Key Events In The Last Week Before Christmas

It might be the last full week before Christmas – with both newsflow and trading volumes set to slide substantially – but there’s still a few interesting events and data releases to look forward to next week. Among the relatively sparse data releases schedule, we get US GDP, core PCE, housing and durable goods orders in the US, as well as CPI and GDP across Euro area and UK PMI. After last week’s central bank deluge, there are a handful of leftover DM central bank meetings include the BOJ and Riksbank, with rates expected to remain on hold for both. In Emerging markets, there will be monetary policy meetings in Czech Republic, Hungary, Thailand, Taiwan and Hong Kong.
Perhaps the most significant will be in China when on Monday the three-day Central Economic Work Conference kicks off. This event will see Party leaders discuss economic policies for the next year and the market will probably be most interested in the GDP growth target. Deutsche Bank economists have noted that it will be interesting to see if the government will change the tone on its growth target by lowering it explicitly from 6.5% to 6% or fine-tuning the wording to reflect more tolerance for slower growth.
Away from this, tax reform in the US will once again be a topic for markets to keep an eye on with final votes on the Republican legislation in the Senate (possibly Monday or Tuesday) and House (possibly Tuesday or Wednesday) tentatively scheduled. Also worth flagging in the US is Friday’s release of the November personal income and spending reports and the Fed’s preferred inflation measure – the core PCE print. Current market expectations are for a modest +0.1% mom rise in the core PCE which translates into a one-tenth uptick in the YoY rate to +1.5%.

This post was published at Zero Hedge on Dec 18, 2017.

Smuggled Gold Pouring into India as Consumers Dodge Taxes

An increase in the import duty hasn’t dampened Indians’ appetite for gold. It’s just pushed the market underground.
Gold is such an important part of the Indian economy, people will do whatever they have to in order to get their hands on the yellow metal – including skirt the law. According to a recent report by the Hindu, occurrences of gold smuggling have risen rapidly in the wake of higher import taxes.
Ever since the import duty on gold was raised to 10%, the country has reportedly witnessed a rapid rise in the quantum of gold brought into the country illegally. Currently, government levies total 13%, including IGST of 3%.’
Government efforts to crack down on smuggling have proven largely ineffective. Officials estimate customs agents and police have intercepted less than 10% of the gold entering the country illegally. Police do a better job of catching smugglers traveling by air from West Asia and south-east Asia, but officials say gold brought in through the international waters of Sri Lanka and the porous borders of Myanmar, Thailand, Nepal, Bangladesh, and Pakistan is seldom tracked.

This post was published at Schiffgold on OCTOBER 23, 2017.

Frontrunning: August 25

Trump to push for tax reform passage by year’s end, says Cohn (FT) Bond Routs, Stock Surges: Jackson Hole Can Be Messy for Markets (BBG) Hurricane Harvey intensifies (Reuters) GOP Plan to Kill Estate Tax Sets Up Conflict Over Charitable Giving (BBG) ECB Is Set to Buy More Bonds (WSJ) U. S. Plans to Unveil New Round of Sanctions on Venezuela, Sources Say (BBG) U. S. Navy recovers second body in search for sailors missing after collision (Reuters) Britain will not pay ‘a penny more’ than it thinks right to leave EU: Boris Johnson (Reuters) Amazon Clobbers Grocers With Price Cuts at Whole Foods (WSJ) Samsung Heir Gets 5 Years for Scandal That Toppled a President (BBG) Auto Dealers Dogged by ‘Boys Club’ Showrooms Costing Them Sales (BBG) U. S. state election officials still in the dark on Russian hacking (Reuters) Band of Brothers Plotted Barcelona Terror (WSJ) U. S. fighter pilots in Afghanistan prepare for more air strikes (Reuters) China’s Aviation Push Lifts Aircraft Manufacturers (WSJ) Thailand’s ousted PM Yingluck has fled abroad: sources (Reuters) Centuries-Old Stolen Copy of Christopher Columbus Letter Recovered in U. S. (WSJ) San Francisco latest city to brace for protests (Reuters) Why Florida Farmers Want to Kill Nafta (BBG)

This post was published at Zero Hedge on Aug 25, 2017.

