Gold and What Moves it.
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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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Economic Signs of the Times: Is it a recovery yet? (Weekly report, 04-04-13)

Is it a recovery yet? (Weekly report, 04-04-13) 
A recovery would be indicated by weekly initial jobless claims holding below 500,000. (See this post.)

IT'S A RECOVERY! (And it has been a recovery for every week since the Nov. 25, 2009 report, with the exception of the Aug. 19, 2010 report.)

"The Labor Department said Thursday that 385,000 people filed for initial jobless benefits. That was up 28,000 from a week ago." (CNNMoney)

Jobless claims at four-month high, cast shadow over jobs market(Reuters) ...
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One Ton of Gold Seized in Small Car: On the Scene

April 4 (Bloomberg) -- Betty Liu reports on Italian police finding one ton of gold in a car. She speaks on Bloomberg Television's "In The Loop. (Source: Bloo...
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This is what big money does to escape. You also might think of it like the a flock of birds taking off before an earthquake. hat tip to www.zerohedge.com

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Pakistan buys 2.7 tons of Gold during first 8 months last fiscal

Pakistan imported about 2,645 kilogram of gold worth of $143.633 million was imported during the period under review as compared to the import of 1,805 kg valuing $96.917 million during same period of last year.

 

NEW DELHI(BullionStreet) : Pakistan imported nearly 2.7 tons of gold during the first eight months of the last fiscal year.

 

According to Pakistan’s commerce ministry, country imported about 2,645 kilogram of gold worth of $143.633 million was imported during the period under review as compared to the import of 1,805 kg valuing $96.917 million during same period of last year.

 

Pakistan's gold imports surged by 48.2 per cent as against the same period of last year.

 

Analysts attributed the increase in gold imports into the country mainly to the decrease in the global gold price which is witnessing declining trend since September 2012 when its price touched the highest level of $1795 per ounce.

 

Whereas the gold price on Thursday hit the lowest of $1539 per ounce. In Pakistan markets, the price has also gone down to Rs. 58700 per tola. ...

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Charles Hugh Smith: "The Carrot's in Reach:" The Myth of a Self-Sustaining Recovery

Charles Hugh Smith: "The Carrot's in Reach:" The Myth of a Self-Sustaining Recovery | Gold and What Moves it. | Scoop.it

The carrot of self-sustaining recovery will remain out of reach, for the policies presented as the path to recovery preclude the "virtuous cycle" everyone desires.


The enduring myth of the post-2008 era is that central-planning money printing and deficit spending would soon spark a self-sustaining recovery. Once consumers and businesses stepped up their own borrowing and spending, the central bank and state would then pare back money printing and deficit spending, as the increase in private-sector spending would fuel further borrowing and spending, i.e. become self-sustaining. The reality is the mythical self-sustaining recovery is the carrot dangled in front of a credulous public:though we're constantly reassured "we're almost there" (the promised land of self-sustaining recovery), the mythical recovery remains out of reach, no matter how much money is printed or borrowed and blown in fiscal stimulus. There are several key reasons for this.1. As noted yesterday, consumption is... 
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Gold Bullion: Neither Underpriced Nor Overpriced

Gold Bullion: Neither Underpriced Nor Overpriced | Gold and What Moves it. | Scoop.it

What ‘should’ an ounce of gold buy you…?


GOLD fell yesterday. The gold price could break all the way down to US$1000. But we don’t expect it. Gold is not in a bubble, says Daily Reckoning founder Bill Bonner.

 

As you have seen, gold is neither overpriced nor underpriced. It buys about what it should buy. Maybe a little less. Maybe a little more.

 

How do we know what gold ‘should’ buy?

 

We don’t, really. But gold is a natural thing. It is pulled from the earth by people, using the technology and resources available to them. As their productivity in other areas goes up, so does – generally – their ability to extract gold from the ground.

 

If GDP goes up 10%… the quantity of gold usually goes up about the same amount. If the economy goes into a decline, so does the gold mining industry… reducing the rate of growth of the gold supply.

 

For these reasons, the supply of gold is usually more or less in sync with the supplies of other goods and services. And the exchange rate between gold and other goods and services is usually stable. ...

