo on Wednesday. The BoE’s Carney will publish the BoE financial stability report tomorrow and the BoJ’s Kuroda is due to speak on Thursday. The latest twist in UK politics sees the Conservative Party begin the process of electing a new leader on Tuesday.

http://www.zerohedge.com/news/2016-...s-italian-bank-pain-holiday-shortened-session
 

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#2

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#3
Nothing to see. Best bet ( if you're interested ) is to listen in one window, play around on GIM or surf the web in another window.

The Coming Moonshot In Oil Prices | Art Berman
FinanceAndLiberty.com


Published on Jul 4, 2016
In spite of the recent low prices for oil and natural gas, an energy supply crunch is looming warns geological consultant Arthur Berman.

Berman's perspective should not be lightly dismissed: he has 37 years of experience in petroleum exploration and production with 20 of those years at Amoco (now known as BP). He has published more than 100 articles and reports on geology, technology and the petroleum industry during the past five years --more than 20 of those focused on the shale industry including the Barnett, Fayetteville, Haynesville, Bakken and Eagleford plays.

This video was posted with permission from http://PeakProsperity.com

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

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#4
Frontrunning: July 5


by Tyler Durden
Jul 5, 2016 7:40 AM

  • Pound Tumbles to 31-Year Low as Its Post-Brexit Selloff Resumes (BBG)
  • Bad Debt Piled in Italian Banks Looms as Next Crisis (WSJ)
  • Stock Market to Bond Market: ‘La-La-La I Can’t Hear You' (WSJ)
  • A Prime Minister, a Referendum and Italy’s Turn to Get Worried (BBG)
  • Brexit Vote Paralyzes Companies Across Europe (WSJ)
  • Brexit-Like Populist Pressure May Spawn ’70s-Style Stagflation (BBG)
  • Boris Johnson backs Andrea Leadsom for Prime Minister as Tory MPs vote (Telegraph)
  • Brexit: Theresa May demands early talks on Britain leaving the EU (Evening Standard)
  • Saudi crown prince seeks to assure Saudis after triple bombings (Reuters)
  • Russia to exhaust Reserve Fund in 2017 - Finance Ministry proposal (Reuters)
  • Slowdown in Shadow Lending Tightens Credit on Main Street (WSJ)
  • Islamic State Extends Reach as It Suffers Defeats (WSJ)
  • Volkswagen's finance arm sells Russia bond to fund local operations (Reuters)
  • New York Police Investigate Mysterious Central Park Blast (WSJ)
  • China says wants peace after newspaper warns on South China Sea clash (Reuters)
  • July 4 Opening Is No Guarantee for Success at Box Office (WSJ)
  • Realtors Pitch Vancouver to Soak Up Capital Flight From Brexit (BBG)
  • Turkey's Erdogan moots plan to grant citizenship to Syrians (Reuters)
  • London Banker Bonuses Set to Shrivel as Brexit Hits Dealmaking (BBG)
Overnight Media Digest

WSJ

- Britain's vote to leave the EU has produced dire predictions for the UK economy. The damage to the rest of Europe could be more immediate and potentially more serious. Nowhere is the risk concentrated more heavily than in the Italian banking sector. on.wsj.com/29cz6xi

- During a rare spate of attacks in Jordan recently, Western officials in the capital Amman intercepted messages from Islamic State leaders urging supporters to spread terror at home rather than join militants across the border in Syria. on.wsj.com/29kQdzC

- The Fourth of July weekend has often been the time for Hollywood to launch some of its biggest hits. But new releases "The Legend of Tarzan" and "The BFG" are the latest examples of big-budget disappointments this summer. on.wsj.com/29saTsS

- Beepi, a Silicon Valley company selling used vehicles on a mobile app or website, will launch a new service this week that delivers cars to buyers nearly anywhere in the U.S. regardless of where the vehicle currently resides. on.wsj.com/29cF0yF

- Snapchat has become a digital mecca for high-school and college-age students, allowing them to send disappearing photos and videos. Now, the "older folks" are arriving in force, whether they are parents spying on their kids, or professionals trying out another social-media platform. on.wsj.com/29k4jRF

FT

- Simon Stevens, head of the National Health Service, said the UK government should honour existing NHS funding pledges after Brexit.

- Royal Dutch Shell wants to leave behind extremely large steel and concrete structures when it abandons Brent field and Shell has concluded that safety and environmental risks involved in removing much of the infrastructure would far outweigh the benefits.

- Nigerian President Muhammadu Buhari removed deputy oil minister Emmanuel Kachikwu from his joint role as the national oil company's managing director and has also appointed a new board.

- Boris Johnson has backed UK's energy minister Andrea Leadsom as the next prime minister. His endorsement establishes her as a serious rival to frontrunner Theresa May.

NYT

- YouNow, a live-streaming app that allows users to perform and interact with fans, has helped singers like Hailey Knox break into the industry. http://nyti.ms/29mwAsn

- As officials struggle to balance the city budget of San Francisco, activists and some lawmakers want the sector to help pay for programs for the homeless and for affordable housing. http://nyti.ms/29md5A4

- A California initiative meant to lower skyrocketing prescription drug prices faces opposition from not only drug makers but also some patient advocacy groups. (http://nyti.ms/29eMs0W)

- A British mutual fund with large investments in London commercial real estate said on Monday that it had suspended requests from investors wanting to exit the $3 billion fund. The decree from Standard Life Investments, the asset management unit of the large British insurance company, was a response to panicked investors looking to pull their assets following the vote by Britons last month to sever ties with the European Union. (http://nyti.ms/29i8vW3)


Britain

The Times

Boris Johnson has endorsed Andrea Leadsom to be Britain's next prime minister, days after he ruled out making his own bid for the post. (http://bit.ly/29fem9t)

Top Gear host Chris Evans said he was quitting the BBC show and the corporation said it had no plans to replace him. (http://bit.ly/29fehCZ)

The Guardian

Investors in Standard Life Plc's property funds have been told that they cannot withdraw their money, after the firm acted to stop a rush of withdrawals following the UK's decision to leave the EU. (http://bit.ly/29fgjTl)

Sainsbury Plc has ditched its joint venture with the low-cost retailer Netto, putting up to 400 jobs at risk and marking the Danish chain's second exit from the UK in six years. (http://bit.ly/29fgle8)

The Telegraph

Three former Barclays Plc traders have been found guilty of conspiracy to defraud after a three-month trial at Southwark Crown Court. (http://bit.ly/29fgFtl)

Britain will scrape by without a full-blown recession over the next two years as a weaker pound cushions the Brexit shock and panic subsides, Standard & Poor's has predicted. (http://bit.ly/29fhxhv)

Sky News

Nigel Farage has announced he will step down as leader of UKIP in the wake of the UK's vote to leave the EU. (http://bit.ly/29fhhPu)

A suicide bomber detonated a device near the security headquarters of the Prophet's Mosque in Medina, according to Saudi television. (http://bit.ly/29fgXk1)

The Independent

Tom Watson will hold emergency talks with trade union leaders after a fresh attempt to persuade Jeremy Corbyn to step down failed. (http://ind.pn/29fhnXu)

London Stock Exchange shareholders have approved the company's merger with Deutsche Boerse AG.

http://www.zerohedge.com/news/2016-07-05/frontrunning-july-5
 

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#5
Futures Slide As Italian Banks Drag Risk Lower; Sterling Tumbles; Bond Yields Drop To New Record Lows


by Tyler Durden
Jul 5, 2016 6:48 AM


The festering wound involving Italian banks in general and Italy's third largest bank Monte Paschi, just got worse yet again, as the bank which suddenly everyone is focused on extends yesterday’s 14% drop, and is halted in Milan trading after falling 7%, once again dragging down European bank stocks with it, and this time US equity futures are starting to notice.

As a reminder, Matteo Renzi's helplessness at Italy's financial situation, appears to have started to boil over, when as we reported overnight, some testy words were exchanged, in which the Italian PM accused the ECB's head and former Bank of Italy governor, Mario Draghi, of not doing everything in his power to "help Italian banks." Instead it was up to the Italian government to flaunt bail-in rules once again, after La Stampa reported that the government is once again studying a capital plan for Monte Paschi that includes new convertible bonds and support from Atlante fund, the latter worth at least €3 billion even as Brussels says intervention would need to respect principle of “burden sharing” by shareholders and bondholders. As La Stampa also adds, the results of 2016 stress test, due to be published on July 29, could trigger the start of the process to inject new capital in the bank

In short, Italy is desperate to bail out a bank whose failure (or even bail in) may spark a bank run, yet neither the ECB is rushing to help it, nor Europe has given any indication it will budge.

It wasn't just Italian banks, which have become a near-daily fixture of Europe's failing system, that dragged risk lower, but also the latest surge in the Yen and another fresh all time low in DM bond yields. Indeed, the Yen headed for biggest advance in more than a week, with the USDJPY tumbling overnight, down -0.8% to 101.65, a move which started earlier in Asian session amid thin liquidity, around the time Japan’s 10-year bond auction draws record-low average yield.

And then there was sterling, which after flirting with a rebound over the past week following the Brexit vote, fell to its weakest level in 31 years against the dollar, exceeding lows reached in the aftermath of Britain’s vote to leave the European Union. Sterling sank before Bank of England Governor Mark Carney gives a press conference in London, in which he outlined more tools to contain the fallout from the U.K.’s decision to quit the bloc, among which the first indications of how he would ease stress on UK banks:
  • Bank of England’s Financial Policy Committee cuts countercyclical capital buffer for U.K. banks to zero from 0.5%, according to Financial Stability Report published Tuesday.
  • Expects buffer to stay at zero until at least June 2017
  • Says there is evidence that risks surrounding Brexit have begun to materialize
  • Says current financial stability outlook is challenging; sees period of uncertainty, adjustment
That said, Carney's "easing" remarks have pushed UK stocks to session highs and helped cut the S&P drop to only 9 points, while pushing the pound off its multi-decade lows. Yes, we have reached a singularity in which central bank easing is currency positive.

So why the latest intervention by the BOE? As Bloomberg adds, there are increasing signs that the U.K. vote is weighing on investor confidence. As reported last night, Scotland-based Standard Life Investments suspended trading in its 2.9 billion-pound ($3.8 billion) fund this week, after seeing an increase in redemption requests “as a result of uncertainty for the U.K. commercial real estate market.” Data published by YouGov Plc and the Centre for Economics and Business Research on Tuesday indicated that pessimism about the economic outlook almost doubled following the June 23 referendum. “There’s a lot of nervousness in the sterling market,” said Thu Lan Nguyen, a currency strategist at Commerzbank AG in Frankfurt.

Pierre Mouton, of Notz, Stucki & Cie. in Geneva told Bloomberg that “part of the weaknesses or sell-off today can be explained by some profit taking after a surprising week,” said “We have seen this morning that the PMI wasn’t that good for the euro area, and markets can react to economic figures. It might be a good opportunity at the beginning of the third quarter to lighten the positions and wait.”

A measure of U.K. business confidence dropped sharply following the referendum, a report showed on Tuesday. Across Europe, Purchasing Managers Indexes for manufacturing and service showed lackluster growth. “We have an amalgamation of small reasons to fall piling up,” said Takuya Takahashi, a Tokyo-based senior strategist at Daiwa Securities Group Inc.

Putting this all together, and we get a major drop across European markets in which all industry groups on the Stoxx Europe 600 Index declined, with insurers and banks among the biggest losers, as the market takes a second look at the Brexit aftermath and suddenly is not so sure that everything is "contained."

Brent crude dropped below $50 a barrel as nickel slid from an eight-week high, while gold and silver retreated for the first time in at least a week. The pound fell to its weakest level since 2013 against the euro and South Africa’s rand led losses among the currencies of commodity-exporting nations. Bond yields plumbed new lows from Australia to the U.S. The MSCI All-Country World Index dropped 0.4% in early trading, its first slide in more than a week. The Stoxx 600 lost 1.3%, extending its decline into a second day, while S&P 500 Index futures slid 0.6%, The U.S. market is reopening after being closed for the Independence Day holiday.

The MSCI All-Country World Index dropped 0.4 percent at 10:58 a.m. in London, its first slide in more than a week. The Stoxx 600 lost 1.3 percent, extending its decline into a second day, while S&P 500 Index futures slid 0.6 percent. The U.S. market is reopening after being closed for the Independence Day holiday. In Europe, all industry groups fell, and more than 550 companies in the Stoxx 600 declined, with commodity producers among the biggest losers. Anglo American Plc and BHP Billiton Ltd. dropped more than 2.5 percent, while precious metals miner Fresnillo Plc dropped 2.9 percent after reaching its highest price since 2013. Standard Life Plc lost 4.2 percent after its money manager unit suspended trading in its 2.9 billion-pound ($3.9 billion) U.K. Real Estate fund. Legal & General Group Plc fell 6.4 percent after Jefferies Group lowered its rating on the insurer on concern over its dividend. The MSCI Emerging Markets Index fell 1.1 percent, after climbing 6.2 percent in the past five days in the biggest rally since the period ended March 7.

Meanwhile, global bond yields continued setting new record lows: the yield on Treasury 10-year notes slid seven basis points to an unprecedented 1.3750 percent. The securities are rallying as futures indicate that the chance of the Federal Reserve raising interest rates this year has dwindled to 12 percent, down from 50 percent prior to the U.K.’s vote on EU membership. Thirty-year bond yields dropped to as low as 2.1395 percent, also a record. “This is the most obvious manifestation of the global search for yield forcing investors further out the curve,” said Damien McColough, head of fixed-income research at Westpac Banking Corp. in Sydney. “The size of the drop in the 30-year yield reflects a bit of a capitulation trade, but I am not particularly surprised.”

Germany’s 10-year bond yield was at minus 0.16 percent, approaching the minus 0.17 percent all-time low reached on June 24. The yield on the U.K.’s 10-year gilt yield slid four basis points to 0.79 percent. Australia’s 10-year yield dropped as much as nine basis points to a record 1.92 percent following the RBA meeting. Taiwan’s declined four basis points to an unprecedented 0.70 percent after the island’s central bank was said to have reduced an overnight interest rate. Japan sold 10-year debt at a yield of minus 0.24 percent, the lowest-ever rate, and the yield on its 20-year notes touched a record low of 0.03 percent.

Market Snapshot
  • S&P 500 futures down 0.6% to 2083
  • Stoxx 600 down 1.3% to 326
  • FTSE 100 up 0.1% to 6530
  • DAX down 1.5% to 9567
  • S&P GSCI Index down 1.6% to 370.5
  • MSCI Asia Pacific down 0.5% to 130
  • Nikkei 225 down 0.7% to 15669
  • Hang Seng down 1.5% to 20751
  • Shanghai Composite up 0.6% to 3006
  • S&P/ASX 200 down 1% to 5228
  • US 10-yr yield down 6bps to 1.39%
  • German 10Yr yield down 2bps to -0.16%
  • Italian 10Yr yield up 2bps to 1.27%
  • Spanish 10Yr yield up 4bps to 1.19%
  • Dollar Index down 0.07% to 95.58
  • WTI Crude futures down 2.6% to $47.71
  • Brent Futures down 2.2% to $49.01
  • Gold spot down 0.5% to $1,344
  • Silver spot down 3.4% to $19.62
Top Global Headlines
  • Carney Sees Tougher Times With Brexit as BOE Eases Bank Rules
  • Italy Said to Consider Capital Injection in Banca Monte Paschi
  • Tesla Misses Delivery Forecast Amid ‘Extreme’ Production Ramp-up
  • Billionaire Bros. Seek Repeat of Danaher’s M&A-Fueled Ascent
  • Debt Boom That Put JPMorgan on Top After Decade Gathers Pace
  • Third Ex-Citigroup Trader Wins Unfair Dismissal Lawsuit
  • Blackstone Names Ex-M&S CEO Bolland Europe Private Equity Head
  • For RBA’s Next Move on Interest Rates, Set Alarm for July 27
  • Buffett Applies to Fed to Expand Wells Fargo Holding Beyond 10%
  • Aurobindo Said to Enter Fray for $1.5 Billion Teva Portfolio
  • Wall Street Takes a Hit in Draft of Democratic Party’s Platform
  • ‘Dory’ Swims Past ‘Tarzan’ for Third Straight Box-Office Win
  • Petrobras CEO Said to See $15b 5-Year Payment in U.S. Case: Estado
  • Google, Facebook Said to Have Looked at Buying LinkedIn: Recode
  • London Banker Bonuses Set to Shrivel as Brexit Hits Dealmaking
  • Goldman Sachs Tells Asset-Management Staff to Curb Spending: FT
  • U.K. Business Expectations Fall ‘Off a Cliff’ on Brexit Vote
  • Staples Hires KPMG to Weigh Possible U.K. Unit Sale: Telegraph
Looking at regional markets, dampened demand was observed for riskier assets in Asia following the US holiday and losses seen in European stock markets. Nikkei 225 (-0.7 %) was pressured from the open by a firmer JPY, while ASX 200 (-1.0%) was dragged lower amid a decline across the commodities complex, with participants initially tentative ahead of the RBA rate decision. Chinese markets were mixed with the Hang Seng (-1.5%) conforming to the mostly downbeat tone, while Shanghai Comp (+0.6%) was resilient amid somewhat encouraging data in which Caixin Services PMI printed an 11-month high and although the Composite figure printed slightly lower than prior, it remained above the 50 benchmark level. 10yr JGBs traded lower but are off their worst levels following a 10yr auction which showed the lowest accepted price, beat estimates and better than prior.

