Saturday, January 12, 2013

Food prices soar in China/Moody's lowers ratings on Cyprus to Caa3/UK industrial production rises to only .3%

Good morning Ladies and Gentlemen:


Gold closed down $17.30 to finish the comex session at $1660.  Silver closed down by 51 cents to $30.37
The bankers never let gold/silver rise two days in a row and thus the reason for the raid on Friday.  Gold and silver got clobbered with news that the trade deficit widened to 48 billion USA which in turn will cause the GDP for this quarter to fall below 1%.

In other news, Japan finally unleashed it's $117 billion spending program.  The Yen fell to the 89Yen/USA mark. Moody's lowered it's ratings on Cyprus to Caa3 stating that this sovereign must recapitalize its banks.
The assets of its banking sector is 8.3 x Cyprus' GDP with  bad debts 135% of it's GDP.  The German finance minister announced that he believed it's GDP shrunk this quarter.  The UK also saw it's industrial production rise to only .3% instead of projected .8%.

China saw its inflation rate rise by over 2.5% as food prices soar. China will not provide stimulus to it's markets with a high food inflation rate.  They are afraid that the stimulus will knock food prices into the stratosphere.  We will go over these and other stories but first...................................................




Let us now head over to the comex and assess trading on Friday.

The total comex gold OI rose by 2584 contracts from 441,480 up to 444,044. The non active January contract month saw it's OI remain constant at 60.  We had 0 delivery notices filed on Thursday so we neither gained nor lost any gold ounces standing.  The next active contract month saw it's OI fall from 230,049 down to 215,011 for a loss of 15,038 contracts.   Most of these guys rolled into April. The estimated volume at the gold comex on Friday was pretty good at  207,788 however you must consider that we had quite a few of those rollovers. The confirmed volume on Thursday came in at 189,987.


The total comex silver open interest rose by 2281 contracts from 138,841 up to 141,122.  We are now back above the 140,000 level again. The non active January contract saw it's OI rise by 13 contracts from 142 up to 155.  We had 1 delivery notice filed on Thursday so in essence we gained 14 contracts or an additional 70,000 oz of silver will stand for delivery in January. The next big active contract month for silver is March and here the OI fell by 357 contracts from 77,223 down to 76,866.  The estimated volume on Friday, at the silver comex came in at a respectable 52,073.  The confirmed volume on Thursday came in at
49,603.






Comex gold figures 



Jan 11.2013    The  January contract month




Ounces
Withdrawals from Dealers Inventory in oz
11,199.53 (Brinks)
Withdrawals from Customer Inventory in oz
35,980.3 (Brinks,HSBC,JPM,Scotia)
Deposits to the Dealer Inventory in oz
0   (nil)
Deposits to the Customer Inventory, in oz
21,002.175 (HSBC,JPM)
No of oz served (contracts) today
 9    (900)
No of oz to be served (notices)
60  (6,000 oz)
Total monthly oz gold served (contracts) so far this month
902  (90,200 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
17,799.16
Total accumulative withdrawal of gold from the Customer inventory this month


 
316,477.8 oz

The dealer had no deposits but did have 1    withdrawal.

i) out of Brinks:  11,199.53 oz




We had 2   customer deposits

i) into HSBC:  3,858.000 oz  (perfectly round deposit)
ii) into JPM: 17,144.175 oz

total deposit:  21,002.175 oz

We had 4 customer withdrawals:

i)Out of Scotia:  100.90 oz
ii) Out of HSBC: 6,202.65
iii) Out of JPMorgan  3695.40
iv) Out of Brinks: 25,981.35 oz 


Total customer withdrawal:  35,980.30 oz








We had 1 adjustment:

Out of Brinks:  399.91 oz was adjusted out of the dealer and back into the customer account.






Thus the dealer inventory rests tonight at 2.270 million oz (70.6) tonnes of gold.


The CME reported that we had 9 notices filed or 900 oz of gold. To obtain what is left to be served upon, I take the OI for January  (60) and subtract out Fridays delivery notices (9) which leaves us with 51 notices or 5,100 oz of gold left to be served upon our longs.

Thus the total number of gold ounces standing in this non active month of January is as follows:

90,200 oz (served)  +  5100 oz (to be served upon) =   95,300 oz or 2.96 tonnes.
we neither gained nor lost any  oz of gold standing for the January delivery month.

Generally, January is a very weak delivery period for both gold and silver and thus the 2.96 tonnes of gold is quite a surprise.


Silver:




January 11.2013:   The January silver contract month





Silver
Ounces
Withdrawals from Dealers Inventory1,551,583.25 (Brinks,CNT)
Withdrawals from Customer Inventory  1,235,282.87  (Brinks, HSBC,JPM)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory   975,656.02 (Brinks,Scotia,Delaware)
No of oz served (contracts)1  (5,000 oz)
No of oz to be served (notices)141  (705,000 oz)
Total monthly oz silver served (contracts)506  (2,530,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month2,465,925.6
Total accumulative withdrawal of silver from the Customer inventory this month3,021,963.0

Today, we  had huge activity  inside the silver vaults.

 we had no dealer deposits.

We had the following dealer withdrawal:

i) Out of Brinks:  670,342.25 oz
ii) Out of CNT: another perfectly round 881,241.000 oz

total dealer withdrawal:  1,551,583.25 oz




We had 2 customer deposits of silver:

Into Brinks:  300,528.97 oz oz
Into JPM:  675,127.05 oz


total customer deposit; 975,656.02 oz

we had 3 customer withdrawals:



i) out of Brinks:  599,286.82 oz  
ii) out of HSBC: 27,008.300 oz
iii) out of JPM: 608,987.75

total customer withdrawal:  1,235,282.87  oz






we had 0  adjustments:

I have still not received any answer from the CFTC  regarding the round numbered deposits/withdrawals in gold and silver we have been witnessing lately, especially from the CNT vault. 

When you see massive deposits and withdrawals you know that there is turmoil inside the silver vaults. 

  
Registered silver remains today at :  37,979 million oz
total of all silver:  148.95 million oz.