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oftwominds-Charles Hugh Smith: The Proper Use of Credit

oftwominds-Charles Hugh Smith: The Proper Use of Credit | Gold and What Moves it. | Scoop.it

Great fortunes are built on the proper use of credit. Improper use of credit leads to mal-investment and wealth destruction.


We cannot understand our fundamental financial problems if we do not understand the proper use of credit. Credit has a key role in capitalism; credit-starved economies are underdeveloped economies, as economist Hernando De Soto explained in his masterwork, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. In the chronically underdeveloped economies De Soto describes, households have assets--land, dwellings, small businesses--but since the assets do not have legally recognized status as "property" (because the system for recognizing and registering property is both cumbersome and corrupt), they cannot act as collateral for borrowed capital, i.e. loans. As a result, the majority of the assets are "dead capital," difficult to sell, pass on to future generations or use as collateral. Great fortunes are built on the proper use of credit. The borrower needs capital to expand his/her enterprise, and the lender needs a fast-growing enterprise with collateral and an income stream to support a low-risk, high-yield loan. We can profitably look to Colonial America as an example of a credit-starved economy. In the wake of the Revolutionary war and the ratification of the Constitution (1789), the U.S. financial system was a mess: debts left by the war burdened the new government, which historian Thomas McCaw noted "started on a shoestring and almost immediately went bankrupt." ...
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Richard Russell: I Haven’t Seen Anything Like This In 60 Years

Richard Russell: I Haven’t Seen Anything Like This In 60 Years | Gold and What Moves it. | Scoop.it

On the heels of continued fears in the aftermath of the chaos out of Cyprus, and more concerns about the global banking system, today the Godfather of newsletter writers, Richard Russell, warns about something that he hasn’t seen in his 60 years of watching markets.  Below is what Russell had to say to subscribers:


“Investors continue to be amazingly complacent (the VIX is below 13).  The prevailing sentiment is -- nothing bad can happen as long as Ben Bernanke is in control.  And if something bad does occur, why worry -- we'll just step aside and get into cash.  This actually may make sense to most people, but what bothers me is that it is so darn pat.  I want to be optimistic, but when nobody worries, I worry.  

 

My attitude is like two explorers in a jungle dominated by savages One explorer turns to the other and whispers, “I don't like it.  It's too damn quiet out there.”  Which describes my current sentiment.  “I don't like it -- with all the things going wrong in the world, it's too damn quiet out there.” 

 

I believe the worst thing for one's health is stress.  And when I sense a stressful situation, one that I, personally, can avoid -- I avoid it.  Which is why I'm not in this market.  And maybe why I'm 88 years of age.  But that doesn't apply for my more adventurous subscribers.  I advocated buying the DIAs for my subscribers, most of whom probably have stronger stomachs and hearts than I do.  

 

The disconnect between the stock market and reality is becoming acute.  For instance, retirement has become an American dream.  New research by the Employee Benefit Research found that only 13 percent of workers felt that they would ever be able to stop working ...


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Former US Treasury Official - The Fed Is Facing A Wipeout

Former US Treasury Official - The Fed Is Facing A Wipeout | Gold and What Moves it. | Scoop.it

... Eric King:  “The desperate actions we are seeing on the part of governments and central planners right now, what does that tell you about how close we are to the end game?”

 

Dr. Roberts:  “The whole point is if the bond market collapses, interest rates explode.  When interest rates explode, stocks collapse.  That has always been the tradition.  So I think they (the Fed and central planners) are facing a wipeout, and they are doing what they can to prolong this.  


That is where they are, they are running out of time and means.  I think they feel they are close to the end game.  They are trying to stave it off.  Look, if you can pass the sinking ship to the next watch, if Bernanke can get out of there before it happens, that’s what they will do.


And we don’t know what the Fed is telling the Congress.  They may be telling them it’s better to get rid of social security in order to save the budget. ...