Top Asian News
  • China Rising Yield Premium Spurs Global Funds to Boost Holdings: Gap with 10-year U.S yield widest since August
  • Real Yield at 2014 Low as India Sells Debt Quotas to Foreigners: Consumer prices rose in May at fastest pace in 21 months
  • Japan Top-Performing Fund Fell 25% as Volatility Rose on Brexit: Stratton’s Japan Synthetic Warrant Fund fell 50% YTD
  • As 2-and-20 Fees Under Fire, Asia Hedge Funds Seek Cost Cuts: Bigger funds are joining “platforms” as costs rise, fees fall
  • Aussie Election Hangs in Balance as Slow Vote Count Proceeds: Prime Minister Turnbull’s coalition still short of majority
In Europe, equities have been equally volatile today, with all major European indices trading in negative territory (Euro Stoxx: -1.5%), and attention given to the yoyo-ing Italian financial sector as well as yet another German automaker scandal. Italian financials saw downside initially, before moving higher shortly after the open, however with Banca Monte dei Paschi (-9%) still one of the worst performers despite source reports suggesting that Italy could be considering capital injections in the Co. German Automakers also unperformed today after the likes of Daimler, Volkswagen and BMW have all been implicated in alleged collusion with regards to steel prices. Given the price action across other asset classes, fixed income has been comparatively quiet, with Bunds higher by around 30 ticks by mid¬morning, however failing to break 167.50, while the US 10-year reached fresh record lows.

Top European News
  • Pound Tumbles to 31-Yr Low as Selloff Resumes Before Carney: Sterling sank to lowest since 2013 vs euro ahead of BOE Governor Mark Carney’s press conference, where he may outline more tools to contain Brexit fallout.
  • U.K. Economy May Face Contraction as Brexit Bites: Former deputy BOE governor John Gieve said on Bloomberg TV: “I am expecting quite a sharp reduction in investment spending, a sharp hit to the commercial property market, probably a check to consumer spending, all of which could push us toward zero or below growth this year and the beginning of next”
  • Italy Said to Consider Capital Injection in Monte Paschi: Italy would seek to use Article 32 of EU’s bank failure rules that allows temporary state aid.
  • Hutchison, VimpelCom Said in Exclusive Sale Talks With Iliad: Iliad emerged as favored buyer of wireless assets in Italy that would be used to create fourth carrier in that country.
  • Mediaset Mulling New Channels, Extra Payout After Unit Sale: Co. considering starting free-to-air television channels in France, Germany, U.K. as it reviews investment options.
In FX, the pound fell to its lowest in more than three decades against the dollar, surpassing levels immediately after the referendum. An index published by YouGov Plc and the Centre for Economics and Business Research indicated pessimism about the economic outlook almost doubled in the week following the June 23 vote. Sterling slid 1.1 percent to $1.3148 and was 1 percent weaker at 84.73 pence per euro. The yen climbed 0.9 percent to 101.66 per dollar. The currency has gained more than 4 percent since the U.K. referendum amid persistent demand for haven assets. The Bloomberg Dollar Spot Index rose 0.2 percent. Australia’s dollar fell 0.5 percent, after climbing 1.2 percent over the last two sessions. A national election over the weekend failed to produce a clear winner with officials continuing to tally votes on Tuesday. The MSCI Emerging Markets Currency Index retreated 0.5 percent. It was little changed on Monday after jumping 2 percent in the four days through Friday.

“Markets are concerned about what’s going on in the U.K. and there’s more uncertainty about Italian banks,” said Vishnu Varathan, a senior economist at Mizuho Bank Ltd.

In commodities, precious metals declined as the dollar snapped five days of losses. Silver tumbled 2.9 percent to $19.73 an ounce, ending its biggest two-day advance since 2011. Gold fell 0.4 percent to $1,345.63 an ounce. Industrial metals also declined, led by a 1.2 percent loss in Copper to $4,836 a metric ton. Oil extended losses, with West Texas Intermediate crude dropping to $47.71 a barrel, a decline of 2.6 percent relative to Friday’s close following the July 4 public holiday. Brent fell 2.1 percent to $49.03.

On today's calendar, in the US we get factory orders data for May (expected to print at -0.8% mom reflecting the weak durable goods data) and the IBD/TIPP economic optimism reading for July due. Final revisions to May durable and capital goods orders data will also be released. Away from the data, this morning BoE Governor Mark Carney will publish the BoE financial stability report and this will be closely followed up by a press conference at 11am BST which will be worth watching closely

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities trade lower across the board as risk aversion persists with Italian banking names and German auto names further souring sentiment
  • GBP/USD hit a fresh 31-year low as the post-Brexit fallout continues to grip FX markets and UK Services PMI falls short of expectations (albeit from a partly out-of-date report)
  • Looking ahead, highlights include US IBD/TIPP Economic Optimism, Factory Orders & Durable Goods, GDT Auction and a host of central bank speakers
  • Treasuries rally with 10Y and 30Y hitting record lows as risk-off sentiment sends global equities and commodities lower; this week will feature nonfarm payrolls on Friday and FOMC minutes Wednesday.
  • Italy is considering injecting fresh capital into Banca Monte dei Paschi di Siena SpA to boost the finances of Italy’s third-biggest bank ahead of stress test results
  • It’s now a familiar refrain: A European prime minister calls a referendum, his job could be on the line and markets are getting worried. This time it’s not Britain’s David Cameron but Italy’s Matteo Renzi has called a vote, expected in October
  • The Bank of England cut its capital requirements for U.K. banks and pledged to implement any other measures needed to shore up financial stability after Britain’s shock decision to leave the European Union
  • BOE’s Carney said bank will take whatever action is necessary to support U.K. but its actions cannot fully offset Brexit volatility
  • Confidence of British executives plunged and pessimism doubled as the Brexit turmoil stoked concerns that business investment and the property market are poised to slump
  • Commercial-property companies slumped after Standard Life Investments suspended trading in its 2.9 billion-pound ($3.9 billion) U.K. Real Estate fund on Monday as redemptions surged in the wake of Britain’s vote to leave the European Union
  • The pound fell to its weakest level in three decades against the dollar, exceeding lows reached in the aftermath of Britain’s vote to leave the European Union
  • The euro-area economy continued growing at a lackluster pace in June, ahead of the U.K.’s referendum on its European Union membership. Purchasing Managers Index for manufacturing and service activity was unchanged at 53.1
  • The Australian dollar erased losses after the central bank left its benchmark cash rate unchanged at a policy meeting on Tuesday. The Aussie rose by as much as 0.1% after the decision
  • Four banks including ING Groep NV and ABN Amro Group NV agreed to pay hundreds of millions of euros to settle a long-running dispute with Dutch businesses over interest- rate swaps that backfired after the 2008 financial crisis
  • Oil prices won’t rise much further over the next year and a half as demand growth slows and refiners comfortably meet gasoline consumption, according to the world’s largest independent oil-trading house
* * *

US Event Calendar
  • 9:45am: ISM New York, June (prior 37.2)
  • 10am: IBD/TIPP Economic Optimism, July, est. 48.3 (prior 48.2)
  • 10am: Factory Orders, May, est. -0.8% (prior 1.9%)
    • Factory Orders Ex Trans, May (prior 0.5%)
    • Durable Goods Orders, May F, est,. -2.2% (prior -2.2%)
    • Durables Ex Trans, May F, est. 0.3% (prior -0.3%)
    • Cap Goods Orders Non-defense Ex Air, May F (prior -0.7%)
    • Cap Goods Ship Non-defense Ex Air, May F (prior -0.5%)
  • 2:30pm: Fed’s Dudley speaks in Binghamton, N.Y.
* * *

DB's Jim Reid concludes the overnight wrap

One theme which could instead dictate near term direction for markets however and which arguably Brexit has reignited and brought back to the forefront is the ailing and fragile state of the Italian banking sector. Indeed following on from the weekend headlines concerning Italy PM Renzi and the suggestion that he is prepared to go against EU bail-in principles by using public funds to bail out domestic banks, yesterday the sector was put under further stress after Banca Monte dei Paschi revealed that it had received a notice from the ECB requiring it to meet certain non-performing loan requirements. Indeed the draft statement laid out NPL targets for the next three years which would require Monte to shed bad loans by just over €14bn by 2018.

That sent Monte shares down 14% yesterday with the rest of the Italian bank complex also sent tumbling (Banco Popolare SC -4.50%, Mediobanca -4.21%, Unicredit -3.63%, UBI -3.05%). Monte shares - which are at an all time low - are now down over 70% year-to-date already while yesterday’s move took the bank’s market cap below €1bn. With the sector sitting on a €360bn behemoth of bad loans the results of the EU bank stress tests on the 29th July loom large and it’s hard not to picture this Italian job as an important event for markets. Don’t forget that we’ve also got the not-so-small matter of the senate reform referendum in October. On a similar topic, interestingly a poll run by Ipsos for Corriere della Sera yesterday showed 46% of Italian voters are in favour of remaining in the EU versus 28% in favour of leaving. That leaves a relatively sizeable 26% undecided or unwilling to vote.

Meanwhile the daily soap opera that is UK politics rolls on with the news yesterday that UKIP leader Nigel Farage has become the latest political leader to stand down after arguing that he had achieved his political ambition following the referendum result. Today the first rounds of voting for the Conservative leadership position commence with MP’s voting to take the five candidate race down to four. Further voting is set to come on Thursday and then again on Tuesday when we will be down to the final two candidates. However we’ll still have to wait until September until we know the result of the final vote and therefore the subsequent position on renegotiation and Article 50.

In terms of markets yesterday, with the US on holiday and so volumes much lower than usual that weakness for Italian banks was enough to see risk assets finally succumb to losses in Europe following the strong run since last Monday. The Stoxx 600 ended -0.74% by the closing bell and the FTSE 100 was -0.84%. Sterling was up a fairly modest +0.15% to $1.329. Unsurprisingly the FTSE MIB (-1.74%) and Euro Stoxx Banks (-1.52%) indices underperformed. BTP’s were also underperformers in sovereign bond markets with yields a couple of basis points higher. Moves for credit markets were highlighted by weakness in financials. The iTraxx Main and Crossover indices were little changed however senior and sub financials materially underperformed after closing 6bps and 16bps wider respectively.

Some of the more notable price action yesterday came in the commodity complex and specifically precious metals. Silver in particular extended its post Brexit rally after rising another +2.86% yesterday and at one stage rising above $21/oz for the first time since July 2014. Gold closed up +0.70% meaning it is now up nearly 8% since pre-Brexit. Silver is up a fairly remarkable +19% in the same time frame.

Refreshing our screens now, with the exception of China most major bourses are lower in early trading in Asia this morning. The Nikkei (-0.78%), Hang Seng (-0.81%), Kospi (-0.35%) and ASX (-0.89%) are all in the red as we type, however the Shanghai Comp is +0.40%. That perhaps reflects the latest Caixin services reading for June in China which rose 1.5pts to 52.7 and to the highest level since July last year. Combined with the soft manufacturing reading from last week however the composite reading nudged down 0.2pts to 50.3. Meanwhile the Aussie Dollar (-0.27%) is a touch weaker this morning following the latest trade data which revealed a widening in the deficit. The RBA cash target rate decision is due shortly after we go to print (no change expected). US equity index futures are modestly in the red.

In terms of the rest of the newsflow, yesterday saw the ECB release their latest CSPP holdings data which showed the Bank as continuing its strong run rate of purchases and so far surprising on the upside. Total purchases settled by July 1st were €6.798bn. This implies that the latest weekly purchases amount to €1.9bn and an average daily run rate in that week of €380m. The average daily run rate since the program started is €425m. Interestingly we also got a breakdown of purchases by primary and secondary markets and it showed that 96% of purchases were made in the secondary and only 4% in the former, so perhaps making the quantum of buying even more impressive given the low amount of new issue buying.

There wasn’t much in the way of economic data for us to highlight yesterday. Of the data that was released, Euro area PPI printed at +0.6% mom for May which was higher than expected (+0.3% mom) and has had the effect of slowing the rate of deflation to -3.9% yoy from -4.4%. The other release was the July Sentix investor confidence reading which printed at a below market +1.7 for the headline (vs. +5.0 expected) and down 8.2pts from June. That was the lowest print since January last year and a first bit of evidence of the impact of the Brexit vote. The expectations component reading actually tumbled to -2.0 from +10.0.

Looking at the day ahead, this morning in Europe we’ve got a much busier calendar to get through with the final June services and composite PMI’s due out for the Euro area, Germany and France. We’ll also get the readings for the UK and the periphery. Euro area retail sales data for May follows this shortly after. Over in the US this afternoon we’ve got factory orders data for May (expected to print at -0.8% mom reflecting the weak durable goods data) and the IBD/TIPP economic optimism reading for July due. Final revisions to May durable and capital goods orders data will also be released. Away from the data, this morning BoE Governor Mark Carney will publish the BoE financial stability report and this will be closely followed up by a press conference at 11am BST which will be worth watching closely. Prior to this the EU’s Juncker is due to address EU Parliament (at 8am BST) on the conclusions of the Heads of State and Government meeting last month. Over at the Fed the NY Fed President Dudley is due participate in a panel discussion at 7.30pm BST. Finally the aforementioned first round Conservative Party leadership election in the UK kicks off today.

http://www.zerohedge.com/news/2016-...ower-sterling-tumbles-bond-yields-drop-new-re
 

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Asian Metals Market Update: July 5, 2016
By: Chintan Karnani, Insignia Consultants
There can be profit booking before the US jobs numbers on Thursday and Friday. Nothing extra ordinary has happened over the weekend. No new political developments or surprises can be an excuse for gold and silver to see a correction. The next ten trading sessions is very crucial for gold and silver. They need to break and trade over $1360 and $2152 for another five percent rise before the end of July. Momentum is bullish for gold and silver. But I will prefer cautious optimism in gold. However I will still prefer to use sharp declines to invest in silver. Silver is still undervalued as compared to its precious metals counterparts.


Gold and Silver Market Morning: July-05-2016 -- Holiday over, U.S. will drive gold and silver prices!
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
Shanghai pulled the gold price back ahead of New York’s re-entry after Independence Day to a level not far from the close of last Thursday. We do expect a ‘shunt’ effect in New York as the three global gold markets return to a common view on the gold price. We expect the view that caused New York to take gold and silver prices higher on Friday, ahead of the long weekend; will return to move prices up today.
 

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#12
Frontrunning: July 6


by Tyler Durden
Jul 6, 2016 7:33 AM

  • For Hillary Clinton, Political Fight Over Emails Is Far From Over (WSJ)
  • More "Extreme carelessness" - Iraq inquiry slams Blair over legal basis for war (Reuters)
  • FBI Director Rebukes State Department Over Security Practices (WSJ)
  • Gold Climbs to Two-Year High as UBS Sees Start of New Bull Run (BBG)
  • Stocks and bond yields sink as growth fears set in (Reuters)
  • Oil Prices Continue to Tumble on Concerns Over Global Growth Prospects (WSJ)
  • Italy Could Spark European Bank Crisis, SocGen Chairman Says (BBG)
  • Record-Low Yields Abound as Brexit Stresses Grow; Yen, Gold Gain (BBG)
  • Global bond burn from Brexit may now force fiscal response (Reuters)
  • Hillary Clinton to Criticize Donald Trump’s Casino Record in Atlantic City Speech (WSJ)
  • Businesses Say Proposed Tax Rule Is Too Complicated (WSJ)
  • How the FBI’s Clinton E-Mail Decision Just Changed the 2016 Race (BBG)
  • Farewell 'pantomime villain': Farage will miss EU boos (Reuters)
  • Brilliant: "Letting Central Banks Manage the Economy Might Not Be So Bad" (BBG)
  • Tesla told regulators about Autopilot crash nine days after accident (Reuters)
  • Elon Musk Says Autopilot Death 'Not Material' to Tesla Shareholders (Fortune)
  • Turnbull’s Coalition Edges Ahead as Election Count Continues (BBG)
  • Different targets, different countries: The challenge of stopping Islamic State (Reuters)
  • Saudi king vows to fight religious extremists after bombings (Reuters)
  • U.S. court to hear arguments in warrantless NSA spying case (Reuters)

Overnight Media Digest

WSJ

- FBI Director James Comey said Hillary Clinton's handling of classified information was "extremely careless" but that the bureau would not recommend charges over her use of private email. http://on.wsj.com/29sON7V

- Two big British asset managers blocked investors from pulling money out of real-estate funds, and the pound sank to a new 31-year low Tuesday, signs that the UK's vote to leave the EU was shaking the country anew. http://on.wsj.com/29g6Rhw

- Home Secretary Theresa May established herself as the front-runner in the race to become the next UK prime minister by convincingly winning a first round of voting for a new Conservative Party chief. http://on.wsj.com/29gewB2

- Upon taking the helm of Valeant Pharmaceuticals International Inc, Joseph Papa promised to start a "new chapter" at the struggling company. But Wall Street is questioning whether the man hired to effect change can succeed after drawing from a playbook similar to Valeant at his previous company. http://on.wsj.com/29ghllS


FT

Theresa May established a strong lead in a her bid to become prime minister.