June Swiss gold exports: 90% moving east — Lawrie Williams

The latest figures for gold exports from Switzerland just further emphasise that physical gold is continuing to move eastwards in a big way. The country’s gold refineries sent 74% of their gold exports to Greater China (the Chinese mainland and Hong Kong) and India alone, while if we add in other south and east Asian nations – Malaysia, Singapore, Taiwan, Thailand and South Korea – and the Middle East – Turkey, the UAE, Lebanon and Jordan – fully 90% of Swiss gold exports that month moved to this region.
Why is this so significant? Switzerland produces no gold of its own, but its gold refineries between them are the world’s largest gold exporters taking gold bullion and scrap from mines and other sources, including good delivery 400 ounce bars, and re-refining these into the smaller sizes in demand in Asia and the Middle East and re-exporting the bullion mostly to these eastern nations.
The latest Swiss figures also support the anecdotal evidence of extremely tight supply, with the Swiss refineries struggling to source enough gold to meet the eastern demand. In June, Switzerland exported in total 162.1 tonnes of gold while only importing 124.9 tonnes – a shortfall of 37.2 tonnes. This is the second month in a row where Swiss gold exports were substantially larger than imports – the figure for May was around 39 tonnes.

This post was published at Sharps Pixley

Oslo Housing & Trade Balance Say: Tipping Point in Norway

Traditionally, July is a slow month in Norway. Receiving sizable vacation pay in June, most Norwegian take three to four weeks off in July, enjoying most of their five-week annual vacation. If you worked overtime, you could add a few extra weeks, taking back those extra hours worked, turning that holiday into a sabbatical. However, while Norwegians live it up in Spain, Thailand, Croatia, and even America, trouble awaits them when they return home this fall.
While housing prices may have finally reached the long-anticipated tipping point and the monthly trade balance posted a deficit for the first time since December 1998, the Norwegian Krone gained substantial strength, closing at 8.07 against the US Dollar. Going against the wishes and needs of exporters, that is well below the USDNOK=8.45 YTD average (July 23, 2017).
However, Norges Bank indicated that rate cuts are over, following the ECB’s and US Federal Reserve Bank’s lead. Considering the importance of housing in the Norwegian economy and the need to boost exports, compensating for a fading oil sector, we can expect new and more exotic policies to push the NOK back down are already on the way.

This post was published at Wolf Street on Jul 24, 2017.

Harley-Davidson Spirals Down, Announces US Layoffs, Builds Factory in Thailand

Trying to manage a structural decline in a terrible industry.
Shares of Harley-Davidson (HOG) dropped 10% in the morning after the company reported second-quarter earnings and were down nearly 6% at the end of the day. Almost everything was bad.
Retail sales by its dealers in the US fell 9.3% in Q2, compared to a year ago, to 49,668 motorcycles. They were ‘down more than we anticipated,’ the company said. And with ‘soft sales across most markets,’ sales by its dealers globally fell 6.7%.
‘Industry new motorcycle sales deterioration continued,’ the company said in its presentation, lamenting ‘weak industry sales on soft used bike prices.’
In addition to the industry woes, its market share in Q2 in the US dropped 1 percentage point to 48.5%. Shipments in the quarter fell 7.2% to 81,807 and are down 10.8% year to date.

This post was published at Wolf Street by Wolf Richter ‘ Jul 18, 2017.