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Congress Triggers Early Stages of Hyperinflation-John Williams

http://usawatchdog.com/budget-deficit-exploding-out-of-control-john-williams/ John Williams of Shadowstats.com says the U.S. dollar could start selling off i...
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Helicopter QE will never be reversed - Telegraph

Helicopter QE will never be reversed - Telegraph | Gold and What Moves it. | Scoop.it
Readers of the Daily Telegraph were right all along. Quantitative easing will never be reversed. It is not liquidity management as claimed so vehemently at the outset. It really is the same as printing money.

 

Columbia Professor Michael Woodford, the world's most closely followed monetary theorist, says it is time to come clean and state openly that bond purchases are forever, and the sooner people understand this the better.

 

"All this talk of exit strategies is deeply negative," he told a London Business School seminar on the merits of Helicopter money, or "overt monetary financing".

 

He said the Bank of Japan made the mistake of reversing all its money creation from 2001 to 2006 once it thought the economy was safely out of the woods. But Japan crashed back into deeper deflation as soon the Lehman crisis hit.

 

"If we are going to scare the horses, let's scare them properly. Let's go further and eliminate government debt on the bloated balance sheet of central banks," he said. This could done with a flick of the fingers. The debt would vanish.

 

Lord Turner, head of the now defunct Financial Services Authority, made the point more delicately. "We must tell people that if necessary, QE will turn out to be permanent." ...

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Secretive Devaluations: Government Bails Out Of Its Own Currency Ahead Of The Citizenry

I came across an interesting story yesterday, translated from a Caracas-based news publication. It indicated that for the second time in only five weeks, the Venezuelan government has devalued its currency.

 

Unlike the first devaluation however, the second was done behind closed doors with local financial interests placing bids on dollar exchange transactions ahead of the country’s citizenry.

 

Caracas reporter Víctor Salmerón states that, “Two devaluations have been implemented in the last five weeks so as to obtain more bolivars per petrodollars…the forex rate was cut [devalued] by 46.5% from VEB 4.30 to VEB 6.30 per US dollar.” 

 

Salmerón adds that in the most recent devaluation,“Sicad did not reveal the price of the US dollars sold in the bid launched on March 26, [but] financial sources have said that companies paid VEB 11.00-14.00 per US dollar—that is twice the [previous] rate.” [ie. another 50% devaluation]

 

There are a few interesting things to note here. The first is that the Venezuelan government and a few financial interests are dumping their local currency behind closed doors ahead of the populace they’ve been elected to serve. ...

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Vietnam banks to issue only genuine Gold loans

According to a statement by country's central bank, SBV the regulation would strengthen the State's management of gold trading activities.

 

HANOI(BullionStreet): Vietnam banks are allowed to finance genuine working capital requirements of jewellery traders and manufacturers, but only with the approval of the central state bank.

 

According to a statement by country’s central bank, SBV the regulation would strengthen the State's management of gold trading activities.

 

The SBV also told credit institutions that they should not turn gold deposits into other currencies, including dong. They also must not use gold deposits as collateral for loans from other credit institutions.

 

The central bank has asked credit institutions to carry out measures to collect their loans that are now in gold, or turn these outstanding loans into dong-denominated loans. ...

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Supply constraints may hit India wedding season Gold sale

NEW DELHI(BullionStreet): World's largest gold consumer India is likely to witness supply shortages this wedding season, said Gems and Jewellery Export Promotion Council (GJEPC)

 

South India in particular is going to suffer from acute gold shortage this season as imports are yet to gain momentum after series of anti gold measures taken by the government, it said.

 

Analysts said major gold centers in South India like Kochi, Thrissur in Kerala and Coimbatore in Tamil Nadu are facing huge shortage of gold. These centres constitute around 15-20 per cent of India’s overall annual demand of the yellow metal. ...

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Eric De Groot: Fighting Fire With Fire Produces Godzilla-Like Outcomes

Eric De Groot: Fighting Fire With Fire Produces Godzilla-Like Outcomes | Gold and What Moves it. | Scoop.it

While "fighting fire with fire" (fighting crippling, historic, and failing debt burdens with unprecedented currency devaluation and stimulus - $1.4 stimulus announced today by Japan) extinguishes oil well fires with ease, it tends to produce Godzilla-like (destructive) outcomes when used as financial/policy solutions. ...