Medivation Inc said it will hold talks with French pharmaceutical company Sanofi SA about a sale that will be open to other bidders.

Deutsche Boerse AG floated the idea of setting up a dual holding company after its merger with London Stock Exchange Group Plc to meet all regulatory requirements.

Six of Germany's carmakers and parts suppliers, including Volkswagen AG, BMW and Daimler AG were raided by the country's cartel authority following suspicions they had colluded when buying steel.


NYT

- The financial strains from Britain's vote to leave the European Union are starting to show, as worries ripple through the country's real estate market after three major real estate funds suspended payouts. http://nyti.ms/29h6jNg

- Hostess Brands LLC, the maker of Twinkies and Ding Dongs, said on Tuesday it has agreed to sell a majority stake in the company to a publicly traded affiliate of the Gores Group, an investment firm, for about $725 million. http://nyti.ms/29h61G5

- Bucking the trend of conserving cash at a time of low oil prices, the American oil giant Chevron said on Tuesday that it would go ahead with a $37 billion expansion of a gargantuan oil field on the Caspian Sea in Kazakhstan. http://nyti.ms/29h6aJz

- Twitter appointed Bret Taylor, a former senior executive at Facebook, to its board, continuing a makeover of its board of directors as it struggles to rev up its growth. http://nyti.ms/29h6iJf


Canada

THE GLOBE AND MAIL

** Centerra Gold Inc of Toronto, a miner looking for ways to lower its risk, has struck a $1.1 billion deal to buy Thompson Creek Metals Co Inc, a Colorado-based miner seeking relief from a mountain of debt. (http://bit.ly/29w1sZm)

** Meeting the demand by Unifor that Ford Motor Co's Canadian arm, Ford Motor Co of Canada Ltd, invest in its engine plant in Windsor will be a "challenge", company officials said on the eve of negotiations on a new contract with the union that represents 6,400 workers. (http://bit.ly/29w1Rv7)

** The federal government is taking steps to prevent First Nations children who fall ill on reserves from being denied proper treatment and medical supports because federal and provincial governments can't agree about who should pay. (http://bit.ly/29w2bKg)

NATIONAL POST

** Loblaw Cos Ltd President Galen Weston, who observed in May that consumers were getting fed up with rising food prices, now wants his company's largest suppliers to shoulder a bigger part of the inflationary burden. (http://bit.ly/29w2rsv)

** Two consultants who have done work for NewLeaf Travel Co Inc say the discount travel company owes them tens of thousands of dollars, raising concerns about the airline's financial position as it gets set to offer its first flights later this month. (http://bit.ly/29w2zIC)

** Canada's most expensive market for homes shows no signs of slowing down as June results outpaced a torrid May. The Real Estate Board of Greater Vancouver said it was the best June on record for existing home sales and price increases were escalating on a year-over-year basis. (http://bit.ly/29w2G6W)


Britain

The Times

The Bank of England has given the UK economy a £150 billion ($194.48 billion) shot in the arm by relaxing financial regulations on Britain's lenders in its latest attempt to cushion the blow from last month's Brexit vote. (http://bit.ly/29hxROL)

Imagination Technologies, the company behind the graphics processors used in the iPhone, has slumped to its largest annual pre-tax loss of £63 million ($81.68 million).(http://bit.ly/29oMeU4)

The Guardian

The fallout from the Brexit vote reverberated through the markets on Tuesday as two City property funds - M&G Investments and Aviva Investors - barred investors from withdrawing their cash and the Bank of England warned that risks to the financial system had begun to "crystallise". (http://bit.ly/29ueRBb)

Tina Green, the wife of retail tycoon Philip Green, has defended their use of companies based in tax havens, praising their "strong regulatory regimes". (http://bit.ly/29oNbeZ)

The Telegraph

ITV has set itself on a collision course with its biggest shareholder after the British government announced it will scrap laws that guarantee Virgin Media free access to its main channel. (http://bit.ly/29MvGTS)

Mike Coupe, the boss of Sainsbury's, has warned that Britain "is in danger of talking itself into a recession" following the country's reaction to the vote to leave the European Union. (http://bit.ly/29lYEga)

Sky News

The Virgin tycoon, Richard Branson, has held secret talks with Prime Minister hopeful Theresa May in an effort to boost his plea for a second referendum on the UK's membership of the European Union. (http://bit.ly/29dXu1z)

Lloyds Banking Group has appointed Eduardo Stock da Cunha, a Portuguese national, as its new head of corporate development with a brief to head its mergers and acquisitions strategy. (http://bit.ly/29LGfGX)

The Independent

U.S. and European banks could end up $165 billion worse off after Britain's historic decision to leave the EU, according to a model set up by economists at the New York University Stern Business School. (http://ind.pn/29lwnnw)

The pound has fallen below $1.31 for the first time in 31 years amid growing concerns about the financial stability of the UK after the decision to leave the EU. (http://ind.pn/29lmAhg)

http://www.zerohedge.com/news/2016-07-06/frontrunning-july-6
 

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#13
"We've Never Had A Shock To The System Like This" - Global Selloff Accelerates On Brexit, Italy, "Unknown" Fears


by Tyler Durden
Jul 6, 2016 7:03 AM

The flight to safety following last week's quarter-end window dressing is accelerating, with constant news and flashing red headlines of record low yields across DM government bonds once the norm, and as of moments ago Denmark's 10Y bonds joined the exclusive club of sub-zero yields; gold has soared to fresh multi-year highs above $1,370, the risk-off currency, the Yen, soaring and sending the USDJPY just above 100, while sterling crashed overnight once again below 1.27, levels not seen since 1985.

European banks continue to struggle and while Monte Paschi was halted up 10% earlier following the previously halted shorting ban, both Deutsche Bank and Credit Suisse have plunged to new all time lows, this time on concerns that the two trouble banks could be forced out of the Stoxx 50 Europe index according to an LBBW analysis while BlackRock cutting the region’s shares to underweight, with a negative view on the euro area’s banking sector, did not help. To be sure, all eyes remain on both Italian banks as well as UK property funds, where the announcement of more gating is widely perceived as imminent.

Indeed, as Bloomberg summarizes, it’s safety first for investors around the world as Brexit, no longer a risk on catalyst as it was a week ago, has instead become a reason to offload risk. Demand for haven assets sent bond yields to record lows after Federal Reserve Bank of New York President William Dudley said Brexit’s significance could escalate if it triggers turmoil in markets beyond the U.K.

Based on overnight analyst quotes, the euphoria is certainly gone by now: “Everyone is trying to react to a situation we’ve never been in before,” said Stewart Richardson, chief investment officer at RMG Wealth Management in London. “We’ve had shocks to the system before, but we haven’t had one like this. And we won’t know the answers for a long time.”

Mitsuo Shimizu, deputy general manager with Japan Asia Securities, also opined saying that there are “fears the global economy will worsen due to Europe. The U.K.’s economic outlook is blurred with uncertainty and the pound’s recent weakness is likely to encourage speculative buying in the yen.”

After rallying last week on bets central banks will work to limit the fallout from Britain’s referendum, global equities are retreating again as the knock-on effects become evident and as central bank credibility and efficiency is once again questioned. Three asset managers froze withdrawals from U.K. real-estate funds on Tuesday following a flurry of redemptions and the Bank of England relaxed capital requirements for lenders. Societe Generale SA Chairman Lorenzo Bini Smaghi said a banking crisis in Italy, stoked by the referendum, could spread to the rest of Europe and rules limiting state aid to lenders should be reconsidered.

As noted earlier, yields continue to plunge: 10-year US Treasury yields fell as much as six basis points to 1.318% and was at 1.33% at 10:44 a.m. London time. Yields on 10-year government bonds in Australia, Japan, Germany, France and the U.K. also sank to records. The strength of the gains in government bonds is leaving investors to ponder how severe the fallout from Brexit is going to be. Securities in the Bloomberg Global Developed Sovereign Bond Index, with an average life of about 10 years, yield a record-low 0.40 percent. In Germany, the 10-year bund yield fell to minus 0.205 percent, while yields on similar-maturity French and British securities reached 0.101 percent and 0.729 percent, respectively.

Expect yields to continue plunging: declining prospects of a Fed rate hike have spurred a torrent of demand for Treasuries, with almost $10 trillion of securities in the Bloomberg Global Developed Sovereign Bond Index yielding less than zero, up from about $9 trillion a week ago. In addition to experimenting with negative rates, some monetary authorities abroad are buying government debt, reducing the supply for investors who count on fixed-income assets.

“In the risk-off environment produced by international events, there is a global rush to buy super-long sovereign debt, and bonds that still offer some yield are going to be most in demand,” said Hideo Suzuki, the chief manager of foreign exchange and financial products trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo.

And while until recently bonds and stocks had disconnected, as of this moment, plunging yields finally means sliding stocks as well. The MSCI All-Country World Index dropped 0.7% and the Stoxx Europe 600 Index slid 1.4 percent, falling for a third day, with all its industry groups declining. Automakers and insurers were the biggest losers, while Tullow Oil Plc sank 14 percent after announcing a $300 million sale of convertible bonds. The Stoxx 600 trades at around 14 times estimated earnings, near its lowest valuation since 2012 relative to the global index.

Deutsche Bank AG led losses in a gauge of European lenders as BlackRock Inc. cut the region’s shares to underweight, with a negative view on the euro area’s banking sector, amid the Brexit fallout. The Italian market regulator banned short selling on Banca Monte dei Paschi di Siena for Wednesday’s session, prompting a rally of 9 percent -- after it slumped 31 percent in the past two days. The MSCI Emerging Market Index dropped 1.4 percent, falling for a second day. Shares in South Korea slid 1.9 percent and Taiwan’s benchmark slid 1.6 percent. Many markets across Asia and the Middle East were closed for religious holidays.

Finally, the US:
  • S&P FUTURES NEAR SESSION LOW, -14PTS, AS EU STOCKS EXTEND DROP
At this rate the Fed's biggest flip-flopper and stock market supporter, Jim Bullard, may want to wake up: the futures will need his jawboning support soon.

* * *

Market Snapshot
  • S&P 500 futures down 0.7% to 2069
  • Stoxx 600 down 1.3% to 320
  • FTSE 100 down 0.6% to 6507
  • DAX down 1.8% to 9357
  • German 10Yr yield down 2bps to -0.2%
  • Italian 10Yr yield down 5bps to 1.22%
  • Spanish 10Yr yield down 4bps to 1.15%
  • S&P GSCI Index down 0.6% to 362.1
  • MSCI Asia Pacific down 1.1% to 129
  • Nikkei 225 down 1.9% to 15379
  • Hang Seng down 1.2% to 20495
  • Shanghai Composite up 0.4% to 3017
  • S&P/ASX 200 down 0.6% to 5198
  • US 10-yr yield down 6bps to 1.32%
  • Dollar Index up 0.1% to 96.27
  • WTI Crude futures down 1.2% to $46.03
  • Brent Futures down 0.8% to $47.57
  • Gold spot up 1.1% to $1,371
  • Silver spot up 2% to $20.34
Global Headline News:
  • Melrose to Buy Ventilation Fan-Maker Nortek for $2.8 Billion: Plans fully underwritten rights offering of 1.6 billion pounds. Shareholders offered a 38% premium over Nortek’s closing price
  • RBS, Lloyds Most Exposed to Commercial Property, JPMorgan Says: Smaller lenders at more risk due to greater leverage on debt. Asset managers freeze real-estate fund withdrawals post-Brexit
  • BlackRock Cuts European Equities to Underweight Citing Brexit: BlackRock downgrades European stocks to underweight, with a negative view on the euro-zone banking sector, and upgrades U.S. credit and EM debt to overweight, according to note
  • It’s Dollar’s Time Now Post-Brexit, Top Currency Forecaster Says: Julius Baer says greenback’s fortunes to ‘change massively’. It was among the biggest pound bears in the run- up to EU vote
  • Italy Could Spark Systemic Banking Crisis: SocGen Chairman: Italy’s banking crisis could spread to rest of Europe; rules limiting state aid to lenders should be reconsidered, says Lorenzo Bini Smaghi on Bloomberg TV
  • Fed Minutes Could Still Hold Important Clues Post-Brexit Vote: Economists cite shift in FOMC tone even before U.K. vote. Record could reveal crucial discussions on jobs, neutral rate
Looking at regional markets, Asia conformed to the downbeat tone seen across global markets in which Wall Street snapped its 4-day advance as ongoing Brexit fears spilled-over and dampened sentiment. Nikkei 225 (-1.9%) underperformed amid a firmer JPY as USD/JPY traded with a 100.00 handle, while the ASX 200 (-0.6%) suffered from the downturn in energy. Chinese markets were also pressured with the Shanghai Comp (+0.4%) weighed following a weak liquidity injection for a second consecutive day. 10-year JGBs benefited from the risk-averse sentiment seen in Japan and traded higher alongside the 10yr and 20yr yields printing fresh lows, while the BoJ also entered the market to acquire JPY1.27tIn worth of government debt. S&P stated that China's economic growth trajectory is worrisome over the mid-term.

Top Asian News
  • Yuan in Longest Losing Streak Since February as Forecasts Cut: China is using opportunity to engineer currency decline, RBC says
  • Japan Pension Whale’s Stock Losses Force More Buying, Bond Sales: Fund could buy $41b in Japanese shares, analyst says
  • Japan 20-Year Yield Goes Negative as Treasuries Rally to Record: Japanese, Aussie 10-year yields drop to unprecedented levels
  • Hong Kong Hedge Fund Adds to Baidu, Samsonite After Brexit: Manas also added to Delfi shares, which surged 38% on June 30
  • China Resources Beer to Raise $1.2 Billion From Rights Offer: Proceeds to finance buyout of Chinese venture with SABMiller
European equities slipped this morning with weakness yet again stemming from financial names, as such the Swiss banking giant Credit Suisse (-2.2%) has now fallen to its lowest level since 1989 with Deutsche Bank (-5.4%) also feeling the squeeze amid the continued uncertainty sparked by the fallout from Brexit. While property names have also been pressured with more fund managers announcing yesterday that they were halting there UK real estate funds. Additionally, Italian banks remain in focus in particular Banca Monte dei Paschi which has fallen around 20% since the beginning of the week, in turn the Italian regulator Consob has placed a temporary ban on Banca Monte dei Paschi, which has seen shares higher by over 10%. In credit markets, the fall in global bond yields persists with yields in the German 10-yr benchmark declining to a record low -0.19%, in turn prices have briefly moved above 168.00 . Alongside this the German yield curve has seen some notable curve flattening.

Top European News
  • Swedish Central Bank Delays Rate Increase Plans After Brexit: Bank says rate increase now seen in second half of 2017. Riksbank keeps QE program unchanged for second half of 2016
  • Italy Could Spark Systemic Banking Crisis, SocGen Chairman Says: Italy’s banking crisis could spread to the rest of Europe and rules limiting state aid to lenders should be reconsidered
  • Morgan Stanley Sees Further Potential U.K. Property Fund Stress: U.K. property funds could come under further stress after a surge in redemptions following the country’s vote to leave the European Union caused three asset managers freeze their holdings
  • From Paris With Love: France Woos U.K. Business Post Brexit: Paris Region lays out case for moving jobs to French capital. Former Sarkozy minister seeks tax advantages for foreigners
  • Carney’s Crisis Management Gives U.K. Only Plan to Work With: In post-vote tumult, governor emerges as anchor of stability. Global officials blindsided by British decision to leave EU
In FX, the pound sank to a fresh 31-year low of $1.2798 before climbing back toward $1.30. The yen jumped 1.2 percent to 100.54 per dollar, taking its advance since Britain’s referendum to more than 5 percent. “The yen is taking the brunt of the pound selling,” said Takuya Kawabata, an analyst at Gaitame.com in Tokyo. “It’s a risk-off market triggered by the pound. We need to continue to remain wary of risk aversion prompted by the U.K.” The currencies of New Zealand. Russia and South Africa -- commodity-exporting nations -- all dropped by at least 0.5 percent. South Korea’s won led declines in Asia, sinking 0.9 percent versus the greenback. The yuan dropped as much as 0.2 percent to a five-year low of 6.6980 per dollar after ABN Amro Bank NV, Credit Agricole CIB and Goldman Sachs Group Inc. cut forecasts for the currency on Tuesday. An index tracking the yuan versus 13 peers fell for eight of the nine days since Britain’s referendum, spurring speculation China is seeking to weaken it amid the risk of a slowdown in the EU.