The CME reported that we had 11  notices filed for 55,000 oz of silver.  To obtain what is left to be served upon, I take the OI standing for January (155) and subtract out Wednesday's delivery notice (11) which leaves us with 144 notices or 720,000 oz left to be served upon our longs.

Thus the total number of silver oz standing for the month of January is as follows:

2,585,000 oz (served)  +  720,000 (oz to be served upon)  = 3,305,000 oz
we  gained 70,000 oz of additional silver  standing for January. This is turning out to be a great delivery month for silver as we now surpass the  3 million oz mark in amounts  standing.




end



The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.



Total Gold in Trust:   Jan 11.2013 









Tonnes1,337.73

Ounces43,009,312.88

Value US$71.274  Billion











Tonnes1,337.73

Ounces43,009,312.88

Value US$72.027 Billion






Jan 9.2013:













Tonnes1,339.84

Ounces43,077,092.80

Value US$71.398 Billion







Jan 8.2013














Tonnes1,339.84

Ounces43,077,092.80

Value US$71.324  billion






Jan 7.2013:















Tonnes1,342.09

Ounces43,149,400.96

Value US$70.955  Billion








we neither gained nor lost any gold at the GLD on Friday.



and now for silver:

Jan 11:2013:




Ounces of Silver in Trust325,792,488.600
Tonnes of Silver in Trust Tonnes of Silver in Trust10,133.28


Jan 10.2012:



Ounces of Silver in Trust325,115,347.800
Tonnes of Silver in Trust Tonnes of Silver in Trust10,112.22



jan9.2013:

Ounces of Silver in Trust325,115,347.800
Tonnes of Silver in Trust Tonnes of Silver in Trust10,112.22






Jan 8.2013:



Ounces of Silver in Trust325,115,347.800
Tonnes of Silver in Trust Tonnes of Silver in Trust10,112.22


Jan 7.2013;




Ounces of Silver in Trust323,470,757.600
Tonnes of Silver in Trust Tonnes of Silver in Trust10,061.07




Jan 4.2013:




Ounces of Silver in Trust323,470,757.600
Tonnes of Silver in Trust Tonnes of Silver in Trust10,061.07



we  gained 677,000 oz silver at the SLV.





And now for our premiums to NAV for the funds I follow:





Sprott and Central Fund of Canada. 




(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)



1. Central Fund of Canada: traded to a positive 4.3 percent to NAV in usa funds and a positive 4.7%  to NAV for Cdn funds. ( Jan 11 2013)   

2. Sprott silver fund (PSLV): Premium to NAV rose to 1.79% NAV  Jan 11./2013
3. Sprott gold fund (PHYS): premium to NAV  rose to 2.28% positive to NAV Jan 11/ 2013..

 Now we witness the Central fund of Canada  gaining big time in its positive to NAV, as we now see CEF at a positive 4.3% in usa and 4.7% in Canadian.This fund is back in premiums to it's former self with respect to premiums per NAV. 

The silver Sprott fund announced a big silver purchase and this reduces the premium to NAV temporarily.  It seems that the bankers are picking on Sprott to short their funds trying to cause an avalanche in selling in the precious metals.  They are foolhardy in their attempt.

It looks like England may have trouble in finding gold and silver for its clients.
It is worth watching the premium for gold at the Sprott funds which is a good indicator of shortage as investors bid up the premiums.

 

end

At 3:30 pm Friday we received the COT report on position levels of our major players.

First, let us head over to the gold COT and see what we can glean from it:



Gold COT Report - Futures
Large Speculators
Commercial
Total
Long
Short
Spreading
Long
Short
Long
Short
193,869
51,061
34,559
152,103
330,575
380,531
416,195
Change from Prior Reporting Period
-4,791
920
12,906
8,893
-1,294
17,008
12,532
Traders
188
73
74
58
44
282
161
Small Speculators
Long
Short
Open Interest
60,773
25,109
441,304
-3,695
781
13,313
non reportable positions
Change from the previous reporting period
COT Gold Report - Positions as of
Tuesday, January 08, 2013


Our large speculators:

Our large specs that are long in gold, pitched a rather large 4791 contracts from their long side.
Our large specs that are short in gold added 920 contracts to their short side.

Our commercials;

Those commercials that are long in gold and are close to the physical scene added a rather large 8893 contracts to their long side.

Those commercials that are short in gold covered 1294 contracts form their short side.


Our small specs:


Those small specs that are long in gold covered a rather large 3695 contracts from their long side

Those small specs that are short in gold added 781 contracts to their short side.

Conclusion:  hugely bullish as our commercials went net long 10,184.





and now for our silver COT:





Silver COT Report: Futures
Large Speculators
Commercial
Long
Short
Spreading
Long
Short
37,257
9,163
30,195
44,977
86,242
-1,034
59
-982
-438
-4,509
Traders
75
30
52
35
37
Small Speculators
Open Interest
Total
Long
Short
137,542
Long
Short
25,113
11,942
112,429
125,600
-1,493
1,485
-3,947
-2,454
-5,432
non reportable positions
Positions as of:
134
101
Tuesday, January 08, 2013
© SilverSeek.com


Our large speculators:

Those large specs that are long in silver pitched 1034 contracts from their long side

Those large specs that are short in silver added a tiny 59 contracts to their short side.

Our commercials:


Those commercials that have been long in silver and are close to the physical scene pitched a tiny 438 contracts from their long side.


Those commercials that have been short in silver covered a rather large 4509 contracts.


Our small specs:


Those small specs that have been long in silver pitched 1493 contracts from their long side.

Those small specs that have been short in silver added 1485 contracts to their short side.

Conclusion:  bullish as the dealers went net long by 4071 contracts.   

end




Here are your major physical stories:

 Gold trading from Europe and Asia overnight Thursday and early Friday morning:


Gold hits its high for this year at 4820 yen per gram (1699.00 per oz) as investors are starting to wonder about Abe's stimulation plan.  The government approved 117 billion USA in spending stimulation to kick start their economy.