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Ed Steer in his Gold & Silver Daily on physical buying.

Ed Steer in his Gold & Silver Daily on physical buying. | Gold and What Moves it. | Scoop.it

... At the bullion store yesterday, it was the third day in a row where business was farabove normal...and only towards the end of the day did things slow down a bit...but only a bit.  We've sold more platinum and palladium in the last three days than we have in the last three months combined.  Lots of gold sales, too...but the vast majority of sales are silver...and it has always been that way.  The mood is different now. People are worried...about interest rates...the banks...Cyprus...you name it.  The idea of making a buck is still part of the buying equation, but it has become the secondary reason to buy since the Cyprus incident...especially considering the revelation that the Canadian government is considering the same policy with its own "too-big-to-fail" banks. ...

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Can a Cyprus-like "bail-in" occur with Gold?

Can a Cyprus-like "bail-in" occur with Gold? | Gold and What Moves it. | Scoop.it

The U.S. dollar, the world's de facto reserve currency since the Bretton Woods agreement in 1944, is more directly threatened by gold than any other currency. Much of the downward pressure on gold and the ramped-up negative publicity campaign against gold is likely a direct result of this competition.

 

By Nick Barisheff
Events in Cyprus have led to the realization that people who have worked hard and put their savings into a bank are technically lenders to the bank. In the case of insolvency they are “unsecured creditors,” and not automatically entitled to their own funds. Understandably, this has caused a great deal of concern amongst depositors and investors alike, especially to someone who has viewed economic activity from the standpoint of gold, as I have, for the past fifteen years.

A significant crisis in confidence is beginning to develop thanks to the light shined on the dark underbelly of central banking by the Cyprus fiasco. Central bankers know that the only thing keeping their Ponzi scheme, our modern fiat currency economic model, alive is confidence. The most important tools central bankers have in their arsenal are the right to create unbacked fiat currency, fractional reserve banking and the perception management resources they use to prevent mass withdrawal of funds. The right to create unbacked currency is the crown jewel privately owned central banks have fought to possess for hundreds of years .This privilege has come under more scrutiny over the past few years, thanks in large part to the Internet and to former Texas congressman Dr. Ron Paul, who educated an entire generation about the true nature of the Federal Reserve and its private ownership. 

Fractional reserve banking, which allows banks to lend out nine dollars for every dollar invested, works until there is a loss of confidence and people rush to ...

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Young Vs Old: A Tale Of Two US Job Markets | Zero Hedge

Young Vs Old: A Tale Of Two US Job Markets | Zero Hedge | Gold and What Moves it. | Scoop.it

Because we have discussed the issue of the age-bifurcated US jobs market extensively before, we are delighted to not have to say much if anything this time around, as absolutely everything is still the same. Since the arrival of Obama, the US workforce has been effectively split into two separate job markets: those 54 and younger (condolences) and those 55 and older. Specifically, since January 2009, the number of jobs created has been focused solely on the gerontocratic component of the US labor pool, those aged 55 to 69 (or more - gray line below), and who can no longer afford to retire as expected thanks to Bernanke's genocidal ZIRP policies which have made a mockery of savings. These older workers have seen a grand total of 4.02 million cumulative jobs created. Everyone else (or those 54 and younger - red line below)? A grand total of 2.8 million jobs lost, and now deteriorating once more, with those in the prime work demographic of 25-54 having lost the most jobs, 2.2 million, since the coming of Obama.

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Gold and Silver | Florian Grummes | Safehaven.com

Gold and Silver | Florian Grummes | Safehaven.com | Gold and What Moves it. | Scoop.it
Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 and last for 2-3 years or maybe later). Price target Dow Jones/Gold Ratio ca.

 

... Fundamentally, Gold is still in 2nd phase of this long term bull market. ...