In Commodities, precious metals surged as investors piled into haven assets. Gold advanced as much as 1.1 percent to $1,371.39 an ounce in London, the highest level since March 2014. Silver gained as much as 2.9 percent. Most industrial metals declined, with copper falling 1.5 percent to $4,744 a metric ton and lead dropping 1.6 percent. Nickel gained 0.4 percent on concern that supply could be disrupted in the Philippines, the world’s biggest producer of nickel ore. West Texas Intermediate crude slipped 0.4 percent in London to $46.40 a barrel after closing Tuesday at a one-week low.

On today's US calendar, the highlight is the ISM non-manufacturing print which is expected to come in at 53.3 after printing at 52.9 in May. Also due out is the May trade balance reading and the final June PMI revisions (services and composite). Later this afternoon we get the FOMC minutes from the June meeting which we expect to strike a relatively cautious tone. Remember that this meeting was pre-Brexit. Away from the data the ECB’s Draghi is due to speak this morning in Frankfurt while the Fed’s Tarullo is due to speak (at 2.00pm BST) on regulation and monetary policy.

Bulletin Headline Summary from RanSquawk and Bloomberg
  • Risk sentiment guides action in Europe with financial names feeling the squeeze from continued downbeat investor sentiment
  • GBP/USD printed a fresh low overnight to briefly break below 1.2800 before being granted some reprieve and meeting resistance at 1.3000
  • Looking ahead, highlights include FOMC minutes, US Services PMI, Trade Balance and a host of central bank speakers
  • Treasuries rally overnight on continued flight to quality flows, with 10Y yield reaching all-time lows, as global equities, commodities (except gold) all dropping; FOMC minutes released at 2pm ET.
  • While U.K. Brexit vote spurred many forecasters to revise their Fed calls -- with Morgan Stanley among those now saying nothing will happen before 2018 -- BofAML, Citi, Deutsche Bank, Goldman Sachs and JPMorgan still think Fed will raise rates this year, in Dec., while Barclays maintains call for Sept. hike
  • Italy’s banking crisis could spread to the rest of Europe and rules limiting state aid to lenders should be reconsidered, Societe Generale SA Chairman Lorenzo Bini Smaghi said
  • As Italy considers options to recapitalize its banks, the Texas ratio, a measure of bad loans as a proportion of capital reserves, illustrates the scale of the problem
  • Mark Carney has unveiled his four-point plan to cope with the Brexit crisis and it’s just about the only one Britain has to go on
  • Royal Bank of Scotland and Lloyds Banking Group are the two major U.K. lenders most exposed to the commercial real estate market, which poses a risk for banks after asset managers froze withdrawals from property funds, JPMorgan said
  • German factory orders unexpectedly failed to rise in May as uncertainty over the global outlook deterred demand for goods. Orders, adjusted for seasonal swings and inflation, were unchanged from April, when they fell a revised 1.9%
  • In the background of another epic bounce for U.S. stocks was the bull market’s oldest friend: buybacks. American companies announced $52 billion of repurchases last week alone. That pushed total buybacks in June to more than $65 billion, the most since February
  • Battered Tokyo stock investors may find savior in an old friend: the world’s biggest pension fund. Because shares held by Japan’s $1.4 trillion Government Pension Investment Fund have suffered such large losses, it will need to add to those holdings to meet targets for their weighting
  • Japan’s 20-year government bond yield dropped past zero for the first time as ultra-low yields worldwide failed to deter investors from rushing to buy the safest assets
  • Bank of America Corp. sees the $3 trillion U.S. corporate pension industry throwing its interest-rate assumptions out the window. And that means the retirement plans will probably throw more money into Treasuries
* * *

US Event Calendar
  • 7:00am: MBA Mortgage Applications, July 1 (prior -2.6%)
  • 8:30am: Trade Balance, May, est. -$40b (prior -$37.4b)
  • 9:45am: Markit U.S. Services PMI, June F, est. 51.3 (prior 51.3); Markit US Composite PMI, June F (prior 51.2)
  • 10:00am: ISM Non-Manufacturing Composite, June, est. 53.3 (prior 52.9)
* * *

DB's Jim Reid concludes the overnight wrap:

At the start of this week we thought that the Brexit news flow would slow down a little, with Italian banks in the spotlight and focus gradually moving onto the data, especially Friday's payroll report. However the news over the last 24 hours or so that three UK commercial property funds worth £9.1bn have suspended redemptions reminds us of the various ways Brexit can impact markets and has people fearful of more stress to come. Indeed the moves also hammer home the vulnerable position that commercial real estate in the UK now sits in following the vote outcome and it wouldn’t be a great surprise to see similar moves by other funds in the coming days and weeks. Funds, diversified financials and insurers were hit hard yesterday as a result. L&G (-7.11%), Hargreaves Lansdowne (-5.70%), Standard Life (-5.20%), Schroders (-5.07%), Prudential (-4.48%) and Aviva (-3.94%) all stood out on a day that the FTSE 100 actually closed up +0.35% despite markets elsewhere tumbling.

That relative outperformance had alot to do with the latest sharp leg lower for Sterling. Indeed the Pound tumbled -1.99% yesterday versus the USD and is down another -1.21% this morning at 1.2864 – the lowest post Brexit and the lowest since 1985. Along with the property redemption freeze news the latest moves also came following the comments from BoE Governor Carney yesterday who warned that ‘there is the prospect of a material slowing of the economy’ and that the financial risks of Brexit ‘have begun to crystallise’. Carney and the Financial Policy Committee also announced that they are reducing the countercyclical capital buffer to 0% from 0.5% of risk weighed assets which is said to raise lending capacity ‘by up to £150bn’.

All of this culminated in a much weaker day for risk overall. European stocks fell for a second consecutive session with the Stoxx 600 closing -1.70% and the DAX -1.82%. The FTSE 250 also fell -2.37%. Across the pond the S&P 500 returned from the long weekend holiday with a -0.68% loss although it did benefit from a slight bounce into the close. Oil markets didn’t help after WTI tumbled nearly 5% and back below $47/bbl for the first time since Monday last week. Meanwhile Gold (+0.42%) benefited from the flight to safety while core global bond yields hit fresh record lows across the board. 10y Gilt yields fell over 6bps and closed at 0.768% and 30y yields fell nearly 7bps to 1.583% - both the lowest on record. 10y Bunds moved deeper into record negative territory (4.4bps lower to -0.186%) with the curve now negative out to 15 years.

Danish 10y yields turned negative (-0.006%) while bonds in Netherlands (0.020%), Finland (0.072%) and Sweden (0.080%) moved one step closer. It was much the same in the Treasury market where 10y Treasuries tumbled nearly 7bps and along with the move this morning (another 3.2bps lower) are now hovering at 1.343% and the lowest yield on record. This unchartered territory means the 10y is now down a fairly incredible 40bps from its pre referendum poll level on the 23rd.

Taking a look at the rest of markets this morning and with Sterling and bond yields extending their moves lower (20y JGB’s have now gone to below 0%), equities markets are following suit in Asia with almost all major bourses in the red. The Nikkei (-2.96%) has seen the heaviest fall followed by the Kospi (-2.03%) and Hang Seng (-1.92%) while the ASX and Shanghai Comp are -1.36% and -0.18% respectively. EM FX is under pressure while the risk off moves has helped the Yen to gain 1%. Credit markets are a couple of basis points wider while US and UK equity index futures are down half a percent.

Moving on. The latest news out of Italy and specifically the banking sector concentrated on a Bloomberg story suggesting that the Italian government is looking at potentially invoking an EU rule stipulating the allowance of temporary state aid should regulatory stress tests uncover a shortfall. It’s hard to gauge the reliability of the story so we’re taking it with a pinch of salt for now. So with political risk rife, yesterday Hungary announced that it is to hold a referendum on October 2nd concerning the plan to share the burden of refugees across the EU. Prime Minister Orban’s right wing government has previously opposed the plans of reallocation of large numbers of migrants across the EU. President Ader announced that the question asked will be “Do you want the EU to be entitled to prescribe the mandatory settlement of non-Hungarian citizens in Hungary without the consent of parliament?”. Interestingly the timing of the vote comes on the same day that Austria will be re-running the presidential election which itself carries its own level of uncertainty.

Moving onto credit, yesterday we published a 'Credit Bites' reviewing EUR and GBP corporate IG issuance YTD. After the slowest start of the year in over a decade, we have now seen very strong overall EUR IG issuance YTD. In the non-bank senior space (ECB CSPP universe), record run rates have been reached. Less than 4% (€241mn) out of €6.4bn of ECB CSPP purchases settled in June originated from the primary market. However, issuance with June settlement after the purchases started was relatively limited. We expect a notable pick-up in primary purchases by the Eurosystem over the coming months, particularly after the summer lull, with the CSPP eliciting a supply response. Given the rise in uncertainty following the Brexit vote, the notable drop in GBP issuance by non-UK corporations is likely to continue. The GBP market has been in relative supply decline for years but Brexit created an extra dent, at least for now. See the report out yesterday afternoon or email Michal.Jezek@db.com if you didn't get a copy.

As has been the case recently the macro data came off second best yesterday to the focus on the Brexit-driven fallout in markets. The data that we did get in the US however was reasonably soft. The IBD/TIPP economic optimism reading for July fell 2.7pts from June to 45.5 (expectations were for no change) which is the lowest level since November last year and further evidence of the drop off in confidence post Brexit. Meanwhile factory orders declined a little more than expected in May (-1.0% mom vs. -0.8% expected) while the final headline durable goods orders reading for May was revised down another tenth to -2.3% mom.

Over in Europe we received the final PMI revisions for June. The Euro area services reading was nudged up 0.4pts to 52.8 which, when taken with the manufacturing reading, saw the composite print revised up to 53.1 from 52.8 and so making it unchanged from May. Regionally Germany saw a 0.3pt upward revision to the composite to 54.4 while France had a 0.2pt upward revision to 49.6. Italy’s composite printed at 52.6 (from 50.8 in May) after getting a boost from the services sector while the composite reading for the UK declined 0.6pts to 52.4, although that was a little better than expected. Importantly our European economists note that all of the responses in the manufacturing survey (data collected 13-23 June) and 90% of those for the services (13-27 June) were collected before the result of the UK EU referendum and so that leaves these PMI’s, as well as the May retail sales data for the Euro area (+0.4% mom) as less relevant than usual. The July flash PMI’s which get released on the 22nd of this month (and the day after the ECB policy meeting) will provide us with the earliest snapshot of the Brexit impact.

In one final mention of Brexit for today, we also heard from a couple of Fedspeakers yesterday on the subject and how that impacts their outlook for the US economy. San Francisco Fed President Williams (centrist to slightly dovish) said that he sees Brexit, as it has played out so far ‘as being a relatively modest risk to the US outlook’. He also reiterated that a Fed rate hike this year could still be warranted should the data come in consistent with his outlook. The NY Fed President Dudley (dovish) was a lot more cautious. He said that while it’s still early days to fully grasp the consequences of Brexit, ‘if there is broad contagion through financial markets’ and ‘if it leads to greater consequences about the stability of the EU, then it could have significant consequences.

Looking at today’s calendar, it’s a quiet day for data in Europe this morning with German factory orders for May the only release of note. Over in the US the highlight is the ISM non-manufacturing print which is expected to come in at 53.3 after printing at 52.9 in May. Our US economists are expecting a 53.0 print. Also due out this afternoon is the May trade balance reading and the final June PMI revisions (services and composite). Later this afternoon we get the FOMC minutes from the June meeting which we expect to strike a relatively cautious tone. Remember that this meeting was pre-Brexit. Away from the data the ECB’s Draghi is due to speak this morning in Frankfurt while the Fed’s Tarullo is due to speak (at 2.00pm BST) on regulation and monetary policy.

http://www.zerohedge.com/news/2016-...elloff-accelerates-brexit-italy-unknown-fears
 

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Nothing to see. Best bet (if interested) is to listen in one window, play around on GIM or surf the web in another window.

Gregory Mannarino-When Debt Bubble Pops Millions Will Die
Greg Hunter


Published on Jul 5, 2016
Financial analyst Gregory Mannarino contends, “We are in uncharted territory. It’s occurring right under everybody’s nose. Barely anyone is aware of what is going on because it’s not getting any media coverage. There is this phenomenon where trillions of dollars of currency are being moved or rushing towards the debt market that is squeezing bond yields to historic lows. We are making history in the United States for the second week in a row, and I am talking about the bond market. Last week, we hit an historic low with regard to yield. People are so desperate, people are so desperate they are willing to accept negative returns. This is how desperate they are. . . . This is, and I can’t stress this enough, this is the biggest red flag I can possibly imagine. We are on the cusp of some event that is going to change the landscape of the world.”

The other warning sign that something is very wrong can be seen in the price of gold and silver. Mannarino says, “Both gold and silver, since the beginning of this year, have taken off like rockets, and they are not going to stop. This environment is on the edge. . . . These are monetary metals. People refer to them as precious metals. They are real money, and they have been real money for thousands of years. No central banker is going to make it different just by saying they are not money. The system is illiquid, and the banks are insolvent.”
The real cost will be in lives lost. Mannarino contends, “We have seen debt rise in tandem with human population. We understand the debt is not sustainable, and we understand the world central banks are going through very desperate measures to try to keep that debt bubble sustained. The debt bubble is the greatest threat to humankind—bar none. It is greater than a nuclear exchange. There is going to be a point when we cannot borrow anymore from the future. When that happens, the debt bubble pops, and we get a correction in human population. Millions and millions of people are going to die.”

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Gregory Mannarino, founder of TradersChoice.net.

All links can be found here: http://usawatchdog.com/collapse-of-em...
 

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Nothing to see. Best bet (if interested) is to listen in one window, play around on GIM or surf the web in another window.

Brexit To Catalyze Economic Collapse? | David Kranzler
FinanceAndLiberty.com


Published on Jul 5, 2016
IN THIS INTERVIEW:
- What the elites lost because of Brexit ►0:52
- Will Brexit be prevented? ►4:11
- Will gold manipulation be stopped? ►5:12
- Why is George Soros buying gold? ►8:07
- Is Brexit a distraction from more important issues? ►9:29
- The economy is collapsing ►13:58
- Banks are in a lot worse shape than meets the eye ►18:14
- Will the next crisis more catastrophic than 2008? ►21:04
- What assets might withstand the collapse of the financial system? ►25:31

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
Sponsors: http://SilverDoctors.com & http://ReluctantPreppers.com

This interview was recorded on June 30, 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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Nothing to see. Best bet (if interested) is to listen in one window, play around on GIM or surf the web in another window.

Mornings With "V" (07/06/2016)
ROGUE MONEY


Streamed live 2 hours ago
V runs down the latest gambit of news.
 

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5 Reasons Not To Invest In Gold - Debunked
SalivateMetal


Published on Jul 5, 2016
An article criticizing gold is analyzed and debunked, just for fun. Can you do one of these two things for me?
1) Post a comment
2) type something below.
I'll let you decide which one you want to do. I can't make all the decisions for you.
 

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#25
Frontrunning: July 7


by Tyler Durden
Jul 7, 2016 7:42 AM

  • Global stocks and sterling bounce after Brexit bashing (Reuters)
  • FBI director to face Republican fire over Clinton email probe (Reuters)
  • UK's Hammond says Article 50 a decision for government, not parliament (Reuters)
  • GOP Puts Pressure on Clinton, FBI After Lynch Closes Email Probe (WSJ)
  • Gold’s Most Accurate Forecaster Says Prices May Go to $1,425 (BBG)
  • Central Banks Put Squeeze on Sovereign-Debt Market (WSJ)
  • L&G's fund arm, F&C cut value of UK property funds (Reuters)
  • Danone Boosts U.S. Business With $10 Billion WhiteWave Deal (WSJ)
  • This Hedge Fund Wants to Use Atomic Clocks to Beat High-Speed Traders (BBG)
  • Cruel summer for U.S. refiners as margins tank (Reuters)
  • Populist Politicians Take On Italy’s Massive Debt Pile (BBG)
  • Anti-Donald Trump Forces See Convention Coup as Within Reach (WSJ)
  • Putin’s Military Buildup in the Baltic Stokes Invasion Fears (BBG)
  • JPMorgan could move thousands of staff out of UK (Reuters)
  • Citadel Names Microsoft’s COO Turner to Head Securities Unit (BBG)
  • Sovereign downgrades hit new record (FT)
  • Migrants put Sweden's cozy Nordic Model under pressure (Reuters)
  • Revving Up Oil Fields Won’t Be So Easily Done (WSJ)
  • New products help PepsiCo inch past revenue estimates (Reuters)
  • Wal-Mart in China faces employee protests (Reuters)

Overnight Media Digest

WSJ

- Republicans moved to keep alive a controversy they hope will work to their advantage, a day after the FBI's James Comey accused Hillary Clinton of being 'extremely careless' with national secrets. http://on.wsj.com/29y8U6b

- Enthusiasm for self-driving technology might be racing ahead of its capabilities. Some Tesla owners say Autopilot doesn't work well enough, while others say it has lulled them into potential danger. http://on.wsj.com/29P0BiL

- The U.S. Justice Department will take over the investigation of the fatal shooting of a black man by Baton Rouge police at point-blank range. A cellphone video taken by a bystander appears to show the victim, Alton Sterling, being held down by a police officer holding a gun to him, before shots are heard. http://on.wsj.com/29AwzCO

- Donald Trump's intra-party foes are close to having enough support on a key convention committee to force a vote that would throw open the presidential contest again. http://on.wsj.com/29PuHSU


FT

Two former Barclays Plc traders accused of libor-related offences face another trial after a London jury failed to reach a verdict.

