China As A Leading Economic Indicator

Submitted by Erico Matias Tavares via Sinclair & Co.,
Each month the OECD produces an interesting set of composite leading indicators (‘CLI’) showing cyclical fluctuations around a long term average over time for the major global economies. The set is quite smooth with distinct turning points, which is somewhat unusual given all the noise associated with economic data. However, this comes at the expense of timeliness, with the most recent data going back to last August.
But there is another way of looking at the data that can provide early confirmation (if not indication) of cyclical changes in the global economy. And that’s when China is used as a leading indicator.

This post was published at Zero Hedge on Oct 14, 2016.

Weekend Reading: Market Breaks Support, Time To Worry?

Submitted by Lance Roberts via RealInvestmentAdvice.com,
This past Tuesday my blog was titled: ‘A Decision Point Is Coming… Soon.’ I just didn’t realize when I wrote it, that ‘soon’ would mean ‘immediately.’
‘The chart below is the last 3-months of daily price movement. As you will see, while prices have been quite volatile, there has been virtually no progress in the market during the period.’

This post was published at Zero Hedge on Oct 14, 2016.

Just Charts At 3 PM – Knocking Off Early On a Friday Afternoon

I waited until Yellen had said her piece this afternoon to see if the markets reacted to it, and they really did not do much.
So, since it is a nice, sunny day out and I have things to do, I am going to get an early start on them, and present you with the charts and data for the precious metals and major equities as of now.
I will update any major change *if* any should occur between now and 4:15 PM when the futures close.

This post was published at Jesses Crossroads Cafe on 14 OCTOBER 2016.

US Budget Deficit Spikes 34%, Grows For The First Time Since 2009

One week after the US Treasury revealed that total US debt in fiscal 2016 rose by $1.422 trillion, the third highest annual increase in history, and hitting an all time high of $19.6 trillion…

.. moments ago it also revealed that in the fiscal year ended September 30, the US budget deficit grew by $587 billion, a 34% spike comapred to the post-crisis low of $439 billion in fiscal 2015, despite the Treasury enjoying a healthy surplus of $33 billion in the month of September.

This post was published at Zero Hedge on Oct 14, 2016.

Eric Peters On The Age Of Believing “They Can Do Anything” Economically

Authored by Mark Melin via ValueWalk.com,
A dad doing car pool duty listening to children age seven to thirteen can be instructive, hedge fund literary paragon Eric Peters notes in his Sunday, October 9 e-mail missive. ‘They can turn a boy into a girl,’ one of the children casually observes, pointing to two transgender classmates. There is a higher meaning. ‘They can do anything these days,’ the father explains, avoiding road hazards as he points to a generational belief that a new age is upon us. This is the era where yesterday’s societal norms might not matter, but does this concept of breaking commonly held economic beliefs translate the same?

This post was published at Zero Hedge on Oct 14, 2016.

Oct 14/Our usual and customary gold whack on a Friday/Huge spread between Shanghai gold fix and NY time zone as well as the London second fix/We have a huge 26 tonnes of gold standing for October…

Gold $1253.10 up $1.90
Silver 17.39 DOWN 2 cents
In the access market 5:15 pm
Gold: 1251.80
Silver: 17.40
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON .
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix OCT 14 (10:15 pm est last night): $ 1263.11
NY ACCESS PRICE: $1258.90 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1262.18
NY ACCESS PRICE: 1255.25 (AT THE EXACT SAME TIME)
HUGE SPREAD TODAY!! 7 dollars
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: OCT 14: 5:30 am est: $1256.15 (NY: same time: $1256.20: 5:30AM)
London Second fix OCT 14: 10 am est: $1251.75 (NY same time: $1258.10 , 10 AM)**STRANGE!! SECOND FIX!!
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.
end
For comex gold:
0 NOTICES FILED FOR NIL OZ
For silver:
for the Oct contract month: 2 notices for 10,000 oz.

This post was published at Harvey Organ Blog on October 14, 2016.

Standard Chartered Becomes First Commercial Issuer Of SDR Bonds In China

On August 31, in what was dubbed a “historic event”, the World Bank became the first issuer of bonds denominated in SDR and settled in yuan when it sold 500 million SDR units worth of bonds in China. Then, overnight, in yet another historic event, Standard Chartered Bank (Hong Kong) said on Friday that it has obtained approval from the People’s Bank of China to be the first commercial issuer of bonds denominated in Special Drawing Rights (SDRs) in China’s interbank bond market.
According to Reuters the size of the issuance programme is 100 million SDRs – approximately 925 million yuan, or $139 million – and the bonds will be settled in yuan.
A successful offering would mark the first ever time a commercial issuer has issued securities have been issued in the synthetic reserve currency in 35 years.