(your early morning gold trading courtesy of Goldcore)



Trillion Dollar Platinum Coin Is "Not The Solution" - PIMCO's Gross

Tyler Durden's picture




From GoldCore
Trillion Dollar Platinum Coin Is "Not The Solution" - PIMCO's Gross
Today’s AM fix was USD 1,669.50, EUR 1,258.29 and GBP 1,036.25 per ounce.
Yesterday’s AM fix was USD 1,663.00, EUR 1,269.37 and GBP 1,036.65 per ounce.
Silver is trading at $30.68/oz, €23.24/oz and £19.12/oz. Platinum is trading at $1,629.00/oz, palladium at $694.00/oz and rhodium at $1,150/oz.

Cross Currency Table – (Bloomberg)

Gold climbed $15.50 or 0.94% in New York yesterday and closed at $1,672.90/oz. Silver surged to a high of $30.926 and finished with a gain of 1.45%. The yellow metal was on track for a 1% weekly rise, after falling for five of the past six weeks.
Gold edged off in euros on Friday, following the European Central Bank’s decision to keep its rates unchanged.
Japan's gold market (TOCOM ) made news as benchmark Tokyo gold futures hit a record high of 4,820 yen a gram ($1,699.62 an ounce) after the yen dropped to a 2-1/2-year low vs. the dollar on expectations of more QE by the BoJ.
Japanese Prime Minister Shinzo Abe made has pushed increased jobs growth as part of the Bank of Japan’s directive as his government approved $117 billion of spending to revitalize the economy in the biggest stimulus since the financial crisis.
Abe is leaning hard on the BOJ to adopt a 2% inflation target at its January 21-22 rate review, which is double its current goal, and consider easing monetary policy again, most likely by increasing government debt and asset purchases, sources told Reuters.
Spain's first debt auction of the year was positive, as appetite for high-yielding assets improved.
PIMCO founder and co chief investment officer Bill Gross gives no credence to the trillion dollar platinum coin scheme.
Concerns over the debt ceiling have prompted Washington politicians and political and economic activists to argue that the U.S. treasury should simply use its authority to mint a platinum coin worth $1 trillion.
Platinum in USD, 2 Years – (Bloomberg)
Proponents argue the coin could be deposited at the Federal Reserve Bank of New York to cover the Federal government’s debts until and unless Congress raises the debt limit.
Gross acknowledges that they can do this and says it is not a novel idea as it has been advanced in the last several years.
However, whether Bernanke and Treasury in combination would jeopardise their standing with Congress by this type of "end run" ... no we "don't give it much credence."
We feel that such an action would not only jeopardise the U.S. Fed and Treasury standing with Congress but with creditor nations internationally - particularly the Russians and Chinese.
It appears to be a bit of a stunt by and may be a convenient distraction away from the substantive issue of how the U.S. manages to address its massive budget deficits, national debt and unfunded liabilities of between $50 trillion and $100 trillion. It may also be designed to create the false impression that there are easy solutions to the intractable US debt crisis - thereby lulling investors and savers into a false sense of security ... again.
Gross said that subject to the debt ceiling, the Fed is buying everything that Treasury can issue. He warns that we have this "conglomeration of monetary and fiscal policy" as not just the US is doing this but Japan and the Eurozone is doing this also.
Gross has recently criticised the Fed's 'government financing scheme.'  He has in recent months been warning of the medium term risk of inflation due to money creation and recently warned of 'inflationary dragons.'
Gross in his monthly Investment Outlook note to clients of the world's biggest bond fund, argues that the quantitative easing and near zero  interest rate strategies employed by central banks in the US, UK, Europe and Japan, China and Switzerland have the potential to permanently distort financial markets and create significant long-term inflation risks.
 
Gold in USD, 2 Years – (Bloomberg)
Incredibly, the world's most important central banks have issued more than $6 trillion dollars' worth of "essentially free" money into the global economy since the financial crisis in a misguided recovery effort that could erode stocks, bonds and currencies for generations to come.
"While they are not likely to breathe fire in 2013, the inflationary dragons lurk ... a case of quantitative easing," Gross wrote. The tactics, he says, "destroy financial business models and stunt investment decisions which offer increasingly lower (equity and investment returns). Purchases of 'paper' shares as opposed to investments in tangible productive investment assets become the likely preferred corporate choice."
Thus, PIMCO remain favorably disposed towards gold as an allocation in a portfolio.
On December 30, PIMCO tweeted @PIMCO:Gross: 2013 Fearless Forecasts: 1) Stocks & bonds return less than 5%. 2) Unemployment stays at 7.5% or higher 3) Gold goes up……
For breaking news and commentary on financial markets and gold, follow us on Twitter.
NEWS
COMMENTARY


end

(courtesy Hinde Capital/GATA)


Gold price to explode soon, Hinde Capital's Davies tells King World News

 Section: 
3:30p ET Friday, January 11, 2013
Dear Friend of GATA and Gold:
Britsh gold fund manager Ben Davies, CEO of Hinde Capital, today sticks his neck way out in an interview with King World News, explaining why he thinks an explosion in gold is imminent as central bankers undertake to engineer inflation. An excerpt from Davies' interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end

Quaintance and Brodsky have delivered quite a paper.  A must read:

(Quaintance and Brodsky/GATA)


Quaintance and Brodsky: Enough of the favoritism -- get on with the devaluation

 Section: 
8:28p ET Friday, January 11, 2013
Dear Friend of GATA and Gold:
In their new reflection on the world economy and international financial system, the economists and fund managers Lee Quaintance and Paul Brodsky of QB Asset Management in New York (http://qbamco.com/) have had enough of central bank favoritism and subsidies to big banks and rich folk with access to discounted capital, the financial gaming that has indefinitely postponed real economic growth, the scheming for faster mechanisms of infinite money creation (like the trillion-dollar platinum coin) and market leverage, and the loss of sensible valuations. Time, Quaintance and Brodsky say, to get on with the big reset, the worldwide devaluation of currencies and their pegging to sovereign gold reserves.
Indeed, the blatant suppression of gold futures prices over the last few months even as international financial conditions have gotten crazier hints at the surreptitious redistribution of sovereign gold in advance of coordinated devaluations that Quaintance and Brodsky mused about last May:
With the continuing kind permission of Quaintance and Brodsky, their new paper, titled "Macro Polo" -- as in macro-economics -- has been posted in PDF format at GATA's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end
Your early morning overnight sentiment from Europe/Asia:  