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Yamada - Cyprus, Key Chart Plus #Gold & #Silver Commentary

Yamada - Cyprus, Key Chart Plus #Gold & #Silver Commentary | Gold and What Moves it. | Scoop.it

By Louise Yamada Technical Research Advisors, LLC ("LYA")

April 3 (King World News) - Gold:  A kickback rally has indeed taken place for Gold Spot price (GOLDS-1,605.25) (following the break of 1,600 through the lower channel boundary) toward, but not yet achieving, the upper channel boundary in place since last September (see Figure 21, left), and now struggling with the resistance of the declining 50-day MA. The breach of 1,600 also provided another test of the wide two-year trading range (consolidation?) for Gold between 1,539 and 1,800. The weekly momentum (see Figure 21, right) has flattened with the bounce but remains negative, and the monthly momentum (not shown) continues to trend down, leaving the potential for further weakness in place but allowing for a period of stabilization.

 

The longer-term concern detailed herein last month remains in place as does the monthly pattern depicting a potential top if the 1,539 level is breached ultimately.

 

The saucer potential for Gold to continue as a consolidation (see saucer, right), now running 18 months, in line with the 2008 period of consolidation, would have to extend into Q2 were Gold to improve the pattern and begin to move up again to challenge the upper trading range at 1,800. The 40- week MA provides the next resistance at 1,665 were the rally to continue and would represent a slight penetration of the daily downward channel.

 

Currently Gold’s intention remains unclear technically, with the still-negative momentum indications. We would be inclined to await further evidence before taking a position in either direction. (See the more extensive discussion herein last month.) ...

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Talking Gold Manipulation with GATA | Gold Investing News

Talking Gold Manipulation with GATA | Gold Investing News | Gold and What Moves it. | Scoop.it

Gold Investing News sat down with Chris Powell of the Gold Anti-Trust Committee to discuss what is going on in the gold market in terms of manipulation

 

GIN: Can you outline how the gold manipulation scheme works?


CP: Sure. Central banks that want to support their currencies — and support the US dollar in particular — want to control interest rates and government bond prices, so they intervene in the gold market by selling their gold outright, by leasing it into the market through bullion banks and the Bank for International Settlements (BIS) and by swapping it to other central banks that will be doing these sales or leases. They also sell gold options and futures contracts through the BIS. They do a lot of shorting of gold to control the price.


GIN: Who is involved in this manipulation scheme?


CP: I think all the major western central banks are at least aware of it and are cooperating, if not participating. I think all of the western central banks that were identified openly as being part of the London gold pool in the 1960s are certainly cooperating with it. Though I think the major ones lately have been the US, the Bank of England and the Bundesbank. But I think any central bank that has been identified as having swapped or leased gold is a participant.


GIN: So, you’d say that the gold cartel is composed of central banks?


CP: It is a central bank scheme, but they operate very often through agents like bullion banks, JPMorgan Chase & Company (NYSE:JPM) and HSBC. The BIS in Basel, Switzerland conducts much of the gold trading for the western central banks. So certainly the BIS is an agent as much as the bullion banks are. ...

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Largest Dutch bank defaults on physical gold deliveries to customers « Jim Sinclair's Mineset

Largest Dutch bank defaults on physical gold deliveries to customers « Jim Sinclair's Mineset | Gold and What Moves it. | Scoop.it

More information of the gold versus credit letter from Amro to their clients.

 

You will read about this ETF in the not too distant future.


Largest Dutch bank defaults on physical gold deliveries to customers 
April 3, 2013 
By: Kenneth Schortgen Jr


Last week, a rubicon was crossed in the precious metals market as one of the largest banks in Europe defaulted on their gold contracts, and informed their customers there was no physical gold available for delivery.


ABN AMRO, the largest Dutch bank in the Eurozone, issued a letter to their gold contract customers of failure of delivery, and instead will pay account holders in a paper currency equivalent to the current spot value of the metal.


ABN AMRO, the biggest Dutch bank, has sent a letter to its clients stating that they will no longer be able to take physical deliveries of the gold they have bought through ABN. Instead they are offered money at the current market rate for gold. Basically, instead of owning a risk free, physical asset (a gold bar or a gold coin), the bank’s clients now own a monetary claim on ABN AMRO, being exposed to the bank’s credit risk. – Voice of Russia ...