Key Events In The Coming Week: FOMC Minutes, GDP, BOC, OPEC And More

The key highlights in the coming week are the Fed minutes, the Eurogroup meeting on Greece, the OPEC meeting and Bank of Canada rate decision. We also get GDP releases in the US, Eurozone, and UK, while a murder (or gaggle) of Fed speaker will highlight virtually every single day, starting with 4 today. Also there will be monetary policy meetings in Colombia, South Africa, Korea, Hungary, Thailand and Ukraine. Ratings in Kuwait&Qatar
In the US, key economic releases this week are the durable goods report and Q1 GDP revision on Friday. The minutes of the May FOMC statement will be released on Wednesday at 2PM. In addition, there are several scheduled speaking engagements by Fed officials this week
Detailed event breakdown:
Looking for dovish signs in the Fed minutes? The minutes on the May statement will be closely watched as the market tries to assess the potential of a communication tweak. The last statement dismissed the impact of weak 1Q GDP and March consumer inflation. With recent data being on the weak side, a dovish sign in the minutes may put emphasis on downside risks. Also watch for Eurogroup meeting on Greece and OPEC: A Eurogroup meeting is scheduled for 22 May. All eyes will be on the outcome because of Greece. Markets are optimistic that a compromise can be reached on Greece – we remain sceptical. Red lines around debt relief and IMF participation are the same and there is potential for complications in the run-up to the summer redemptions. Our commodity strategists cover the likely outcome at next week’s OPEC meeting. We think that Saudi, Russia, and most OPEC members will try sending the oil price forward curve in backwardation/ensuring no further drops in spot oil prices. Staying the course with ongoing cuts remains the most likely course of action as OPEC meets.

This post was published at Zero Hedge on May 22, 2017.

Swiss gold imports: anomalous suppliers — Lawrie Williams

We commented yesterday on the March Swiss gold export figures which confirmed India as the largest recipient of the gold from the Swiss refineries, which dominate global independent gold refining. Hong Kong and China were the two other major recipients, while overall the Middle East and South and East Asia accounted for almost 88% of total Swiss gold exports, emphasising the continuing flow of gold from West to East. (See: March Swiss gold exports show India no.1 again).
As Switzerland produces no gold of its own, but specialises in re-refining LBMA good delivery gold bars and scrap gold into the metric and small sizes in demand in the East, it has to be a major gold importer to keep the refineries’ production going, as well as to supply its own investment demand and it is particularly interesting to review the sources of this gold for re-refining and exporting.
The biggest source of Swiss gold imports is usually the U.K., which is not surprising as London has traditionally been at the centre of the global gold trade, but some of the other sources of gold for the Swiss refineries are a little more unexpected. After London the three biggest sources of imported gold are Hong Kong, the UAE (primarily Dubai), and the USA. The latter is not surprising at all as it is the world’s fourth largest producer of new mined gold, but the UAE and Hong Kong have to be considered as highly anomalous sources as they both produce little or no gold of their own, but are traditionally gold traders. Next in line comes Thailand – again usually a gold importer rather than exporter. Most of the remainder of the source nations for the Swiss gold imports are indeed gold producers as would be expected.

This post was published at Sharps Pixley

Korean Sovereign Risk Spikes After Syrian Airstrike

Despite being rated five levels higher than Thailand by Moody’s Investors Service, the cost of insuring South Korea’s bonds against default is now more expensive for the first time in 7 years.

As Bloomberg reports, five-year credit-default swaps on Korean notes have surged in the past couple of days on concern a more aggressive U. S. foreign policy is increasing the risk of conflict with nuclear-armed North Korea.
Meanwhile, the cost of such contracts on Thai debt have more than halved over the past year as the nation’s current-account surplus swelled.

This post was published at Zero Hedge on Apr 13, 2017.

Global Stocks, US Futures Rise On First Day Of Q2 As Trump-Xi Meeting Looms

After the best quarter for US stocks since 2015, global equities have started off Q2 on the right foot, despite caution about the upcoming meeting between President Trump and China’s Xi Jinping later this week, and Fed Minutes which are expected to be more hawkish than the FOMC statement.
European shares opened broadly higher, with Europe’s Stoxx 600 rising 0.3% – its 5th day of gains – following a rally in Asian markets on upbeat final PMI data and after a report that Chinese President Xi Jinping will create a new economic zone. S&P futures were modestly in the green, pointing to a higher open for the S&P on the first day of the new quarter.
Mostly positive mfg PMIs out of Asia:
Vietnam 54.6
Philippines 53.8
Japan 52.6
Korea 52.4
Indonesia 50.5
Thailand 50.2
Malaysia 49.5
— David Ingles (@DavidInglesTV) April 3, 2017

This post was published at Zero Hedge on Apr 3, 2017.