Major points:

1.Sentiment is shaped strictly by lack of Chinese stimulus.
2. Japan approves 117 billion usa stimulation bill which causes the Yen/USA to shoot above 89.00
3. Ratings on Cyprus plummets to Caa3 cut by Moody's).  This nation badly needs to recapitalize it's banks.
4. German economic minister believes Germany's GDP shrunk this quarter.
5. UK industrial production missed expectations of a rise of .8% and instead received a slight gain of 0.3%

6. Euro rate cut now off the board and this propelled the Euro to 1.335

Sentiment Shaped By Chinese Stimulus Stinginess vs Japanese Generosity

Tyler Durden's picture




It is not often that early sentiment is defined by developments out of Asia but this is precisely what has happened overnight.
The Alcoa "hope rally", which saw the company close red on the day of its earnings, but which sent the markets higher on the CEO's announcement that things in China may be improving, seem to be ending following last night's news out of China which saw December CPI jump to 2.5%, substantially more than expected, following a spike in food costs in part from the coldest weather in 28 years, implying any good news may have already been priced in. This renewed fears that speculation of PBOC easing was largely unjustified (it is) leading to the biggest drop in the Shanghai Composite in 2013, pushing it lower by 1.78%.
The offset came out of Japan, where the government approved a JPY10.3 trillion ($116 billion) fiscal stimulus package. This together with expectations of a BOJ 2% inflation rate targeting, are the reasons why the Dollar Yen soared to a fresh multi-year high of over 89.30, which has since regained some of the move. At this point virtually all the Japanese hope has been bought, and the actual BOJ announcement coming later this month will launch the "sell the news" mean reversion.
Shitfing to Europe we find more bad news, as Germany's economy minister announced that the country's economy "may have shrunk" in Q4 setting the first leg of an official recession (remember two consecutive negative quarters are needed for a formal recession announcement). Not helping was the UK, whose industrial production missed expectations of a 0.8% rise, printing at 0.3%, and Spain, whose November Industrial Output plunged 7.2% on expectations of a modest 4.0% drop from -3.1% in October.
In other news, Moody’s cut Cyprus’s credit rating three steps to Caa3 on government’s increased debt load to recapitalize banking     system. Italy sold €5 billion of debt, with 2015 notes drawing 1.85%, down from 2.5% paid Dec. 13 and lowest since March 2010.
In the US, trade data is the only relevant macro point, while the financial earnings season is kicked off by Wells Fargo.
More from DB:
Draghi yesterday disappointed those hoping for a rate cut in the next few months. Although the ECB’s view on the macro was little different to last month, there’s little doubt that there was more confidence in Draghi’s performance and in the press release. As our economists pointed out ‘Improved fragmentation/segmentation’ was mentioned three times in the prepared press statement. Last month it was mentioned once and used as a negative, not a positive. Draghi was also in bullish mood in the Q&A, discussing declining yields and CDS spreads, rising capital inflows, rising deposit bases at periphery banks and the declining usage of the ECB balance sheet and Target2. Draghi summarised this as “positive contagion”. Although they highlighted that risks remain this was hardly the performance of a governing council minded to cut rates soon. Indeed our Euro economists have now removed their March 25bp cut expectations and now expect the ECB to remain on hold for the foreseeable future. As they quote from the conference, last month a rate cut had been “widely discussed”. This month, no one “asked for it” and the Council was unanimous in leaving rates unchanged.
So although this increased confidence should be good news the European market reaction provided us with some clues as to how addicted markets are to liquidity. European markets peaked just before the press conference with the DAX +0.6% and at the day’s high before closing -0.16%. However the US did go through a similar initial reaction to last week’s Fed minutes and has now climbed to higher levels. Indeed after the lows near the European close the S&P 500 rallied 0.7% to end 0.75% higher and at 5-year highs. The reality is that it would be very bad for markets if central banks started to withdraw liquidity. However we’re not there yet but Europe has to be careful they don’t relax as there’s a very long way to go. Often in this crisis when the ECB has relaxed, problems have resurfaced a few months later.
So with a rate cut seemingly off the table for now, EURUSD rallied 1.3% following Draghi’s press conference to close 1.6% higher in its best one-day performance since August 3rd 2012. Incidentally that day came after the ECB’s August meeting where Draghi disappointed a market that was expecting an ECB bond purchase to be finalised (the OMT was eventually unveiled a month later).
Elsewhere, it was a strong day for peripheral bond yields. The 10yr Spanish bond yield (-23bp) closed below 5% (4.904%) for the first time since March 9th 2012. Italy’s 10yr yield (-11bp) is also at its lowest level in more than 2 years. A good Spanish bond auction was a main driver. Spain raised EUR5.8bn (vs EUR5bn targeted) and our economists noted that most of the supply was in the shorter-maturity that would be covered by OMT purchases if Spain asked for aid. Nevertheless, market momentum is strong enough that our economists no longer believe that Spain or Italy will need to trigger OMT in Q1 of 2013.
Elsewhere in what was welcome and slightly surprising news for investors in the UK index-linked gilt market, the Office for National Statistics decided to leave the calculation of the retail price index unchanged. The national statistician did say that she accepts that the RPI formula “has an upward bias” of nearly 1% per year though.
Across the Atlantic, American Express surprised the market with an earlier than expected profit release. The post-market result was broadly in line with both earnings (EPS $1.09 vs $1.06 expected) and revenue ($8.1bn vs $8.11bn) close to consensus. AMEX’s stock rose by about 1% in extended hours trading probably buoyed by the unveiling of restructuring plans for the company’s travel business. Over to Asia, it has been a busy 24 hours in Japan after overnight comments from PM Abe that the BoJ should follow the Fed’s lead and target employment as one of its monetary policy targets. The comments are driving the Nikkei (+1.45%) to its 23-month highs  overnight while the USDJPY is 0.35% higher. Mr Abe added that he wants the central bank “to have responsibility for the real economy too”. According to the same newspaper, a joint statement between the government and the BoJ specifying a 2% inflation target is in the process of being drafted. If that wasn’t enough, Abe announced that a JPY10 trillion fiscal stimulus package has been approved by cabinet on Friday which the government expects will boost growth by 2% and create 600,000 jobs. Including local government and private sector spending, the stimulus package is expected to be worth around JPY20 trillion and will focus on infrastructure building (Bloomberg). Japanese data also added more Yen weakness with current account surplus shrinking to a seasonally-adjusted JPY225.9bn in November (vs October’s JPY414.1bn surplus).
The Nikkei is the clear outperformer overnight on the back of the new stimulus as major equity bourses across the region are generally lower. The Shanghai Composite and KOSPI are both down by about half a percent as we type. Stronger-than-expected inflation data (2.5% vs 2.3% yoy) is driving Chinese equities lower as hopes of additional stimulus fade.
The Bank of Korea’s decision to hold rates unchanged also had a similar impact on local equities. The tone in Asian credit is also weaker as we saw more selling of HY bonds in secondary although the primary pipeline still remains robust. S&P 500 Futures are broadly unchanged while the 10-year UST yield is up by 1bps to 1.906% overnight.
Moving on to the day ahead we will get Industrial Production from the UK and Spain today. There is also an Italian bond auction. US trade data will probably be the most interesting data point of note on the other side of the pond. The Fed’s Plosser will speak about the economic outlook at a forum today which may generate some sound bites. Otherwise Wells Fargo’s Q4 results today will also officially kick off the earnings season for US banks.