Former British Prime Minister Tony Blair committed to an invasion of Iraq almost eight months before receiving parliamentary backing, a seven-year inquiry concluded.

Former Fox News host Gretchen Carlson filed a lawsuit against CEO Roger Ailes, alleging that she was fired for rebuffing his unwanted advances

NYT

- The Federal Reserve did not raise its benchmark interest rate in June because officials were worried that economic growth might be flagging, according to an official account published on Wednesday. http://nyti.ms/29yEhNO

- The Italian government, according to some estimates, needs to spend $45 billion to shore up its banks burdened with bad loans. Fears that European authorities will bar the government from providing that support are adding to the turbulence caused by Brexit. http://nyti.ms/29nKNrg

- Roger Ailes, chairman of Fox News, was accused on Wednesday of forcing out a prominent female anchor after she refused his sexual advances and complained to him about persistent harassment in the newsroom, a startling accusation against perhaps the most powerful man in television news. http://nyti.ms/29yfSs3

- Andrew Caspersen, a former Wall Street executive and scion of a wealthy family, pleaded guilty on Wednesday to federal charges that he defrauded friends, relatives and a hedge fund billionaire's foundation of nearly $40 million. http://nyti.ms/29s654F


Canada

THE GLOBE AND MAIL

** Jason Kenney did not step down as a member of Parliament when he officially launched his bid to lead Alberta's Progressive Conservatives - a decision fiscal hawks say is an inappropriate use of taxpayers' money. (http://bit.ly/29yEQHX)

** Seven Generations Energy Ltd is taking advantage of the industry downturn to buy assets from Paramount Resources Ltd for C$1.9 billion ($1.47 billion), vastly increasing its land holdings in the prolific Montney natural gas region of Alberta. (http://bit.ly/29yFyoc)

** As part of a flurry of moves designed to reverse its sliding share price, Dominion Diamond Corp is getting out of Toronto real estate and going ahead with a key expansion to its Ekati mine in the Northwest Territories. (http://bit.ly/29yEsJt)

NATIONAL POST

** Canada Life has been forced to suspend redemptions at two of its real estate funds due to uncertainty about the value of commercial property in the UK following the Brexit vote. (http://bit.ly/29yF1D5)

** The original fast-track approval process of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union has since been expanded to give the 28 EU member states the final approval - but the new, longer track won't bring the process to a halt. The signatories would need to agree to the trade pact provisionally, and then work out the details later. (http://bit.ly/29yG8Tc)

** Indigo Books and Music Inc, buoyed by a year of solid financial results while other large book chains have suffered and shut down, is focused on the "phygital" future, says chief executive Heather Reisman. (http://bit.ly/29yGt8x)


Britain

The Times

The Serious Fraud Office in Britain will call for a retrial of two former Barclays traders, Stylianos Contogoulas and Ryan Reich, after a jury failed to reach a verdict on whether they had been part of an international conspiracy to rig Libor. (http://bit.ly/29zXm1X)

The Brexit referendum appears to have slowed down car sales in Britain, with registrations in June falling for the first time since the depths of the global financial crisis downturn. Sales of cars in June dropped 0.8 percent to 121,500. (http://bit.ly/29zQim3)

The Guardian

The chairmen of the joint parliamentary committee investigating the demise of BHS have called for the Financial Reporting Council to investigate the work done by accountancy firm PricewaterhouseCoopers on auditing BHS and the rest of Philip Green's retail empire. (http://bit.ly/29zQZf1)

British companies could become prey for foreign predators, according to accountants at KPMG, which on Wednesday appointed a partner to take on the newly created role of head of Brexit. (http://bit.ly/29zS7Q6)

The Telegraph

BT faces a renewed attack from Sky over control of Openreach, after pensions experts and the former City minister Lord Myners said its 47 billion pound ($60.66 billion) retirement scheme would be unaffected by financial independence for the network unit. (http://bit.ly/29oWXfw)

The 20 billion pound ($25.81 billion) merger deal between the London Stock Exchange and Germany's Deutsche Boerse could run into trouble as the pair are believed to be braced for a row over the location of the joint entity's headquarters. (http://bit.ly/29zV6rz)

Sky News

The pound has plumbed new depths, as intensifying fears over the impact of Britain leaving the EU is causing investors to suspend trading in the UK commercial property market. The pound dipped below $1.28 for the first time since 1985 at one stage on Wednesday, before recovering slightly to close down 0.8 percent at $1.29. (http://bit.ly/29zUW3k)

Mastercard is facing a 19 billion pound ($24.52 billion) damages claim - the biggest in U.K. legal history - for allegedly imposing "anti-competitive" charges on consumers. (http://bit.ly/29zVOoJ)

The Independent

Sainsbury's has hinted that 600 head office jobs may be lost as it goes ahead with a 1.4 billion pound ($1.81 billion) deal to buy Home Retail Group. (http://ind.pn/29zWavt)

Italy's banking crisis could spread to the rest of Europe and rules limiting state aid to lenders should be reconsidered, Lorenzo Bini Smaghi, chairman of Societe Generale, has said. (http://ind.pn/29zWomt)

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

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#26
European Stocks Storm Higher As Bank Fears Subside; US Futures Flat


by Tyler Durden
Jul 7, 2016 6:43 AM

After yesterday's afternoon surge in US stocks, facilitated by the "uncertain" Fed's FOMC Minutes, today the rest of global market are playing catch up with European stocks rebounding from one week lows, snapping the longest losing streak in three weeks, as well as Asia where most stock markets climbed, led by gains among energy producers as crude prices advanced, while a stronger yen weighed on Japanese shares.

The Stoxx Europe 600 Index rose for the first time this week and emerging markets gained amid a subdued outlook for higher U.S. rates after Federal Reserve minutes showed officials were losing confidence in the economy’s ability to withstand a hike. Crude approached $48 a barrel, while gold neared a two-year high. The pound rebounded from a 31-year low.

Since bad news has again become great news for stocks, yesterday the S&P closed at 2,100 after Fed officialys admitted concerns that job creation was faltering as they kept rates unchanged the week before the U.K.’s referendum. Tomorrow's payrolls figures will be key to perceptions of where the Fed stands on its original plan to potentially raise rates twice this year.

“Markets are looking to nonfarm payrolls tomorrow as the first solid data point following the last Fed meeting to give guidance,” Daniel Murray, head of research at EFG London told Bloomberg. “There is that balancing act for the Fed in that they are quite right to be vigilant and observant of the U.K.’s position, but at the same time the direct impact on the U.S. economy is probably going to be quite small.”

But while there is hope that tomorrow's job number will provide some much needed direction, for now the key market moving catalysts are the constantly changing development in Italy's banking system, as well as the falling dominoes in the UK. As a result, while US stocks remain largely unmoved, the scramble into safe havens around the globe continues as shown in the chart below.




To be sure, the relentless volatility in markets, if only outside the US, is starting to get to traders and PMs: “The market can sway so violently either way these days,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit in Hellerup, Denmark. “You need to base the rally on something. What we need the most from policy makers is some sort of signal that we can handle European banks and that we will begin to address the U.K. situation. I’m more positive about the second half of the year, but I’m also hedging my bets. Like everyone else, I’m also buying gold.”

As of this moment, at least, the optimistic settlement has won out, and Europe's Stoxx 600 (which mysteriously "broke" during yesterday's selloff) climbed 1.5% in early trading, with all its industry groups up, after posting its longest losing streak in three weeks. Banks, which sank to their lowest prices since 2011, climbed 1.6 percent as a group.

Danone jumped 7% after agreeing to buy WhiteWave Foods Co., a U.S. maker of soy milk and plant-based foods, for about $10 billion. Associated British Foods Plc rallied 7.5% after raising its annual profit forecast, saying a weaker pound will boost the value of profits earned outside its home market. Marks & Spencer Group Plc fell 1.2 percent after reporting a deterioration in clothing sales.

The MSCI Emerging Markets Index gained for the first time in three days, rising 1 percent. Samsung Electronics Co. contributed the most to the advance, climbing 2 percent, after reporting its biggest operating profit in more than two years, bolstered by demand for its Galaxy S7 smartphones. Benchmarks rose more than 1 percent in Hong Kong, Russia, Poland and South Korea.

S&P 500 futures were little changed following a 0.5 percent advance in the U.S. benchmark on Wednesday.

In the all important government bond market, there were no new record low yields overnight, as the scramble into government paper moderated. German bonds fell, after 10-year yields touched the lowest level on record on Wednesday. The yield on similar-maturity Spanish bonds added four basis points to 1.21 percent while that on Italian 10-year bonds added three basis points to 1.28 percent. Japan’s two-year bond yield dropped one basis point to an all-time low of minus 0.345 percent. The nation’s 10-year rate was minus 0.28 percent, near the record of minus 0.285 percent reached on Wednesday.

The yield on U.S. Treasuries due in a decade increased one basis point to 1.38 percent, after sinking to an unprecedented 1.32 percent in the last session. Billionaire bond investor Bill Gross said Wednesday that sovereign bonds are “too risky” with yields in many developed markets near all-time lows.

On the US calendar the highlight is the ADP employment print ahead of tomorrow’s payrolls. Expectations for the ADP print are 160k although it’s worth highlighting that last month’s 173k reading severely overstated the May payrolls report. We’ll also get the latest initial jobless claims reading today. Away from the data we’re also due to hear comments from the ECB’s Lautenschlaeger and Constancio today.

Reports Thursday on June private payrolls from the ADP Research Institute and weekly jobless claims are the last employment data before the government monthly jobs report on Friday. American employers probably added 180,000 workers to payrolls in June, following an unexpectedly small increase of 38,000 in May, the least in almost six years, economists said before Friday’s report.

Market Snapshot
  • S&P 500 futures unchanged at 2094
  • Stoxx 600 up 1.5% to 324
  • FTSE 100 up 1.5% to 6562
  • DAX up 0.9% to 9462
  • S&P GSCI Index up 0.9% to 369.4
  • MSCI Asia Pacific up 0.3% to 129
  • Nikkei 225 down 0.7% to 15276
  • Hang Seng up 1% to 20707
  • Shanghai Composite down less than 0.1% to 3017
  • S&P/ASX 200 up 0.6% to 5228
  • US 10-yr yield up 1bp to 1.38%
  • German 10Yr yield up less than 1bp to -0.17%
  • Italian 10Yr yield up 2bps to 1.27%
  • Spanish 10Yr yield up 3bps to 1.2%
  • Dollar Index up 0.02% to 96.07
  • WTI Crude futures up 1.2% to $47.99
  • Brent Futures up 1.2% to $49.38
  • Gold spot up 0.2% to $1,367
  • Silver spot down less than 0.1% to $20.09
Top Global News
  • Danone to Buy U.S. Soy-Milk Maker WhiteWave for $10 Billion: WhiteWave is one of the fastest-growing U.S. food companies. French yogurt maker expects $300 million of synergies by 2020
  • Avast to Buy AVG for $1.3 Billion, Adding Security Software: Company seeks to tap into growing Internet of Things market. Deal pays 33% premium to AVG’s closing price in New York
  • Dimon Warns of Job Losses as Post-Brexit Property Pain Spreads: ‘A few thousand’ could be moved from U.K. if passporting lost. JPMorgan CEO sees possibility of reversing Brexit decision
  • McDonald’s Said to Narrow Bidders for $2 Billion China Franchise: Fast-food chain invites Cinda, Sanyuan to make binding offers. GreenTree Hospitality, Sanpower also among shortlisted bidders
  • Gross Calls Sovereign Bonds Too Risky With U.S. Yields Near Lows: Yield on World Sovereign Bond Index falls to less than 1%. Demand for debt is waning following plunge in yield, CIBC says
* * *

Looking at regional markets, as usual we start in Asia where stocks saw an improvement in risk appetite to trade relatively mixed following the gains in the US as an energy rebound underpinned sentiment although Nikkei 225 (-0.7%) lagged as JPY remained firm. ASX 200 (+0.6%) was boosted by the resurgence seen in energy in which WTI crude futures tested the USD 48/bbl level after the largest drawdown in API crude inventories since August 2015, while KOSPI (+1.1%) was led higher by the strong earnings guidance from Samsung. Chinese markets were mixed with the Hang Seng (-1.0%) lower and the Shanghai Comp (flat) unchanged despite the PBoC keeping its liquidity injections to a minimum and looks set for a significant net weekly drain, while increasing China NPLs also adds to the caution. 10-year JGBs traded higher amid the risk averse sentiment seen in Japan as yields continue to probe fresh record lows, while today's enhanced liquidity auction saw a better than prior b/c.

Top Asian News
  • Australia Dealt AAA Blow as S&P Cuts Outlook on Fiscal Gridlock: S&P gives one-in-three chance of downgrade within two years
  • Samsung Profit Tops Estimates as S7 Keeps Winning Customers: Marketing costs seen under control amid slowing sales growth
  • Top China Hedge Fund Seeks Help to Short Besieged Builder Vanke: Ze Quan manager borrowing Vanke shares in social media post
  • Mizuho to Bolster Small-Business Coverage With 200 More Bankers: Bank is chasing fees by advising SMEs on investing, growth
  • Temasek Assets Drop for First Time in Seven Years on China Rout: Singapore state firm boosts telecom, media, tech holdings
  • Yuan Tumbling Again Leaves Investors Unperturbed in Win for PBOC: Options market sanguine as PBOC seen improving communication
The European morning has seen upside in equities after the significant losses seen earlier in the week. Financials lead the way higher after the heavy losses seen yesterday , with Deutsche Bank trading higher by 1.6%, however still down over 4% over the past 2 days. Elsewhere on a sector breakdown defensive names lag Europe suggesting that this morning has seen a modest return of risk sentiment ahead of the North American cross over despite pulling off best levels in recent trade. The upside in equities filtered through to fixed income markets with Bunds trading in the red and modestly above 167.50 ahead of auctions from France and Spain, with the periphery soft ahead of the latter auction (relatively well-received) , allied with the ongoing political uncertainty. Separately, the long end of the German curve underperforms after the upside seen yesterday.