Global Stocks, US Futures Slide Spooked By G20 Protectionist Shift; Dollar Drops For 4th Day

Global markets start the week mixed with Asian stocks rising (Japan was closed for holiday), European stocks sliding, weighed down by declines in oil-and-gas shares and banks, and S&P500 futures also down. The dollar fell to a six-week low, falling four days in a row for the first time since early November as G20 leaders scrap a long-standing commitment to reject all forms of trade protectionism, suggesting the “weak Dollar” camp in Trump’s inner circle is winning.
Equities retreated in Europe, Australia and New Zealand, as did S&P 500 Index futures. Japan’s stock market was closed Monday for a holiday. Indexes rose in Hong Kong, Malaysia and Thailand. The Australian 10-year yield resumed a retreat after rising at the end of last week. The yen touched its strongest in three weeks, while the Korean won was the highest in five months. Oil fell for the ninth day in 11.
“European equity markets have started the week with a heavy risk-off sentiment after the G20 communiqu explicitly reflected U. S. intentions to establish trade protectionist measures,” Ipek Ozkardeskaya, senior market analyst at London Capital Group, told Reuters. “As the world’s number one economy is preparing to set significant barriers against the world, investors are increasingly worried,” she said.

This post was published at Zero Hedge on Mar 20, 2017.

The Chinese Chart That Keeps The IMF Up At Night

As the IIF reported yesterday, in the first 9 months of 2016 global debt rose by $11 trillion, hitting an all time high of $217 trillion, ro 325% of world GDP. Of this increase, the IIF said that China accounted for the “lion’s share” and while China’s relentless debt-funded stimulus continues to be ignored by markets, one other organization that begins with I and ends with F has also noticed that China has a big problem.
As the IMF recently wrote in its IMFDirect blog, China urgently needs to tackle its corporate-debt problem before it
becomes a major drag on growth in the world’s No. 2 economy. Corporate
debt has reached very high levels and continues to grow.
The International Monetary Fund then lays out at the dimensions of the problem:
From 2009 to 2015, credit grew very rapidly by 20 percent on average per year, much more than growth in nominal gross domestic product. What’s more, the ratio of non-financial private credit to GDP rose from around 150 percent to more than 200 percent, or about 20-25 percentage points higher than the historical trend. Such a ‘credit gap’ is comparable to those in countries that experienced painful deleveraging, such as Spain, Thailand, and Japan.

This post was published at Zero Hedge on Jan 5, 2017.

World’s Biggest Real Estate Frenzy Is Coming to a City Near You?

If they were anywhere else in Beijing, the five young women in cowboy hats and matching red, white, and blue costumes would look wildly out of place.
But here at the city’s biggest international property fair — a frenetic gathering of brokers, developers and other real estate professionals all jockeying for the attention of Chinese buyers — the quintet of wannabe Texans fits right in. As they promote Houston townhouses (‘Yours for as little as $350,000!’), a Portugal contingent touts its Golden Visa program and the Australian delegation lures passersby with stuffed kangaroos.
Welcome to ground zero for the world’s largest cross-border residential property boom. Motivated by a weakening yuan, surging domestic housing costs and the desire to secure offshore footholds, Chinese citizens are snapping up overseas homes at an accelerating pace. They’re also venturing further afield than ever before, spreading beyond the likes of Sydney and Vancouver to lower-priced markets including Houston, Thailand’s Pattaya Beach and Malaysia’s Johor Bahru.
The buying spree has defied Chinese government efforts to restrict capital outflows and shows little sign of slowing after an estimated $15 billion of overseas real estate purchases in the first half. For cities in the cross-hairs, the challenge is to balance the economic benefits of Chinese demand against the risk that rising home prices spur a public backlash.