end



Graham Summers on the most important critical issue in China:  food prices

(courtesy Graham Summers/Phoenix Research Capital)


The Investment World is Missing the Single Most Critical Issue In China
The investment world is convinced that China is about to engage in another massive round of stimulus. After all, this is what China did in 2008 when its economy slowed, so surely this is what they'll do now that the economy is slowing again.
The fact of the matter is that China cannot and will not do this. The reason is that the Chinese Government today is facing a very different set of circumstances than it was in 2008.
Since 2008, global Central Banks have printed $10 trillion in new money. Between this and the supply shock to natural resource companies created by credit drying up in the crash, the inflation genie is now officially out of the bottle.
This is most clear in China, where workers have begun demanding wage increases.
With nearly a third of its population living off less than $2 per day, any bump in food prices hits China much harder than the US or other developed nations.
Chinese workers are now demanding higher wages to survive. Indeed, this situation is so serious that many multinational manufacturing firms are in fact moving facilities to the US because of the greater stability there. Apple, Ford, GE, Bridgestone and many others have announced this.
Even China's official data shows inflation is at a seven month high. Chilly weather is blamed in the official reports, but the truth is that China has a major problem with food inflation regardless of the weather.
The Chinese Government cannot suddenly print a massive amount of money without facing massive civil unrest. We already know that the Government is deeply concerned about losing its grip on society from the fact that it is making a very public display of cracking down on corruption.
This is meant to appease a population that has realized A) it's no longer better off than before B) many government officials and their families are getting wealthy through corrupt means.
So China cannot and will not be engaging in massive stimulus for the simple reason that doing so would kick off a very dangerous wave of civil unrest. Indeed, China's new party leader Xi Jinping has openly stated that China will not be pursuing high growth rates through stimulus going forward.
This is why, smart investors are already taking advantage of the lull in the markets today to position themselves for several key issues (including the misguided beliefs in China that we've analyzed above). 


While everyone else continues to believe the fairytale story spun by the political class and mainstream media, our Private Wealth Advisory newsletter subscribers have already been warned of these issues and are taking action (just as they did in early 2008 when others were bullish, or in 2010 when the EU crisis first began to take off).


Graham Summers

end




Marc to Market comments on the currency exchanges:

(courtesy Marc to Market)


FX Mostly Consolidates after Big Moves Yesterday

Marc To Market's picture




After out sized moves in the foreign exchange market yesterday, a consolidative tone has emerged with a few exceptions.  The big winner yesterday was the euro and with a narrow range of about a third of a cent today, the market seems as if it is catching its breath before assaulting important resistance near $1.33, which capped it in mid-December and at the very start of the new year. 
Sterling recovered from a test on $1.60 at mid-week, but lagged behind the euro.  The pullback today is also more pronounced after the disappointing industrial output figures.  Industrial production rose 0.3%, half the recovery the consensus expected after the 0.9% decline in October.  The key disappointment was in manufacturing, which contracted 0.3% compared with consensus expectations for a 0.5% gain, following the 1.4% slide in October.  The increases concerns that the UK economy slipped back into contraction following expansion in Q3.  Support is now seen near $1.6080.
The dollar moved to new 2.5 year highs against the yen near JPY89.35, encouraged by a larger than expected current account deficit.  The JPY222.4 bln deficit was more than 10-fold greater than the consensus forecast and is the first current account deficit since Jan 2012.  The deficit was a function of a larger trade deficit and a smaller investment income surplus.  Separately, the Japan's government approved a JPY10.3 trillion stimulus of a JPY13.2 trillion extra budget.  For the first time in years the supplemental budget will be financed by new debt issuance (5-year bonds).
The Swiss franc is under some pressure as well.  Against the euro it is trading near the lower end of its 4-month range.  Yesterday's losses were extended following the soft CPI figures.  December CPI fell 0.2% after a 0.3% decline in November.  The consensus called for an unchanged reading.   News yesterday that another domestic bank is considering charging for franc deposits was seen as a catalyst to get the ball rolling.   Few currencies were able to keep pace with the euro yesterday and the franc was not one of them.,
We note that Cyprus' credit rating was slashed three notches by Moody's to Caa3 and retained a negative outlook.  . Moody's sees a greater likelihood that Cyprus may default of press for a "distressed exchange".  It warned that Cyprus' debt to GDP may rise to 150% this year.  On the other hand, EU Commission Rehn argued against a restructuring of Cyprus' debt, which the IMF seems to be encouraging.
Lastly, China's CPI came in on the high side of expectations at 2.5% up from 2.0% in November and more than the 2.3% expected.  A significant culprit was food prices and in particular vegetables and pork.   Although this was primarily weather-related (coldest winter in China in almost three decades), it dashed lingering hopes of a near-term cut in reserve requirements. This is turn saw China shares posted their biggest decline in two months.  Indeed, the risk is that inflation pushes higher this month as well.  Food prices rose 4.2% year-over-year in December.