Top European News
  • ‘Panic’ Brexit Withdrawals Halt Four More U.K. Property Funds:
    Henderson, Columbia Threadneedle and Canada Life suspend funds. Aberdeen
    marks down value of U.K. property fund by 17%
  • U.K. Industrial Output on Course for Positive Second Quarter: Production falls 0.5% in May, less than economists predicted. U.K. economy has yet to feel the impact of Brexit vote
  • German Industrial Output Unexpectedly Drops in Sign of Slowdown: Production declined 1.3% in May vs. estimated 0.1% gain. U.K. decision to leave the EU could curb German growth
  • Italy-EU Bank Talks Said Stuck Over Investor Burden Sharing: Government seeking to use precautionary recapitalizations. Italy could inject as much as 5 billion euros in Monte Paschi
  • Marks & Spencer Sales Slump Worsens, Adding to CEO Challenge: General-merchandise sales decline is steepest in eight years. New CEO Rowe cut prices on about 1,000 items in the quarter
In FX, the yen strengthened 0.4 percent to 100.95 per dollar, taking its post-Brexit rally to more than 5 percent. Bank of Japan Governor Haruhiko Kuroda said in a speech to his bank’s branch managers Thursday that the country’s consumer-price index is likely to remain slightly negative for the time being. He also said he is monitoring risks and will add stimulus should it be required. The pound rose 0.5 percent, rising above $1.300 briefly, after touching $1.2798 a day earlier. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell for a second day, declining 0.2 percent following a 0.2 percent drop on Wednesday. Futures put the probability of the Fed raising interest rates by December at 12 percent, down from 50 percent at the time of the U.K.’s June 23 referendum. The Fed minutes “play into our core view that the Fed will now delay a further rate hike until December, at the earliest,” Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd., said in an e-mail to clients. “The market is certainly pricing in ‘gradual’ rate hikes.” The MSCI Emerging Markets Currency Index advanced 0.4 percent, headed for its first increase in four days. South Korea’s won jumped 1 percent, and South Africa’s rand gained 0.4 percent. China’s yuan strengthened 0.16 percent, after sliding to the lowest level since November 2010 on Wednesday. New Zealand’s dollar strengthened 1.1 percent after central bank Deputy Governor Grant Spencer said further interest-rate cuts could pose a risk to financial stability

In commodities, oil extended gains as API data showed the nation’s crude stockpiles dropped by 6.7 million barrels last week, the biggest drop in years. The U.S. Energy Department will release its own inventory data at 4 p.m. New York time Thursday. West Texas Intermediate rose 1.1 percent to $47.96 a barrel and Brent gained 1.1 percent to $49.34. Gold rose 0.2 percent to $1,366.55 an ounce, extending gains from the highest closing price in three months. The price of bullion is 1.8 percent short of a two year high. Corn, which entered a bear market on Tuesday, rose for the first time in seven days. The price climbed 0.6 percent to $3.43 a bushel in Chicago.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities have been granted some reprieve ahead of the US entrance to market as financial names recoup some of their recent losses
  • The apparent modest return to risk has filtered through to FX markets with USD/JPY moving back above 101.00
  • Looking ahead, highlights include US Challenger job cuts and ADP employment and DoE crude oil inventories
  • Treasuries mostly lower in overnight trading while global equities, oil and gold higher; the pound rises to ~1.30 to the USD.
  • U.K. property funds with about 18 billion pounds ($23.4 billion) of assets froze withdrawals as investors sought to dump real estate holdings in the aftermath of Britain’s vote to leave the European Union
  • JPMorgan Chase CEO Jamie Dimon warned he may relocate “a few thousand” of his employees from the U.K. if the country’s divorce settlement with the European Union hurts banks
  • U.K. business confidence sank to a 4 1/2-year low in the days after Britons voted to leave the European Union, adding to evidence that the decision is blighting growth
  • Talks between Italy and the European Commission to recapitalize Banca Monte dei Paschi di Siena SpA and other banks are stuck on whether creditors should face losses if taxpayer funds are used
  • China’s foreign-exchange reserves unexpectedly increased by $13 billion to $3.21 trillion in June as haven assets such as the Japanese yen appreciated amid the U.K.’s decision to leave the EU
  • Brazil’s biggest banks have shrunk their derivatives positions by more than 1.3 trillion reais ($400 billion), backing off of bets that have hefty capital requirements as volatility increases and bad loans weaken their balance sheets
  • The Federal Reserve is losing confidence in its need to tighten any time soon as officials face rising uncertainty about the outlook for growth at home and abroad
  • German industrial production dropped 1.3% m/m in May, the most in 21 months, in a sign that the headwinds from a global economic slowdown and political uncertainty in Europe damped activity
  • S&P Global Ratings cut the outlook on Australia’s AAA credit rating to negative from stable as it warned the prospect of fiscal-policy gridlock could thwart government attempts to rein in a budget deficit
  • Global gold holdings topped 2,000 metric tons for the first time in three years as the Brexit fallout and speculation that U.S. interest rates won’t rise anytime soon sent investors hunting for a haven
US Event Calendar
  • 7:30am: Challenger Job Cuts y/y, June (prior -26.5%)
  • 7:30am: ECB issues account of monetary policy meeting
  • 8:15am: ADP Employment Change, June, est. 160k (prior 173k)
  • 8:30am: Initial Jobless Claims, July 2, est. 269k (prior 268k)
  • 9:45am: Bloomberg Consumer Comfort, July 3 (prior 43.9)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural-gas storage change
  • 11am: DOE Energy Inventories
DB's Jim Reid concludes the overnight wrap

The tally of UK property funds suspending redemptions this week increased to 7 yesterday with Bloomberg suggesting that this covers more than £15bn of assets. The total size of the retail UK commercial property market is around £25bn according to the FT so more than 60% of it has been gated in 3 days this week. The news of the latest fund added to that list came late last night and it generated a few headlines as, alongside a 24 hour redemption freeze being put in place, the fund also announced that it will make a ‘dilution adjustment’ to the fund which lead to a 17% decline in the funds’ dealing price.

Property is an illiquid asset and this week shows what can happen to illiquid assets when the fundamentals/facts change. Given the illiquidity of many other financial markets these days due to post crisis regulations this is perhaps a glimpse of what the future might hold in the next recession for other assets. That's a story for another day but it's been another tricky 24 hours for UK property related assets, Sterling and European bank shares. Indeed despite holding in relatively well on Tuesday the FTSE 100 was down -1.25% yesterday which was only a slight outperformance relative to the performance of other European bourses. The Stoxx 600 was -1.67%, DAX -1.67% and FTSE MIB -2.26%. Lloyds, Aviva and RBS were all down over 6% to lead losses while Standard Life (-3.50%), L&G (-3.86%) and Prudential (-4.32%) all stood out too. Sterling (-0.70%) took its post-Brexit losses to nearly 14% and has held below 1.30 this morning (currently hovering around 1.2945). It's worth highlighting that yesterday DB reaffirmed their longstanding $1.15 call for cable by year end (along with 0.90 versus the Euro) although they also highlight that these aggressive forecasts may even be still understating the level of weakness required in Sterling. Meanwhile the Euro Stoxx Banks index fell -2.38% and is now down over 6% alone this week and -24% versus pre-Brexit.

Yesterday also saw the release of the June FOMC minutes. With that meeting coming pre-Brexit it’s hard to take too much away from the text. Indeed the text suggested that officials were being prudent, wanting to assess the consequences of the referendum for global financial conditions and the US economic outlook. The inflation outlook amongst officials appeared to be mixed with ‘most’ expecting to see ‘continued progress’ towards the target but others being ‘less confident’ due to ‘persistent disinflationary pressures’. One line which stuck out was the passage that ‘many participants commented that the level of the federal funds rate consistent with maintaining trend economic growth – the so called neutral rate – appeared to be lower currently or was likely to be lower in the longer run than they had estimated earlier’. The passage goes on to state that ‘many judged that it would likely remain low relative to historical standards, held down by factors such as slow productivity growth and demographic trends’.

As our US economists highlighted, ‘uncertainty’ appears to be the new buzzword for the Fed having been mentioned 8x compared to 2x in the April minutes. A full rate hike is now not priced in until February 2019 but as we highlighted on Monday there is a tendency for this to get under and over priced so complacency could be a factor again even if we continue to think the Fed will struggle to hike again this cycle.

The outcome of tomorrow’s payrolls report is the next big event (notwithstanding Brexit-related headlines). Ahead of this yesterday’s ISM nonmanufacturing (+3.6pts to 56.5 vs. 53.3 expected) surprised to the upside after coming in at the highest level since November last year. In terms of the details the new orders component surged an impressive 5.7pts to 59.9 and business activity was up to 59.5 from 55.1. There was much focus on the employment component too ahead of payrolls which after tumbling to 49.7 in May recovered to 52.7 in June. DB’s Joe Lavorgna noted yesterday that this component is the most useful portion of the data given that it is related to the trend in private payrolls while the employment component of the manufacturing ISM (which rose +1.2pts to 50.4) is also a leading indicator of the trend in goods-producing hiring. He warns though that while the recent gains in both series are a modest positive, the overall trend in private payroll growth is likely to deteriorate further. Joe points out that the three-month average of the blended-ISM employment series was 51.4 (when you weight them by share of respective sectors), which points to only a modest expansion in private-sector hiring. In fact a linear regression of the three-month average gain of private payrolls on their weighted-ISM employment component points to an average gain of just 97k in the former. As of May, the three-month trailing average of private payroll gains was 107k. Therefore their weighed ISM employment model implies a slightly lower private payroll print in June than their current 150k projection.

Unlike the price action in Europe, markets in the US actually recovered from the early lows to finish up on the day. The S&P 500 closed +0.54% with healthcare names leading the charge while in credit markets CDX IG was nearly 3bps tighter. 10y Treasuries finished little changed around 1.368% although did mark a new record low of 1.318% early on during the day.

As we refresh our screens this morning it’s been a relatively mixed start in the Asian session. Bourses in Japan and China are both lower with the Nikkei and Shanghai Comp -0.23% and -0.16% respectively. A slightly firmer Yen (+0.4%) weighing on the former. Meanwhile the Hang Seng (+0.84%), Kospi (+1.08%) and ASX (+0.37%) are all in positive territory. Newsflow wise Australia’s sovereign credit rating outlook was cut to negative from stable at S&P which initially sent the Aussie Dollar down half a percent, but its since bounced back to unchanged.

Wrapping up the rest of the data in the US, the latest trade balance reading for May revealed some further widening in the deficit to $41.4bn from $37.4bn in April reflecting an increase in imports during the month. Meanwhile the services PMI was revised up slightly in the final June revision to 51.4 (from 51.3) while the composite was left as is at 51.2 which represents an increase of 0.3pts from May. The Atlanta Fed downgraded their Q2 GDP forecast to 2.4% from 2.6% yesterday following that trade report.

In Europe the only data of note came from Germany where factory orders disappointed in May (0.0% mom vs. +1.0% expected). The YoY rate is a lowly -0.2% and our colleagues noted that this latest data will likely lead to a more disappointing German IP report today than what is expected by the market (DB -1.0% mom, market +0.1%). In terms of Central Bank action the Riksbank left the repo rate unchanged as expected at -0.5% however they also suggested that there will be a longer delay until the rate begins to be raised again, suggesting that this might not begin until the second half of 2017.

Staying in Europe and just wrapping up yesterday’s newsflow, there was some interest in the latest political polls in Italy where the support for the Five Star movement appears to be rising at the expense of Renzi’s PD party. Indeed an Ipsos poll revealed that support for 5SM is 30.6% compared with 29.8% for the PD. The FT noted that similar polls run in January had the PD party leading 5SM by nearly 6%. A poll run by Demos on July 1st had 5SM at 32.3% versus 30.2% for PD.

Looking at the day ahead, this morning in Europe we’ve got May industrial production reports due out of Germany and the UK along with the latest trade data in France. The ECB minutes from the June meeting are also scheduled shortly after midday. Over in the US the ADP employment change print is the highlight ahead of tomorrow’s payrolls. Expectations for the ADP print are 160k although it’s worth highlighting that last month’s 173k reading severely overstated the May payrolls report. We’ll also get the latest initial jobless claims reading today while China is also due to release its June foreign reserves data at some stage. Away from the data we’re also due to hear comments from the ECB’s Lautenschlaeger and Constancio today.

http://www.zerohedge.com/news/2016-...orm-higher-bank-fears-subside-us-futures-flat
 

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#27

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Asian Metals Market Update: July-7-2016
By: Chintan Karnani, Insignia Consultants
At the end of 2015, most the hedge funds were giving bearish investment views on gold and silver. Some said that gold prices would fall to $800 and would never recover anytime. These very firms who said that gold prices will fall to $800 this year are now saying that gold prices are on the verge of a great bull run. Please be prudent and invest carefully. Investment trends are changing quickly.


Gold Market Morning: July-7-2016 -- Gold and silver prices pause before moving higher!
By: Julian D. W. Phillips, Gold Forecaster
While global financial markets are slightly calmer today, we see them digesting the worrisome information coming out of the impending crises areas. None of the information has changed but global financial markets need to get a sense of proportion and measure each factor within this context. For instance the Italian Banking crisis can drag out through the summer and could gain the green light for the Italian government to inject funds into them. Then it appears that in the short to medium term, the crisis would evaporate.
 

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#30
Nothing to see. Best bet (if interested) is to listen in one window, play around on GIM or surf the web in another window.

Mornings With "V" (7/07/2016)
ROGUE MONEY


Streamed live 2 hours ago
V talks markets, headlines and issues to get the day started.
 

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#33
Frontrunning: July 8


by Tyler Durden
Jul 8, 2016 7:42 AM

  • Snipers kill five Dallas police; Obama calls it 'despicable' attack (Reuters)
  • Global stocks regain ground, Treasury near record low as U.S. jobs data looms (Reuters)
  • House Republicans Push for New Hillary Clinton Investigation (WSJ)
  • Obama urges NATO to stand firm against Russia despite Brexit (Reuters)
  • Kremlin says NATO talk of Russian threat absurd, short-sighted (Reuters)
  • South Korea, U.S. to deploy THAAD missile defense, drawing China rebuke (Reuters)
  • Oil products fill storage tanks and cast doubt over crude demand (Reuters)
  • Underwater Oil-Well Bolts Are Failing, Causing Alarm (WSJ)
  • Italy State Intervention on Banks May Be Needed, Visco Says (BBG)
  • China said to consider aid package for struggling state firms (BBG)
  • Post-Brexit U.K. Spawns M&A Bargain Hunters, Pound Evacuees (BBG)
  • Why Banks Aren’t Giving You a 3%, 30-Year Mortgage…Yet (WSJ)
  • Theranos CEO Holmes Banned From Operating a Lab for 2 Years (BBG)
  • Turkey's Erdogan calls on NATO to do more on fighting militant attacks (Reuters)
  • U.K. Consumer Sentiment Dives Most Since 1994 on Brexit Effect (BBG)
  • U.S. legislators criticize China's rights lawyer crackdown (Reuters)
  • Airbus Is Running Out of Buyers for Its Enormous A380s (BBG)
  • Super typhoon Nepartak hits Taiwan, disrupts power supply, transport (Reuters)
  • North Korea Calls U.S. Sanctions on Kim a ‘Declaration of War’ (BBG)
  • Brexit Turmoil Seen Spurring Race for Office Space in Europe (BBG)

Overnight Media Digest

WSJ

- Eleven police officers were shot by two snipers in Dallas Thursday night during a protest over police brutality, leaving three officers dead and seven wounded and throwing the city into chaos. http://on.wsj.com/29rl1Q3

- Legislation to make the bankruptcy of a big bank more feasible is gaining steam, which could help large U.S. financial firms counter criticism that they remain "too big to fail." http://on.wsj.com/29mzB9E

- House Republicans said they would ask for a new FBI probe into Hillary Clinton's handling of classified information, this one focused on whether she lied to Congress about her handling of classified information, raising the likelihood the controversy over her private email system will continue through the fall elections. http://on.wsj.com/29omDaU

- Government bond yields have plummeted this week, but mortgage rates haven't fallen so fast. For now, that should bolster bank profits from making mortgages. http://on.wsj.com/29S7dwO


FT

- GfK prepared a special consumer confidence barometer which showed that for the period June 30 to July 5, the core consumer index fell 8 points to minus 9, with all key measures which were used to calculate falling.

- FBI Director James Comey defended his decision of not recommending prosecution of Hillary Clinton for mishandling secret information on her private email server.

- Biotech company Juno's shares fell by 28 percent in after-hours trading as it said three patients receiving the experimental cancer treatment had died. The U.S. FDA asked Juno to suspend the trial.

- German chancellor Angela Merkel blamed Russia for undermining European security. This comes just before the Friday NATO summit where the country leaders would meet.


Britain

The Times

Sales of clothing and homewares at Marks & Spencer have plunged in the first quarter of the year. The retailer has recorded an 8.9 percent fall in like-for-like sales during the first quarter. This is the biggest fall since the first quarter of 2005/6 when clothing and home sales fell by 11.2 per cent. (http://bit.ly/29xunt0)

Sterling plunged by more than three cents at one point to hit a low of $1.2798 as investors were rattled by the absence of political leadership in Britain, the growing expectation of a recession and the spectre of an imminent base rate cut. (http://bit.ly/29xuDYU)

The Guardian

With the pound under pressure on the foreign exchange markets, fund managers Legal & General, Foreign & Colonial and Dutch-owned Kames cut the value of their property funds on Thursday. L&G cut by 10 percent while F&C and Kanes both cut by 5 percent. (http://bit.ly/29xvN6R)

Four former Barclays bankers have been sentenced to between 33 months and six-and-a-half years in jail for conspiring to fraudulently rig global benchmark interest rates. (http://bit.ly/29xw3T7)

The Telegraph

British Business Secretary Sajid Javid begins a round-the-world tour of Britain's key trading partners today, as he flies to India with a view to forging new links across the globe after the EU referendum. (http://bit.ly/29shTVB)

UK energy prices climbed to near nine-month highs in the aftermath of the EU referendum as the market began to anticipate winter blackouts. Market experts at ICIS said the price of gas climbed 29 percent over the second quarter while wholesale electricity prices rose 25 percent. (http://bit.ly/29uoRIu)

Sky News

Amazon has announced it is creating 1,000 new jobs across the UK as the company continues to grow its ultra-fast delivery service, Prime Now. Prime now serves more than 30% of the population. (http://bit.ly/29xwVak)

Levels of consumer confidence in Britain have fallen at the fastest rate in more than two decades. The confidence barometer from research group GfK dropped from -1 points to -9 between June and the week following the poll. (http://bit.ly/29xxMb3)

The Independent

Christine Lagarde, the head of the International Monetary Fund, has urged the UK government to make a quick withdrawal from the European Union in order to reduce economic uncertainty. (http://ind.pn/29xxKjw)

Britain's GDP grew by 0.6 percent in the second quarter of 2016 in the run-up to the Brexit referendum, according to the latest regular forecast from the National Institute of Economic and Social Research (NIESR). (http://ind.pn/29xyq8r)

http://www.zerohedge.com/news/2016-07-08/frontrunning-july-8
 

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#34
US Futures Rebound After Volatile Session, All Eyes On June Payrolls


by Tyler Durden
Jul 8, 2016 6:58 AM

In a session where bleary-eyed traders followed the all-night tragic developments out of Dallas and initially sold off risk assets, it is good to see that some normalcy prevailed with the traditional post Europe-open futures ramp, which was further assisted by the successful resolution of the Dallas standoff, which has pushed futures modestly higher ahead of today's main event for markets, the June payrolls report due in under two hours.