This post was published at bloomberg

Doug Casey — A Civil War Could Be in the Cards After the Election

Nick Giambruno: The U.S. presidential election is only days away. What are the country’s greatest problems right now?
Doug Casey: Domestically, I’d say the continual and accelerating loss of freedom, compounded by the prospect of what I suspect will be the biggest financial/economic crisis of modern times. What might that crisis be like? That’s unpredictable, although the odds are it will be unlike any others that are still fresh in people’s memories, simply because people tend to be most prepared for the things that have most recently scared them. The big problems usually come from an unexpected quarter, and/or at an unexpected time. Like the monetary crisis of 1998 that materialized in Thailand.
That said, the question remains of where to look. It could come from outside American borders, in the form of war. War is perhaps the worst thing that can happen, not only for the destruction it will cause in itself, but because it will immensely exacerbate America’s domestic problems. As Bourne famously said, “War is the health of the State.” Certainly, the U.S. government is actively provoking other governments in a score of places around the world. The next war could be serious, not just a sport war, like those in Iraq and Afghanistan.

This post was published at International Man

Thai Stocks, Currency Rally As ‘Investors’ Buy The Dead King Dip

The last few days have seen carnage in Thailand’s currency and stock markets following reports that the King’s condition was unstable on Sunday. But the news that the world’s longest reigning monarch has died this morninghas prompted a buying panic in stocks and the Baht.
Thai King Bhumibol Adulyadej, the world’s longest reigning monarch, has died, according to an announcement from the palace. He was 88.
Bhumibol has been a symbol of unity in Thailand, which had 10 coups during his seven-decade reign. He had been ill for years, making limited public appearances and spending most of his time in the hospital.
Thailand’s stock market and the baht have fallen this week after the royal palace said Sunday the king’s condition was unstable. Prime Minister Prayuth Chan-Ocha’s government had earlier urged citizens not to panic over rumors circulating on social media.

This post was published at Zero Hedge on Oct 13, 2016.

Thai Stocks, Currency Plunge On Concerns Over King’s Health, Fed Hike

Ever since the 1997 Asian Financial Crisis, investors have kept a close eye on financial developments in Thailand as canary in the Asian financial conditions coalmine, and overnight there was little to look forward to after Thai stocks crashed the most in over a year, plunging as much as 6.9% before settling 4.1%, lower while the baht currency tumbled 1.1%, its steepest plunge in three years. The Thai stock market was the worst performing in Asia, with the sharp selloff attributed to concerns about the health of the king and “sudden” fears about the prospect of a December rate hike.
Thai stocks approached a correction, after sliding 8.8% in the week, the most among about 100 benchmark share indexes tracked by Bloomberg. Default risk also spiked with Thai CDS rising 8%, and more than 12 per cent since the start of the week. The Thai currency traded at 35.768 per dollar, headed for an eighth day of losses in the longest stretch since July 2015. It sank as much as 1.5 percent to 35.902, the lowest since Jan. 26, and is headed for its steepest weekly drop since 2013. The 10-year sovereign bond yield rose five basis points to 2.35 percent, the highest since January.

This post was published at Zero Hedge on Oct 12, 2016.

Gold and Silver Market Morning: Oct-10-2016 — Gold and silver starting to bounce?

Gold Today -New York closed at $1,254.30 Friday after the previous close of$1,268.60. London opened at $1,263.00.
– The $: was stronger at $1.1174: 1 from $1.1199: 1 Friday.
– The Dollar index was stronger at 96.71 from 96.23 Friday.
– The Yen was stronger at 103.16: $1 from 103.62: $1 Friday against the dollar.
– The Yuan was weaker at 6.7010: $1 from 6.6895: $1 Friday.
– The Pound Sterling was heavily weaker at $1.2380: 1 from Friday’s $1.2728:1.
Yuan Gold Fix
Shanghai is back from holiday. And they were not prepared to accept New York’s physical free price of $1,254 trading $11 – $13 higher. We remind ourselves that Shanghai is the biggest physical market in the world. It is also the first time Chinese investors and the PB o C has had the opportunity to react to the Yuan being one of the world’s leading currencies as one of those making up the SDR. In addition let’s also remind ourselves that there is no love lost between the U. S. and China as China is a separately developing ‘empire’ to that of the developed world.
We note how Thailand acceded to pressure from China on one of the Chinese dissidents and is sending him back to China. We have long made the point that pressure from Chinese reaches throughout Asia, including Singapore, where some believe their gold is free from potential interference from all other nations. Not so!