end



OH OH! Be careful on the Euro as Goldman's Stolper goes long Euro/usa with a target of 1.37.
This gentleman is batting .000 

(courtesy zero hedge)


Stolper Time: Goldman Says To Go Long EURUSD With 1.37 Target, 1.29 Stop

Tyler Durden's picture




With the EURUSD trading rangebound in the past few months, everyone needed a catalyst for a forward direction. Today, we got it courtesy of Goldman's Tom Stolper, who just released yet another EURUSD trade recommendation with a 1.37 Target.
From Goldman:
As we discussed in Monday’s Global Markets Daily, we continue to expect the compression in Euro area risk premia to push EUR/$ higher. Having just closed our long EUR/CAD recommendation, and in order to maintain exposure to the theme, we recommend long EUR/$ positions with a target of 1.37 and a stop at 1.29.
So let's get this straight: Goldman's 0.000 batter has a trade recommendation that has upside of 400 pips, and downside of... 400 pips? As always: do the opposite of what Tom Stolper, who is almost as "accurate" as Whitney Tilson in his recommendations, says which also happens to be the same direction as what Goldman's prop desk does.
In the meantime, mind the kneejerk short covering reaction, as Goldman pumps every correlated leveraged fulcrum point to send stocks even higher (remember: EURUSD correlates to the ES virtually 1 to 1). Because one can be certainly that Germany will be simply delighted to see its already impaired exports suffer even more as the EUR ramps, making German exports even more expensive, in the process deepening Germany's recession.
One wonders: how long until the ECB realizes it should be doing all it can to lower the EUR (like every other central bank), not raise it. Oh wait: redenomination risk. Nevermind.
end


Spanish industrial output is now back to 1993 levels:

(courtesy zero hedge)

Spanish Tax Hike Sends Industrial Output Back To 1993 Levels

Tyler Durden's picture




In Europe there is hope, as demonstrated by every hope and optimism index over the past two months going vertical. In Europe there is faith, as demonstrated by yesterday's Draghi conference, in which the likelihood of further rate cuts was officially taken off the table (as expected: any further cuts would send rates negative, wreaking even more havoc with money markets). And in Europe, there is reality, as demonstrated by the following chart showing the index of Spanish Industrial Output, which disappointed broadly in November, down 2.3% sequentially and 7.2% Y/Y, sending it to levels not seen since 1993.
From SocGen:
In Spain, the seasonally adjusted numbers show industrial production falling by 2.3% mom in November and 7.2% yoy. While the consensus expected a rebound after the sharp drop recorded in September (-2.8% mom) and flat activity in October, this is another sign that the three point VAT increase in September as well as the ongoing budget tightening continue to weigh on domestic demand. The fall takes the level of production back to level not seen since 1993, wiping out the best part of two decades gains in production. On the details, all industrial sectors reported a fall in output. The main sector particularly hit was capital goods (-4.1% on a 3m/3m basis, -12.8% yoy) while consumer goods and intermediate goods output fell by 2.3% on 3m/3m basis.

Assuming an unchanged reading in December from November, industrial output would drop by 2.6% qoq. Although this negative contribution on GDP growth will be partially offset by a positive contribution from net trade, the Spanish economy is set to post a weak GDP print in Q4. Our Q4 GDP forecast remains at -0.5% qoq but risks are clearly tilted to the downside. In a nutshell, the recession remains severe in Spain and unemployment rate is set to carry on rising from already depressed level (26.2% in October).
Tax increase leading to widespread economic contraction and demand collapse? Someone should tell US economists all about this curious phenomenon.

end


Your early Tuesday morning currency crosses; 

This morning we continue to see the euro strength  against the dollar. The yen however continues to weaken against the dollar.  The pound shows slight strength against the USA dollar with the Canadian dollar also gaining slightly against the dollar.  We have a slight risk is on situation with most European bourses slightly in the green.  The bankers however whacked gold and silver starting at the usual time period at 3 am est.  




Euro/USA    1.3304 up  .0032
USA/yen  89.01  down .26
GBP/USA     1.6143 down .0029
USA/Can      .9833  down .0002

end



your closing 10 year bond yield from Spain:  





SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE  (BACK DOWN IN YIELD )




SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE

GSPG10YR:IND

4.888000.01600 0.33%
As of 01/11/2013.











end.













Your closing Italian 10 year bond yield: 
a huge drop in yield.




Italy Govt Bonds 10 Year Gross Yield

GBTPGR10:IND

4.131000.02700 0.65%
As of 01/11/2013.




















end.









Your 5:00 pm Tuesday currency crosses: 



The Euro picked up some huge strength today rising to the 1.3342 .  The Yen continues to lose steam as the government is detailing its spending platform.  The Pound faltered a bit on Friday with  the Canadian dollar remaining basically at par.



Euro/USA    1.3342 up   .0070
USA/Yen  89.17 down .101
GBP/USA     1.6127 down .0037
USA/Can      .98399  up .0009





end.






Your closing figures from Europe and the USA:
England, Germany and the USA in the green.  France basically flat
and Spain modestly in the green:








i) England/FTSE up  20.07  or 0 .33%

ii) Paris/CAC  up 2.9 or  0.08% 

iii) German DAX: up 7.06 or .09% 

iv) Spanish ibex: up 45.80  or 0.53%

and the Dow: up 17.21  points or .13% 



end. 