“European markets have done well to open on the green,” said Michael Ingram, a strategist at BGC Partners in London. “Still, feeble volumes belie a real lack of conviction ahead of the U.S. non-farms. I am not sure the NFPs will help to put the market on a more stable footing, as a solid number will put a Fed hike back on the agenda. Ideally, equity markets would like to see evidence of robust growth and somnolent central banks.”

As discussed last night, the payrolls report - especially if a significant outlier to the consensus print of +180,000 - could sway expectations for the timing of the Fed’s next interest-rate hike. Officials at the central bank flagged concern over job creation at their last meeting, which followed data showing employers in May took on the fewest workers since 2010, casting doubts on prospects for a rate increase this year.

The Stoxx Europe 600 Index rose 0.2% in early trading, rebounding for the 2nd straight day, after dropping 2.9% this week. Europe saw some further relief when Italy's Banco Popolare rallied 7% after saying its own stress tests showed “resilience” to adverse shocks. Banca Popolare dell’Emilia Romagna SC climbed 5%, and Monte Paschi added 3% after reaching a record low despite a 3-month long short selling ban imposed by the Italian regulator. The lender’s chief executive officer said it’s working “intensely” with authorities to quickly resolve its bad-loan burden. European automakers climbed as China’s car sales grew faster in the first half of the year.

S&P 500 futures added 0.2% after being modestly lower overnight. In the U.S., Juno Therapeutics Inc. sank 27 percent in early New York trading after saying that three patients died during its clinical trial for a cancer therapy and that the U.S. Food and Drug Administration has placed the study on hold.

Treasuries headed for a seventh weekly gain as the U.K.’s vote to leave the EU threatens to slow economic growth and drives investors to the relative safety of bonds. Gains in U.S. jobs and wages won’t be enough to get the Fed to move anytime soon as policy makers assess what’s happening in the global economy, PIMCO's Mark Kiesel told Bloomberg. German bunds also headed for a seventh weekly gain, the longest run since January 2015. Italian bonds gained on Friday, with the yield on the securities falling two basis points to 1.22 percent.

As noted, the only notable macro event on today's calendar will be the June jobs report, where consensus expects an increase of 180,000 workers following last month's appalling 38,000 print.

Market Snapshot
  • S&P 500 futures up 0.2% to 2096
  • Stoxx 600 up 0.5% to 324
  • FTSE 100 down 0.1% to 6527
  • DAX up 0.9% to 9501
  • German 10Yr yield up less than 1bp to -0.17%
  • Italian 10Yr yield down 3bps to 1.21%
  • Spanish 10Yr yield down 2bps to 1.16%
  • S&P GSCI Index up 0.3% to 356.3
  • MSCI Asia Pacific down 0.6% to 128
  • Nikkei 225 down 1.1% to 15107
  • Hang Seng down 0.7% to 20564
  • Shanghai Composite down 1% to 2988
  • S&P/ASX 200 up less than 0.1% to 5231
  • US 10-yr yield up less than 1bp to 1.39%
  • Dollar Index down 0.14% to 96.19
  • WTI Crude futures up 0.5% to $45.36
  • Brent Futures up 0.5% to $46.64
  • Gold spot down 0.3% to $1,356
  • Silver spot up less than 0.1% to $19.70
Top Global News:
  • Theranos CEO Holmes banned from operating a lab for 2 years
  • U.K. consumer sentiment dives most since 1994 on Brexit effect
  • China said to consider aid package for struggling state firms
  • U.K. Consumer Sentiment Dives Most Since 1994 on Brexit Effect
  • North Korea Calls U.S. Sanctions on Kim a ‘Declaration of War’
  • Brazil Targets Moderate Improvement in 2017 Budget Deficit
Looking at regional markets, as customary we start in Asia where stocks traded mostly lower with caution seen following the weak lead from the US where energy losses dampened sentiment, while participants also await key NFP data. Nikkei 225 (-1.1%) was initially led higher by auto names, but then pared gains as the cautious tone weighed on risk appetite, while the ASX 200 (+0.1%) saw choppy price action. Sentiment in China was soured following a mammoth net weekly drain of CNY 645b1n by the PBoC resulting in losses in the Shanghai Comp (-1.0%) and the Hang Seng (-0.7%). 10-yr JGBs traded higher amid cautious sentiment with 2yr and 10yr bond yields continuing to print fresh record lows, while the BoJ also entered the market for JPY 1.14tIn worth of government debt. PBoC set the CNY mid-point at 6.6853 (Prey. mid-point 6.6820).PBoC injected CNY 20bIn with 7-day reverse repos for a net weekly drain of CNY 645b1n vs. last week's net injection of CNY 180bIn.

Top Asian News
  • Xi Boosts Party Say in China’s $18 Trillion State Company Sector: Party should “strengthen and improve’ control,” Chinese president says
  • China Auto Sales Growth Accelerates on Rising SUV Demand: Passenger-vehicle sales rose 19% to 1.7m units in June
  • Brexit Means Even Mickey Mouse’s Yen Bonds Have Negative Yields: Number of yen company yields below 0% up 10x after Brexit
  • McDonald’s Said to Narrow Bidders for $2 Billion China Franchise: Fast-food chain invites Cinda, Sanyuan to make binding offers
  • Top China Fund Manager Puts Half of His Cash Pile Back in Stocks: HSBC Jintrust’s Qiu buys low-valuation shares in rally bet
Since the European open, equities have been bid with the Euro Stoxx (+0.5%) modestly in the green, while newsflow has been relatively light ahead of the US NFP report. However, equities have pulled off best levels in recent trade. This morning the FTSE MIB has notably outperformed amid the move higher in Italian banks, in particular Banco Popolare (+7.8%) whose internal stress test reaffirmed resilience to adverse shocks. Elsewhere, in credit markets the upside in equities has subsequently led to some slight softness in safer assets while yields across the German curve are relatively unchanged as participants wait on the side-lines ahead of the aforementioned US jobs report.

Top European News
  • Deutsche Boerse Said to Push Frankfurt Clearing in LSE Pitch: CEO Kengeter to pitch deal as city’s shot at euro clearing. European officials want to win London business post-Brexit
  • Post-Brexit Wreckage Spawns M&A Bargain Hunters, Pound Evacuees: Clients are asking bankers to scour the FTSE for deals. ‘The money is there’ for deals like Melrose’s Nortek purchase
  • U.K. Leadership Fight Pits Seasoned May Against Untested Leadsom: Gove eliminated from shortlist in final vote among lawmakers. Cameron’s successor as premier will be announced on Sept. 9
  • Worst June in a Decade as U.K. Retailers Experience Brexit Chill: Consumer confidence falls most since 1994 after Brexit vote. Retailers could see more pain following vote to leave EU
  • Airbus Is Running Out of Buyers for Its Enormous A380s: Orders for the superjumbo are drying up as airlines shift to more efficient planes.
  • Air France-KLM CFO Plans His Departure as New CEO Arrives: Riolacci to leave as airline faces off with pilots over costs. CFO to stay until November before joining site manager ISS
  • EU Commission Seeks Sanction on Spain, Portugal on Deficits: Finance ministers to decide whether to go ahead with sanctions. Fines could be reduced, canceled on exceptional circumstances
In FX, the Bloomberg Dollar Spot Index slipped 0.1 percent, trimming this
week’s advance to 0.5 percent. The pound strengthened 0.2 percent.
The kiwi strengthened 0.3 percent versus the greenback and reached a 14-month high against Australia’s dollar. It jumped 1.4 percent in the last session after comments from New Zealand central bank Deputy Governor Grant Spencer crushed expectations that interest rates will be cut anytime soon, boosting the attraction of the highest-yielding Group of 10 currency. The odds of the nation’s borrowing costs being reduced next month dropped to 42 percent on Friday from as much as 70 percent earlier in the week, derivatives show. The MSCI Emerging Markets Currency Index was little changed on Friday leaving it down 0.8 percent in the week. China’s yuan headed for a fifth weekly decline, depreciating 0.4 percent, in the longest run of losses this year amid speculation the central bank favors further depreciation to revive the economy.

In commodities, oil trimmed its biggest weekly decline in five months as investors weighed the largest drop in U.S. output since 2013 against a smaller-than-expected crude stockpile decline. West Texas Intermediate crude rose 0.5 percent to $45.37 a barrel, paring the weekly drop to 7.4 percent. Brent rose 0.5 percent to $46.61. Gold was poised for its first back-to-back daily drop since the U.K. voted to leave the EU as investors turned their focus to the U.S. jobs report. Bullion for immediate delivery fell 0.3 percent to $1,355.95 an ounce and silver slipped 0.2 percent. Copper rose 0.4 percent to $4,706.50 a metric ton, paring its biggest weekly decline in two months amid concern about flagging demand and a a surge in inventories around the world. Aluminum gained 0.5 percent and zinc added 0.3 percent.
Corn advanced 1.8 percent to $3.48 a bushel, extending its rebound after entering a bear market on July 5. Brazil slashed its estimate for domestic output after drought and frost hurt the crop. Palm oil is poised to enter a bear market, dragged down by concerns over rising supply and lower prices of alternatives. The benchmark futures contract on Bursa Malaysia Derivatives in Kuala Lumpur has dropped 19 percent from this year’s closing high of 2,779 ringgit reached on March 29.

Bulletin Headline Summary from RanSquawk and Bloomberg
  • European equities trade higher despite the looming US NFP report with newsflow relatively muted at this stage of the session
  • FX markets have traded in a relatively tentative manner with USD/JPY inside 100.00-101.00 and EUR/USD between 1.1050-1.1100
  • Looking ahead, highlights include US NFP report, Canadian Jobs report and DBRS sovereign update on the UK
  • Treasuries slightly lower on front-end during overnight trading while oil and global equities mostly higher, gold drops; payroll report today at 8:30am ET, forecast for +180k.
  • Pacific Investment Management Co. says the Federal Reserve will keep interest rates on hold no matter what employment report shows
  • The pound headed for a third week of declines spurred by the Brexit vote, winning itself the title of 2016’s worst performer among major currencies
  • U.K. retailers had their worst June in a decade as consumers reined in spending ahead of the country’s European Union referendum, according to figures from accounting firm BDO
  • U.K. banks’ exposure to the country’s commercial real estate sector is more than 65 billion pounds ($84 billion), almost a third of the combined market value of the biggest lenders
  • State intervention to support Italian banks can’t be ruled out, given the risk that current difficulties may undermine trust in the nation’s financial industry, said Bank of Italy Governor Ignazio Visco
  • China is considering providing about 10 of its state-owned enterprises with an aid package, people familiar with the matter said. Sinosteel Corp. is among those that may receive help, one of the people said
  • Wall Street’s answer to a growing pool of negative-yielding bonds worldwide: stripping U.S. Treasuries. The outstanding amount of Treasury notes and bonds split into principal- and interest-only securities jumped to $223.1 billion in June, the highest level in more than 17 years
  • Five Dallas police officers were killed and six others were wounded by snipers on Thursday night during a demonstration protesting shootings by officers in Minnesota and Louisiana this week
US Event Calendar
  • 8:30am: Change in Non-farm Payrolls, June., est. 180k (prior 38k)
    • Change in Private Payrolls, June, est. 170k (prior 25k)
    • Change in Manufacturing Payrolls, June, est. -3k (prior -10k)
    • Unemployment Rate, June, est. 4.8% (prior 4.7%)
    • Average Hourly Earnings m/m, June, est. 0.2% (prior 0.2%)
    • Average Hourly Earnings y/y, June, est. 2.7% (prior 2.5%)
    • Average Weekly Hours All Employees, June, est. 34.4 (prior 34.4)
    • Change in Household Employment, June (prior 26)
    • Labor Force Participation Rate, June (prior 62.6%)
    • Underemployment Rate, June (prior 9.7%)
  • 3:00pm: Consumer Credit, May, est. $16b (prior $13.416b)
* * *

DB's Jim Reid concludes the overnight wrap

So here we go again. Another payroll Friday is upon us and one which would have been a long awaited event had Brexit not intervened. It's still important as it was only last month (it seems a lifetime ago) that we saw the shock 38k print relative to 160k expectations. The Verizon strike was an issue but not anywhere near large enough to explain the scale of the miss. Today DB's Joe LaVorgna expects around 35k Verizon workers to be back in the number with his forecast at 155k (consensus 180k). However Joe makes the point that a number at his forecast (with no revisions) would have the effect of reducing the three-month moving average to 105k from 116k previously. This is significantly lower than the trend over the past couple of years, as nonfarm payroll gains averaged 251k in 2014 and 229k in 2015. The big question would be whether this means full employment is approaching and higher wages are round the corner or whether it reflects companies scaling down hiring as profit margins get squeezed? We have more sympathy with the latter view given we think we're late cycle.

As a prelude to the data today, yesterday’s ADP employment change report came in a little better than expected at 172k (vs. 160k expected) which is a little bit more than the downwardly revised 168k last month (although as we know severely overstated the actual private payrolls number). Initial jobless claims (254k vs. 269k expected) continue to remain supportive too with the four-week average of 265k now the lowest since April. So all eyes on this afternoon’s print. For completeness the market is also expecting the unemployment to rise one-tenth to 4.8% (DB +4.9%) and average hourly earnings to have risen +0.2% mom (DB +0.2%) which would have the effect of raising the YoY rate to +2.7%.

Markets still appear to be fighting for any real direction in the aftermath of Brexit. Indeed after European equities initially declined in the two days post Brexit, a four-day rally was then followed with three days of heavy declines at the start of this week. Yesterday we were back to rebound mode though with the Stoxx 600 (+1.05%), DAX (+0.49%) and Euro Stoxx Banks (+0.56%) all up. The FTSE 100 and 250 finished +1.09% and +1.46% too while Sterling, which initially pushed back above 1.30 midway through the afternoon, eased off in the US session to close near unchanged and just above 1.290. UK banks and asset managers bounced back. RBS (+6.51%), Lloyds (+4.52%) and Barclays (+2.35%) all rose despite the news that S&P had revised down UK bank ratings’ outlooks. Meanwhile Schroders (+5.32%), L&G (+2.63%) and Aviva (+1.84%) all outperformed too.

It was a slightly different story in the US however. After initially starting on the front foot, the S&P 500 moved steadily lower as the session wore on before a late bounce into the close helped limit the loss to just -0.09%. Trading appeared to be largely dictated by the moves in Oil. On the back of a smaller than expected drop in the latest crude supply data out of the EIA, WTI (-4.83) fell sharply to close at $45.14/bbl and the lowest since May 10th. Base metals also retreated while 10y Treasury yields finished higher (by 2bps) for the first time since last Wednesday. It’s worth highlighting that earnings season unofficially kicks off in the US next week which is one more variable to throw into the mixer for markets.

Turning over to the latest in Asia this morning where the bulk of markets are trading cautiously into the end of the week. Indeed the Nikkei (-0.39%), Hang Seng (-0.81%), Shanghai Comp (-0.81%) and Kospi (-0.61%) are all in the red with the ASX flat as we type. Credit markets are a bit more mixed while there’s been a bit of data released overnight. In the UK the GfK consumer confidence reading, in a survey conducted post Brexit from June 30th to July 5th, tumbled by the most in 21 years to -9 (from -1). It’s the biggest decline since December 1994. The survey also revealed that confidence amongst remain voters scored -13, while confidence for leave voters was -5. Meanwhile China has reported a bounce in auto sales during June to +9.5% ytd yoy from +8.4% in May.

Moving on. In the aftermath of the Brexit shock two weeks ago one positive we could draw at the time was that it might hasten a change in global policy and that the UK could be the first to seriously attempt 'Helicopter Money' or at least make it a marked policy to loosen the purse strings and use fiscal policy. Whilst we acknowledge the risks in such a strategy, the status quo of ever looser monetary policy and negative rates/yields is arguably more damaging. There might be a once in a millennium opportunity borrowing costs wise to invest for growth. It's inevitable to us that central banks will have to ensure these costs stay at low levels by helping finance such investments but nevertheless it's perhaps worth a shot.

On this, interestingly in the last two couple of days UK business secretary Sajid Javid has suggested that the UK commit to a 'Growing Britain Fund worth up to £100 billion to fund business-friendly infrastructure programmes alongside the private sector'. While there will be lots of political posturing ahead of the leadership election it's worth highlighting that policy could go in a different direction now and maybe Brexit is a perfect excuse for a u-turn.

Speaking of politics, yesterday we saw the Conservative Party leadership race narrow down to two. Theresa May and Andrea Leadsom will now go head-to-head after Michael Gove was eliminated from the contest yesterday. In the second-round ballot yesterday May took home 199 votes compared to Leadsom with 84 votes. We’ll have to wait until September 9th until the winner gets announced with UK bookmaker Ladbrokes currently making May the odds on favourite at 1/5 versus Leadsom at 7/2.

Over in Italy the latest banking sector headlines are suggesting that Banco Monte dei Paschi is working intensely with various authorities in a bid to make progress on tackling its bad-debt pile according to the Bank’s CEO. The CEO noted that the Board has agreed to respond to the ECB’s draft proposal request that it received and according to Bloomberg will disclose details of the ECB’s request once it receives a final version.