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Jesse's Café Américain: Bank of Japan to Pursue Qualitative and Quantitative Easing - Double Their Monetary Base

Jesse's Café Américain: Bank of Japan to Pursue Qualitative and Quantitative Easing - Double Their Monetary Base | Gold and What Moves it. | Scoop.it

... As you may recall, Japan has been unable to stimulate their economy despite spending rather significant sums on infrastructure and other stimulus projects.  The lack of reform in their fairly well entrenched and pervasive crony capitalist keiretsu structure, which one might say is about a half step removed from outright feudalism, has resisted all their best attempts at livening things up. 

And the declining demographics of an island nation that discourages immigration is certainly no help either.  But I would not discount the tax that corruption and inefficiency plays in dampening GDP growth, post bubble.  Corruption creates inefficiency, fraud, and malinvestment, always and everywhere.  Just ask China.

This major policy shift to inflation may help to explain the relentless hammering of the precious metals ...

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Ed Steer on SLV: #Gold & #Silver Daily

Ed Steer on SLV: #Gold & #Silver Daily | Gold and What Moves it. | Scoop.it

... In the last seven or eight business days, silver has been smacked for about three bucks...and during that period, SLV has only declined by 300,000 ounces or so.  I'd love to be a fly on the wall over there just to get a quick peek at what is going on internally in that ETF.  I'm sure that what I'd see would be amazing...as what is happening there is as far from normal as you can possibly get. ...

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Alarm bells ringing for gold bugs!

Alarm bells ringing for gold bugs! | Gold and What Moves it. | Scoop.it

With commodities in general taking a hammering in the markets at the moment, neither silver or gold have escaped. In the last two days, the dramatic falls in silver, have also been reflected in gold futures, with the June contract trading lower once again overnight on Globex as we test the $1540 per ounce level.

 

The consolidation phase for gold extended throughout March, with the upper resistance level clearly defined by the red dotted line on the daily chart, in the $1620 per ounce area. This level was tested on several occasions and finally posted an isolated pivot high, which gave the market a further push lower towards the end of last month.

 

Whilst Tuesday’s price action was important, ending with a wide spread down candle, it was yesterday’s trading session which was significant, breaking below potential support in the ...

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Overnight Sentiment: Central Banker Bonanza | Zero Hedge

With all three major non-Fed central banks on the tape today, all economic data will be merely "noise" as the market digests what the central-planners' intentions are. The BOJ came and went, and following its substantial balance sheet expansion announcement, which many called "shocking and awing" the USDJPY has pushed higher by 2.5 big figures, although not reaching the 96 levels seen prior to Kuroda's actual announcement. In fact, from this point on there is likely downside as Japan's biggest export competitor, South Korea, has no choice but to join the race to debase which in turn will be JPY-positive. The Bank of England is next, which as expected did nothing moments ago, and will keep doing nothing until Carney joins officially this summer. In some 45 minutes, the ECB headlines will hit the tape where Draghi may bur more likely may not lower deposit rates, and instead will focus on recent deterioration in the economy. None of this will be surprising, and the EUR continues to trade sufficiently weak in line with sub-200DMA levels seen in the past few weeks. What we look forward to the most will be Draghi once again discussing the legal term-sheet details of the ECB's OMT program. His answer will be amusing as there still is no answer, and the OMT is for all intents and purposes the biggest straw man ever conceived by a central bank.

 

In actual economic news, we had the monthly Service PMIs out of Europe, which one again missed and declined at the headline level, dropping from 47.9 to 46.4, below expectations of 46.5. This time, unlike the Mfg PMIs earlier, it was the periphery that did better than expected (Spain 45.3, Exp. 44.7, 21st straight month of contraction; Italy 45.4, Exp. 43.5, Last 43.6) and the core that deteriorated (Germany 50.9, Exp. 51.6, Last 54.7; France 41.3, Exp. 41.9, Last 43.1). The only good news, if any, come from the UK, whose Service PMI rose from 51.8 to 52.4, above expectations of a drop to 51.5. Expect the UK economy to deteriorate substantially in the coming months in order to justify the massive QE that will be unleashed by the Goldmanite when he finally arrives. ...

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