And now for major USA stories:


 The big story on Friday was the release of the trade deficit which soared to $48.7 billion dollars.
The trade deficit is always a negative to GDP, thus expect revisions to below 1% for GDP for the 4th quarter.






US November Trade Deficit Soars To $48.7 Billion, Sub 1% Q4 GDP Revisions Imminent

Tyler Durden's picture




So much for the US trade renaissance. After posting a better than expected October trade deficit of ($42.1) billion, November saw the net importer that is the US revert to its old ways, with a massive deficit of some $48.7 billion - the worst number since April, far more than the $41.3 billion in expectations, which makes it the biggest miss to expectations since June 2010, driven by a $1.8 billion increase in exports to $182.6 billion, and a surge in imports which rose from $222.9 billion to $231.3 billion. Specifically "The October to November increase in imports of goods reflected increases in consumer goods ($4.6 billion);automotive vehicles, parts, and engines ($1.5 billion);industrial supplies and materials ($1.3 billion); foods, feeds, and beverages ($0.6 billion); capital goods ($0.4 billion); and other goods ($0.1 billion)." And with this stark reminder that the US has to import the bulk of its products, something which a weak USD does nothing to help, expect a bevy of lower Q4 GDP revisions, as this number may push Q4 GDP in the sub-1% category.
From the release:
Goods by Geographic Area (Not Seasonally Adjusted)
  • The goods deficit with China decreased from $29.5 billion in October to $29.0 billion in November. Exports decreased $0.2 billion (primarily nonferrous metals and oilseeds and food oils) to $10.6 billion, while imports decreased $0.7 billion (primarily apparel and footwear) to $39.5 billion.
  • The goods deficit with Canada increased from $1.7 billion in October to $3.0 billion in November. Exports decreased $1.2 billion (primarily generators, passenger cars, and electric apparatus) to $24.7 billion, while imports increased $0.1 billion (primarily fuel oil) to $27.7 billion.
  • The goods deficit with Mexico increased from $4.4 billion in October to $4.9 billion in November. Exports decreased $1.6 billion (primarily petroleum products, computer accessories, and soybeans) to $18.8 billion, while imports decreased $1.1 billion (primarily crude oil, automotive parts and accessories, and computers) to $23.7 billion.


US Q4 GDP: From 2.5% To Sub 1% in Under Six Months



Tyler Durden's picture






The previously noted surge in the US trade deficit may or may not be due to the iPhone (which either leads to a rise or fall in GDP, depending on which "strategist" is goalseeking their excel model to reality), but the result is clear: Q4 GDP just got slammed. Below is a summary of the Wall Street penguins all of whom had no choice but to revise their Q4 GDPs far lower.
  • Goldman Sachs: 1.8% to 1.3%
  • JPM: 1.5% to 0.8%
  • RBS: 1.5% to 0.7%
  • Nomura: 2% to 1.3%
  • Last, and least, Deutsche Bank's Joe Lavorgna: unchanged at 1.3%
Look forward to hope being forced to surge even more to offset for this cut by nearly 50% of the consensus Q4 GDP estimate of 1.5% prior to today. And while we wait for Bloomberg to compile today's massive downward revision to economic growth, this is how Q4 GDP tracking estimates looked like in the past 6 months before today's downward revision which will take the consensus line to 1% or under.