This post was published at Zero Hedge on Oct 14, 2016.

Market Talk – October 14, 2016

What appeared to be an uncertain start turned into smiles and hugs all around. The Nikkei opened unchanged and drifted into the red for a short time until the weaker JPY helped exporters and even late in US trading remains above the 104 handle. Shanghai also went from strength to strength and the Yuan continues its drift and a little weekend profit-taking lifted prices together with sentiment. In late trading all core Asian indices remain firmer. Earlier additional Chinese data helped revive confidence after we saw a 1.9% print for September CPI, which still estimates a 6% growth rate.

This post was published at Armstrong Economics on Oct 14, 2016.

JPM Responds To Yellen’s “Dovish” Speech: “We Continue To Expect The Next Hike In December”

In an amusingly, and very symbolically, titled piece “Yellen steers left of the minutes”, JPM’s head of economic research Michael Feroli admits that while Yellen’s overall tone was dovish, the biggest bank by market cap continues to expect a December rate hike.
Here’s why, from JPM:
Yellen steers left of the minutes
Today’s talk by Fed Chair Yellen did not directly address the near term policy outlook, but the overall tone of the talk was dovish. Even so, we continue to expect the next hike in December. The sense conveyed by the minutes suggests that a strong majority is emerging in favor of another step before year end.

This post was published at Zero Hedge on Oct 14, 2016.

One Hedge Fund’s Market Summary: “The Good, The Bad, And The Ugly”… And An Important Chart

Courtesy of Loic Schmid, head of Asset Management & CIO at GS Banque SA, here is what the hedge fund manager see as the key issues in the market right now, in the first market report posted on his blog, long-short.ch, dubbed “The Good, the Bad, the Ugly”
The good
Risky assets still fueled/drugged by central banks Oil export countries seems to be [finally] agreeing on production and price stability Market talk that ECB might step into buying European equities = tailwind for EU markets Even though it’s not very impressive, global economic expansion remains steady (…) A lot of cash is sitting on the sidelines = ready to be deployed in stocks? Great rotation from bonds to equities might start soon or might have already started US recession fears unclear following latest PMI/ISM [better] reports Eurozone : latest economic data was encouraging China : latest economic data suggests stabilization FED: every time the FED is close to hiking, markets drop postponing decision UK : stronger economic data fueled by weaker GBP EUR: the weakening currency is having positive effects on European exporters Corporate activity : good M&A activity share buybacks

This post was published at Zero Hedge on Oct 14, 2016.

ECB’s Draghi Sends Corporate Yields So Negative Even He Can’t Buy Them

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
You can’t make this stuff up.
(Bloomberg) – The European Central Bank is starting to price itself out of the corporate-bond market as yields plumb such lows that some notes are no longer eligible for its purchase program.
ECB President Mario Draghi’s unprecedented buying of corporate debt has sent borrowing costs tumbling to a record and now yields on some securities are so low they fall outside the ECB’s own criteria. Yields on bonds from Paris’s public transport network have already dropped below the threshold of minus 0.4 percent, while those from Siemens AG, Europe’s biggest engineering company, French train operator SNCF and Sagess, which manages the nation’s strategic oil reserves, are also approaching the cut-off point.

This post was published at Wall Street Examiner on October 14, 2016.

“This Rarely Ends Well” – Traders Fear Ominous Divergence In S&P 500

Chinese FX markets are turmoiling…
And US equity market breadth is collapsing. As one trader noted, this “rarely ends well for stocks.”
As Bloomberg reports, such divergences, measured by comparing the S&P 500 and the number of constituents trading above their 50-day moving average, have been rare since 1990 — and are generally bad news for investors. In the seven instances that occurred before this year, all but two portended further losses in the next three months, with the S&P 500 falling a median 1.3 percent, according to data compiled by Sundial Capital Research Inc.

This post was published at Zero Hedge on Oct 14, 2016.

The Amazing Down Spiral of Atlanta Fed’s Q3 GDP Now Forecast

But is the auto sales data inflated? After a crummy first half, the US economy really, really needed a strong third quarter, more than a strong one, a heroic one, to pull the year out of the doldrums. And at first, according to the initial estimates by the Atlanta Fed’s GDPNow model, it looked like we would be getting it, which triggered a big sigh of relief around the country. But the plunge since those heady estimates in early August has been breathtaking.
The GDPNow forecasting model is attempting to estimate what the official first estimate of quarterly GDP will be. This ‘nowcast’ model takes in the data as it is released. Thus it gets more accurate as it closes in on the release date of the official first estimate of GDP. So this plunge is not propitious.

This post was published at Wolf Street on October 14, 2016.