Staying in Europe, as expected that soft German factory orders data on Wednesday resulted in a negative read through to the May industrial production data released yesterday (-1.3% mom vs. +0.1% expected). That took the YoY rate down to -0.4% from +0.8%. Our economists noted that this leaves output 1.1% below the Q1 average and that the orders and IP data taken together continue to support their expectation that industry will be a drag on Q2 GDP. Over in the UK yesterday industrial production printed a little better than expected, albeit still negative in May (-0.5% mom vs. -1.0% expected).

Wrapping up yesterdays newsflow. The European Commission announced that they are escalating the Excessive Deficit Procedure (EDP) against Spain and Portugal for not taking effective actions to bring their deficits under control in line with Commission recommendations. DB’s Mark Wall noted that the ball is now in the court of European Finance Ministers. If finance ministers endorse the escalation, the Commission will propose the sanction, including a fine (at most 0.2% of GDP). In Mark’s view the chances are that it ends with a ‘classic European muddle through’, with at worst a zero fine.

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where shortly after this is out we’ll get the latest trade numbers in Germany. France will then report their latest industrial production data before we get the May trade balance reading for the UK. This afternoon in the US it’s all about the aforementioned June employment report which is due out at 1.30pm BST. Later on this evening the May consumer credit data is released.

Before we sign off, it’s worth noting that over the weekend China will release the June inflation report. CPI is expected to fall to +1.8% yoy from +2.0% and PPI is expected to increase three-tenths to -2.5% yoy. Expect this and payrolls to set the early tone come Monday morning.

http://www.zerohedge.com/news/2016-...after-volatile-session-all-eyes-june-payrolls
 

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#35
The Number One Goal to Own Gold and Silver is NOT What You Think It Is


by smartknowledgeu
Jul 7, 2016 9:22 PM

The number one reason to buy physical gold and physical silver (not paper gold and paper silver, which is not the same thing) is very likely not what you think it is. I can deduce the number one reason why most people buy gold and silver simply from the disproprotionate amount of questions I receive about buying gold and silver whenever gold and silver prices are rising significantly versus when gold and silver prices are falling. In other words, most people believe that that top reason they should buy gold and silver is to profit from rising prices. However, this is far from the best reason to buy physical gold and physical silver. The number one reason to buy physical gold and silver, bar none, is the global currency rot that is happening today, that is relentless, and that Central Bankers are now helpless to stop (though they are responsible for creating it). Of course, some may say that benefiting from rising fiat currency prices of gold and silver is the same reason as protecting onself against currency rot, but in reality, these two reasons for buying gold and silver are as different as night and day, and here's why. Of those that want to benefit from rising fiat currency prices of gold and silver, the vast majority are looking for a quick score, and they buy gold and silver for this reason without even taking the time to truly understand the value of gold and silver. Those seeking a quick profit from ownership of gold and silver typically fail to understand that:

(1) the true value of gold and silver is immutable and defined by its weight in grams or troy ounces;

(2) that gold and silver should never even be priced in terms of illegitimate fiat currencies; and

(3) during periods of time when fiat currency prices of gold and silver drop, a dropping fiat currency price is only indicative of an incredible opportunity to buy similar values (weights) of gold and silver while spending less fiat currencies to do so.

As an example of this incorrect mindset, a the end of this past May, I informed a couple of friends that gold was making a short-term low at about $1200 and silver was doing likewise at $16. Because both PMs have risen considerably in fiat currency prices since then, one of these friends incredulously asked me at the start of this week if he should sell his gold and silver because both PMs had moved significantly higher in such a short time-span. In hearing this inquiry, I realized that he didn't understand the number one reason to buy physical gold and physical silver in the first place - the protection it affords all of us against Central Banker-induced global currency rot.

Everywhere you look, there are stories from every continent in the world regarding currency collapse and the hundreds of millions of lives ruined by Central Banker-created currency rot. Of course, you will never hear of this critical global issue promoted by the banker-bought-and-paid-for mainstream media even though these unfolding tragedies should be front and center on page 1 as these are critical stories of which everyone should be aware. And because these stories are largely ignored by the banker-bought-and-paid-for mainstream financial media, this is the number one reason most people are shockingly unaware of the global currency rot that is happening right now. Fortunately, with a tiny bit of effort and just a little bit of research online, one can easily track down and uncover these stories.

If you haven’t been asleep for the last five years, if one knows nothing else about this super important story of global currency rot, the main story of currency rot everyone knows about is the rapid collapse of the Russian ruble from about mid-2014 to the end of 2015. Since then, the ruble has recovered slightly, but not enought to save anyone that stored large amounts of their wealth in rubles during this time period. Many times, people make the mistake of thinking that because their domestic currency has only devalued slightly up until now, that there will always be time to exit the currency and move to a sound currency like physical gold and physical silver. Thus, they endlessly delay executing strategies they know they should have executed at least a year ago, due to this “slow burn” that can be quite deceptive. For example, from early 2012 to the end of 2013, over 2 years, the Russian ruble lost 3% of valuation against the US dollar, a “slow burn” that tricked many Russians into remaining complacent about their faith in an unsound fiat currency. And in the first 7 months of 2014, the ruble lost another 3%. Again, many Russians were unhappy with the devaluation of the ruble, but they felt as though they could live with such devaluation and would take action if it became necessary, thinking they could front-run the event, even though warning after warning and red flag after red flag in the form of ongoing devaluations had already occurred that should have prompted every ruble-owning Russian to convert their fiat currencies into the sound money of physical gold that was far more stable. Then, while most Russians were still ignoring all the previous warning signs from July to the end of the year in 2014, the ruble fell off a cliff and collapsed, rapidly lost a massive 50% in purchasing power, and unfortunately, for the procrastinators, rapidly destroyed their savings in the process. In other words, by the time the “event” happened for which Russians were waiting to trigger action, it was already too late to act. What about those that converted rubles to gold in mid-2013 because they had the foresight to plan for the time in which Central Bankers would ruin the ruble fiat currency? From mid-2013 to present day, their gold, priced in rubles, has risen by about 120%, more than enough to preserve their purchasing power in their home country and more than enough to help them avoid the fate of most of their fellow countrymen that lost much of their life savings in a very short period of time.

Though there are literally dozens more examples I can provide that are comparable to the story above and I will provide one more example in this article of a failing emerging market fiat currency, people that live in industrialized nations tend to believe that there domestic currencies are “safe” because they fail to understand that Central Bankers are ruining currencies in every single country in the world today. They make a huge mistake of thinking “I don’t live in an emerging market, and that problem in Russia is an emerging market and third world country problem that will never happen in my country.” They further mistakenly believe, “A 50% devaluation of my fiat currency in 6 months can never happen. That is a problem of emerging markets and not industrialized, ‘modern’ markets.” Thus, they mistakenly conclude, with great confidence, that the process of fiat currency devaluation in their country will be much less volatile, and therefore provide them with much more time to react to the problem when it develops. In other words, they believe that there is no need to plan because they can just react to warning signs in the future without realizing that multiple red flags and warning signs are already here. The free fall in purchasing power of the Ukranian hyrvnia, the Russian ruble, the Venezuelan bolivar and the very significant 20% to 30% devaluations of fiat currencies in several industrialized nations and dozens of other emerging markets ARE the red flags for which residents of industrialized countries are waiting, but have failed to identify.

Let’s use Canada as an example to make my point. No one ever thinks of Canada as anything but a modern, industrialized nation that would not suffer the same fiat currency problems as an emerging market country, and indeed, if you are not Canadian, you may be entirely unaware of the real and very significant struggles that have afflicted the Canadian dollar, or looney, in recent years. Like the Russian ruble, for the past two years, the Canadian dollar suffered some fairly significant swings in value against the US dollar but nothing that concerned most Canadians, though these swings should have been massive red flags to all Canadians of the already unstable nature of the looney. In 2011, the Canadian dollar swung 5% higher and nearly 7% lower from its starting point against the USD during the year but by year’s end was nearly unchanged, so most Canadians did not believe there was any need to diversify out of the Canadian dollar into a sound form of money like physical gold. The following year in 2012, during the course of the year, more red flags materialized as the volatility of 2011 continued, but again, the year closed with the Canadian dollar nearly unchanged against the USD, so most Canadians continued to ignore the massive red flag of currency volatility and instability, falsely believing that they still had time to respond reactively, instead of proactively, to the unstable Canadian dollar. However, as was the case with the Russian ruble, the fall came quick and hard for the Canadian dollar and in just 2-1/2 years, from mid-2013 to the end of 2015, the Canadian dollar plunged by more than 30% against the USD. Again, for those Canadians that understood that Central Bankers are destroying fiat currency valuations in ALL countries and consequently moved out of the Canadian dollar into gold before this significant currency rot happened, their gold appreciated significantly in Canadian dollars over this same time period, helping to preserve their purchasing power versus the substantial losses in purchasing power they would have suffered had they continued to hold devaluing Canadian dollars. If one needs to be reminded of how quickly a "strong" fiat currency (an oxymoron of word association) can unravel, merely recall the successful Brexit vote last month that caused the British pound fiat currency to plunge to 31-year lows in a single day.

Next, let’s look at the currency disaster that has afflicted citizens of Venezuela to provide a warning to everyone as to what they need to do to preserve their wealth during the continuing great currency rot and worldwide fiat currency collapse that is currently under way. In 2002, a USD could be exchanged for 1.6 Venezuelan bolivars. In April of 2016, many media sources reported that a dollar could be exchanged for more than 1,000 Venezuelan bolivars on the Venezuelan black market. Here’s how such a steep and rapid devaluation translates into real world problems. As of April 2016, Venezuelan media reported that a one kg bag of rice cost two days of wages for the average wage earner. And as of last month, the dailycoin.org reported that the average Venezuelan worker, if they wished to buy a plane ticket to leave the country to escape this massive currency rot, would need to save two years of wages to purchase such a ticket! In other words, fiat currency collapse has ruined the life of the average Venezuelan. But what about those Venezuelans that took their cues from the currency rot events that had already been unfolding all around them and exchanged their bolivars into gold? Within the past 5-1/2 years, gold priced in Venezuelan bolivars has soared by more than 444%, and this is just in terms of “official” government-set forex rates, which due to multiple “official” exchange rates, bizarrely range from 9 or 10 bolivars to several hundred bolivars per dollar. However, because the black market rate, as of Q1 2016, frequently reached in excess of 1000 bolivars per dollar, in essence, if one had changed bolivars into physical gold in Venezuela, and then sold some of this gold for US dollars to later be exchanged back into Venezuelan bolivars, not only would one be totally unaffected by the collapse of the Venezuelan bolivar, one would be prospering in such an environment of fiat currency collapse simply by having had the foresight to exchange intrinsically near-worthless bolivars into gold before the bolivar collapsed. And if no one wants Venezuelan bolivars, which is quite common, then one still owns gold, accepted as a universal money everywhere, or one can exchange gold into another fiat currency that is accepted. With the Venezuelan bolivar, this fiat currency is merely in the process of returning to its intrinsic value of zero, as is the destiny of all fiat currencies. In case one believes one is safe from our current orgy of Central Banker-induced fiat currency implosion by holding US dollars, remember two points.

One, the strongest option among a bunch of bad options is not a good option, and two, the destiny of all fiat currencies is to return to their intrinsic value of nothing, including the US dollar.

As I’ve stated above, procrastination is the enemy of wisdom, as procrastination in exchanging fiat currencies into sound money literally translated into an extreme difference between financial suffering and misery and financial prosperity in Venezuela today in less than a 6-year time span. Who will be the next country to become the next Venezuela? Most likely it will be another emerging market, but this probability does not negate the likely probability that these same problems will find their way back home to the industrialized nations that started these very problems as well (well, at least to the nations of the Central Bankers that rule these industrialized nations). And when it does, as we have all learned from the example of Venezuela above, you will either be prepared for it before it happens or try to react as it happens, but react too late, and be wiped out financially.

The Central Banker destruction of all fiat currencies in every country of the world today demands a proactive approach and a reactive approach will fail.

The example of Venezuela has taught us that we all have been provided ample and adequate warning to prepare for currency rot before it truly escalates in our own nation, but that shockingly, only a few among us will take the necessary actions to survive it when currency rot rapidly escalates in our own country. Unfortunately, even those that see the beginning and intermediate stages of what has happened in Venezuela happening in their own countries, as is the currently the case in Canada, Australia, the UK, Portugal, Greece, Italy, Spain, Ireland, Kenya, Brazil, and on and on, likely will still ignore these red flags, simply because banker propaganda has prevented most of us from realizing the simplest of solutions – converting fiat currencies into the sound money of physical gold and physical silver.

In other words, not only is it human nature to not believe something can happen until it actually does happen,but it is also human nature to incredibly discredit an event as it unfolds before us, as long as it does not directly impact us significantly, until it invades our own personal space, directly affects us and denial of the truth is no longer plausible.

If you have read this article and are still skeptical, I urge you to study the current cases of fiat currency collapse that have happened/ and are happening right now in Venezuela, Russia, Mexico, Colombia, Argentina and Brazil. Studying and understanding the timeline of these currency collapses should truly awaken you to the very sobering probability of severe fiat currency devaluation and/or collapse in your country, no matter where you live. Please refer to our prior two articles, “Three Charts that Show We’re Just Getting Started in the Second Leg Higher For All Gold and Silver Assets”, and “Why Intelligent Gold and Silver Mining Company CEOs are Deferring Sales of Current Production” to gain a fuller understanding of the global currency crisis.

To listen to a recent interview about where silver is heading, given by our Managing Director, JS Kim, to the SGT Report, click here. Click here to learn more about the best junior gold and silver mining stocks in our Platinum Membership (mainly for accredited investors) and click here to learn about our flagship Crisis Investment Opportunities portfolio, up more than 16% in just the past month (3 June to 6 July). To be informed of our articles when we first release them (we originally released the above article on our website on 2 July 2016), please subscribe to our SmartKnowledgeU RSS feed. For occasional unpublished content, similar to this article, and unavailable anywhere else, sign up for our free newsletter.

http://www.zerohedge.com/news/2016-07-07/number-one-goal-own-gold-and-silver-not-what-you-think-it
 

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Gold and Silver Market Morning: July-08-2016 -- Gold and silver prices consolidating before moving higher!
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch
Whenever you get that feeling that the way higher is free of obstacles, profit taking usually kicks in or a simple pause or consolidation comes in. That’s what’s happening now. While we have not seen any physical gold sales out of the gold ETFs we follow until now, the appearance of one dampens euphoria. Today, is an expression of that.
 

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#38

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Nothing to see. Best bet (if interested) is to listen in one window, play around on GIM or surf the web in another window.

Mornings With "V" 07.08.16
ROGUE MONEY


Streamed live 53 minutes ago
The Guerrilla runs down the latest news and info for the day. He focuses on the Dallas Shootings.
 

REO 54

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Meanwhile back at the ranch....

Portugal, Spain Risk EU Fines for Missing Deficit Targets:


Spain and Portugal face the risk of getting fined by the European Union for missing targets to get their finances in order. Portugal lashed back over the threat, saying it would worsen popular views of the EU only days after Britain voted to leave.

The EU's executive Commission said Thursday that Spain and Portugal had failed to take "effective action" to rein in their excessive deficits over the last two years. Madrid is likely to miss its goals in 2016 as well.

Spain's deficit stood at 5.1 percent of gross domestic product last year instead of the targeted 4.2 percent. Portugal's was 4.4 percent rather than 2.5 percent.

Commission Vice-President Valdis Dombrovskis said that "lately the two countries have veered off track in the correction of their excessive deficits and have not met their budgetary targets."

The Commission will present its assessment to EU finance ministers next Tuesday and await their recommendations.

Dombrovskis said the Commission could decide after that meeting whether to impose any sanctions and what action it thinks Portugal and Spain must take to correct the problem.

He also sought to calm fears of heavy fines against the two countries. Brussels has recently been lenient with France despite its budget woes.

"We certainly need to take into account that we are dealing with the aftermath of a financial and economic crisis. We need to take into account the effort done by both of the countries already," Dombrovskis said.

Portugal's government is furious that it might be fined and has warned that such a move could turn the Portuguese against the EU just days after British voters chose to leave the bloc.

Portuguese Prime Minister Antonio Costa said in a letter to the Commission, published Thursday, that sanctioning Portugal would be unfair because its budget deficit is on a downward trend. He also said it would be counterproductive because it would hurt efforts to get the economy back on its feet.

A fine, Costa added, would "risk fostering an anti-European mood" because years of austerity have already brought hardship for the Portuguese.

The Commission is tasked with supervising national budget plans.

Hinting at possible leniency, the EU's top economy official, Pierre Moscovici, said Europe's fiscal rule book — known as the Stability and Growth Pact — "must be applied in an intelligent way."

———

Barry Hatton in Lisbon contributed.

http://abcnews.go.com/International...rtugal-spain-missing-deficit-targets-40402998