This post was published at GoldSeek on 10 October 2016.

How Gold Came to South Korea’s Rescue

Nineteen years ago, South Korea came precipitously close to bankruptcy.
The Asian financial crisis had spread like a virus. Thailand, Malaysia, Singapore and other Southeast Asian countries were all affected, inciting fears of a global economic meltdown if the crisis couldn’t be contained.
Before 1997, South Korea had been held up as a textbook example of economic reversal and resilience.
Once a poor colony, the country underwent an unbelievably rapid transformation in the second half of the 20th century, propelled by smart policy reforms and heavy investment in education. Many called it the ‘Miracle on the Han River.’ By the end of the century, Korea had grown to become the world’s 11th largest economy. Residents had the incomes to enjoy comfortable, ‘Western’ lifestyles.
But in the summer of ’97, the bug arrived in Seoul. Businesses began to fail. Left with nonperforming loans, banks collapsed, while others discontinued fresh lending. The won was in freefall. Liquidity dried up. Foreign investors yanked nearly $18 billion out of the country. Hundreds of thousands lost their jobs.
Korea’s only recourse was to seek help from the International Monetary Fund (IMF), and in December, the lender approved a gargantuan $58 billion bailout package, the largest in history. The deal required Korea to liberalize trade and its capital accounts, reform its labor market, restructure corporate governance and more.
A new crisis emerged, then, which native Koreans still refer to as the ‘IMF Crisis.’
The government wasted no time in raising the funds to pay back the loan, and on January 5, 1998, a national campaign was launched that today stands as one of the most moving shows of patriotism and self-sacrifice the world has ever known.

This post was published at GoldSeek on 28 September 2016.

Emerging Markets Are Headed for Trouble

In this debate series, GRI asked: With increasing political risks and instability occurring in spots such as Turkey and Brazil, is there still an appetite for investors to invest heavily in these emerging markets? Analyst Eric Simmons says to hold off for now. Read the opposing case here.
The past few years have shown an influx of investors into the emerging markets asset class, but this appetite will soon taper off and heavy investment in this area will not be sustained. As political risks continue to increase in emerging markets countries, we will see a decrease in both the number of supportive monetary policies undertaken by the G20 economies as well as the overall level of geopolitical uncertainty that currently exists in the developed world. The resulting impact of these forces will be the elimination of the financial environment that has been extremely conducive to emerging market investing.
Although emerging market countries such as Turkey, Brazil, and Thailand are dealing with their own increases in political risk, Wall Street has tended toward investment in their emerging market economies as it waits for the developed world to settle down, at which point it will rebalance its portfolios back in the developed direction. As we move into the end of 2016, emerging markets will continue to have to navigate through increasing geopolitical headwinds while the developed world’s risks moderate, effectively tipping the risk/reward balance for investors back toward the developed markets.
The Current Positive Trend for EMs
In recent years, dovish monetary policies (e.g., keeping interest rates at all-time lows, engaging in quantitative easing) have taken root in a number of developed economies, supporting an increased level of risk tolerance by investors and effectively overcoming what has been a historical barrier to entry for the emerging markets.

This post was published at FinancialSense on 09/08/2016.

Developing Countries Emulate The US, Turn Citizens Into Debt Slaves

One of the big advantages of being a Latin American or Asian country used to be – somewhat counter-intuitively – the lack of credit available to most citizens. The banking system in, say, Brazil or Thailand simply wasn’t ‘advanced’ enough to offer credit card, auto, or mortgage loans on a scale sufficient to turn the locals into US-style debt slaves.
But that, alas, is changing as those countries adopt their rich cousins’ worst habits.
Brazil, for instance, was once seen as a Latin American success story and future world power. But then it ramped up government spending and started encouraging its people to become ‘consumers.’ And the rest is familiar, if depressing, history.
The following article is from 2015, about the Brazilian government’s response to its suddenly-overleveraged middle class:

This post was published at DollarCollapse on SEPTEMBER 7, 2016.