Up To 3.5% Of US 2013 GDP Could Evaporate Due To Enacted Tax Hikes

Tyler Durden's picture




When it comes to the impact of the just enacted 2013 tax hikes (payroll tax cut expiration affecting everyone together with the tax hike on those making over $400K), economists are in broad agreement on one thing: the first half of 2013 will be impacted by roughly a 1.0%-1.5% drop in GDP. However, a big question emerges when attempting to quantify the adverse impact on US growth as the year progresses past June 30. Most strategists and economists ignore this issue, and instead chose to believe that all shall be well as by July, the US population will be habituated to getting a smaller paycheck and general consuming behavior will no longer be impacted relative to a previous baseline.  
Sadly, as we all know, there are three certain things in life: death, taxes, and the majority of economists being dead wrong, which is why it is prudent to consider an alternative, one which assumes that Americans don't "habituate" to being poorer, and do not revert to a baseline spending model, regardless how much economists "will" a given outcome (especially since no estimates take into account spending cuts, which may happen, and which will serve as a double whammy to consumption in addition to already enacted tax hikes).
Which is why we were surprised to learn that according to at least one model created by Goldman, the total consumption hit for all of 2013 (not just H1), may well be higher than what most people assume. In fact, as Goldman shows, based on a model conceived by Christina and David Romer, it is possible that US GDP growth in the second half is slashed by an additional 2-2.5%, something which very likely will tip the country into recession as the combined impact over the entire year could be as high as 3.5%, eliminating even the most optimistic forecasts for organic growth in the US for the new year.
But it gets worse. As Goldman observes, "based on our reading of the debate in Washington, we have become more concerned about our assumption that the automatic spending cuts (or "sequester") will be delayed into 2014. If the sequester takes effect as scheduled from March 1, this would present an additional downside risk to our growth forecast in the later part of the year."
So the worst case scenario for GDP growth from tax hikes alone is already 3.5%, and one may have to add to that another several percent in GDP reduction from an spending cuts, which might well lead to a 4-5% GDP drop in 2013 in the worst case, a case determined solely by the dysfunction in Washington.
Should this happen, the implications for monetary policy and even further easing at that point (on top of the already enacted, indefinite $85 billion per month), not to mention risk and hard assets, are self-explanatory.
From Goldman:
The Consumption Hit From Higher Taxes 
•    We expect the $200bn increase in federal taxes on individuals to be a major headwind for the economy this year, shaving around 1 percentage point off the annualized growth rate of personal consumption in 2013H1.
•    We compare this forecast to the implications from three empirical models including (1) a setup that traces out shocks to disposable income on consumption; (2) the Fed's macro-econometric model "FRB/US"; and (3) the approach pioneered by economists Christina and David Romer, who compile a history of legislated tax changes. The results suggest that our expectation for a 1 percentage point fiscal drag on annualized consumption growth in 2013H1 is broadly consistent with these models.
•    But there are risks to our expectation that the fiscal drag will diminish meaningfully in 2013H2. First, the Romer and Romer approach suggests that the tax hit to growth might continue to build in the second half of the year. Second, we have become more concerned about our assumption that the automatic spending cuts (or "sequester") will be delayed into 2014. This presents an additional downside risk to our forecast that growth will pick up to a trend rate in 2013H2.
Federal taxes on individuals in 2013 are likely to rise by around $200bn, worth 1.3% of GDP or 1.6% of disposable personal income. This estimate adds the expiration of the payroll tax cut ($126bn) as well as the increase in upper-income taxes via expiration of the Bush tax cuts ($50bn) and healthcare-related taxes ($24bn). We expect the resulting reduction in disposable income to be a major headwind for the economy this year, shaving around 1 percentage point (pt) off annualized personal consumption expenditure (PCE) growth in 2013H1. As a result, we forecast a slowdown of consumption growth from a bit more than 2% in late 2014--currently tracking at 2.2% in 2012Q4--to 1.0% in 2013Q1 and 1.5% in 2013Q2.
In today's comment we compare this forecast to the predictions from three models designed to estimate the effects of tax increases on consumption.
First, we consider an empirical model that traces out the effects of changes to disposable income on consumption. We construct a quarterly vector auto-regression (VAR) model that explains the (annualized) growth rate of real PCE with the quarter-on-quarter percentage change in real disposable income. We then trace out the response of real PCE growth to a 1.6% reduction in real disposable income in early 2013. The black bars in Exhibit 1 summarize our results. The model points to a sizable hit of 1.5pt to (annualized) real PCE growth in the first half of the year. The drag then diminishes to about 0.5pt in 2013H2.
Second, we turn to the Fed's large-scale econometric model of the US economy, FRB/US. The motivation is that FRB/US is far more comprehensive than our simple setup above, For example, it allows consumption to depend not only on current disposable income but also expectations about its future path. Within FRB/US we model the 2013 tax increase as a permanent 1.6% hit to expected lifetime disposable income. In effect, we assume that households expect the tax increase to remain in place for the foreseeable future. We then trace out the effect on consumption in the model. The results are broadly similar to the simple model above, pointing to a 1pt hit to annualized consumption growth in 2013H1 and 0.5pt in 2013H2.
Finally, we use the "narrative" data set constructed by Christina and David Romer of the University of California, Berkeley. It is based on detailed historical records from Congress and the US Treasury on legislated tax changes, with a special focus on "exogenous" changes that are not motivated by a desire to respond to changes in economic activity. (The intuition for their approach is that excluding tax changes that were conducted in response to the state of the cycle makes it easier to disentangle cause and effect of tax changes.) As in our simple approach above, we estimate a quarterly VAR that includes real PCE growth and the Romers' measure of tax changes. We then trace out the effect of a 1.3% of GDP increase in taxes in early 2013 on real PCE growth. Although the results are similar for 2013H1--with a hit of around 1pt--the hit to consumption is much larger in the second half of 2013 than with the approaches above (Exhibit 1). Instead of fading away in 2013H1, the drag on consumption growth continues to build in the second half of the year. This conclusion is qualitatively similar--although less pronounced--when we allow for monetary policy to lean against the consumption hit.
We conclude that our forecast of a 1-percentage-point fiscal drag on consumption growth in 2013H1 is broadly consistent with our survey of alternative empirical models. This would probably imply a small decline in real personal consumption in January followed by slow but positive growth in subsequent months. The timetable of indicators discussed in yesterday's comment should help us assess whether our forecast is correct.
But there are risks to our expectation that the fiscal drag will diminish in 2013H2. First, as the Romer and Romer approach shows, it is possible that the effects from the tax hikes on growth will continue to build in the second half of the year. If so, our forecast for a return of real GDP growth to a trend rate of 2.5% in the second half would be at risk.
Second, based on our reading of the debate in Washington, we have become more concerned about our assumption that the automatic spending cuts (or "sequester") will be delayed into 2014. If the sequester takes effect as scheduled from March 1, this would present an additional downside risk to our growth forecast in the later part of the year.


end

And now we have two new hawks at the Fed that worry about the threat of inflation.

(courtesy Reuters)


Fed hawks worry about threat of inflation


MADISON, Wis./KANSAS CITY, Missouri | Thu Jan 10, 2013 11:22pm EST

(Reuters) - Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank's easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year.  

In remarks that stamped her as a hawk on the Fed's policy-setting committee, Kansas City Federal Reserve President Esther George warned that the Fed's near-zero interest-rate policy - aimed at boosting theeconomy - could spark inflation.

"A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the 2 percent inflation goal in the future," she said in her most extensive remarks in a year on policy.

"Monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it," she said in a speech in Kansas City.

That stance is hardly representative of other influential officials at the central bank, including Bernanke and the vice chair, Janet Yellen.

Their view was more closely captured by comments from Narayana Kocherlakota, who noted inflation was forecast to remain below the central bank's 2 percent target for the foreseeable future, even by the Fed's own estimates.

"This forecast suggests that, if anything, monetary policy is currently too tight, not too easy," he said in remarks in Minneapolis.

Last month, the Fed voted to keep up asset purchases at an $85 billion monthly pace to lower borrowing costs and spur hiring. It said it would continue that policy, called quantitative easing, until it saw substantial improvement in the labor market outlook.

U.S. central bankers also pledged to hold interest rates near zero until unemployment falls to 6.5 percent, provided inflation does not threaten to rise above 2.5 percent.

George will cast her first vote this month on monetary policy since taking the helm at the Kansas City Fed in October 2011, while Kocherlakota is not a voter this year.

"The latest remarks from Kansas City Fed's Esther George have cemented the presence of a hawkish dissenter on the FOMC in 2013, with Richmond Fed's (Jeffrey) Lacker passing along the hawkish torch," said Gennadiy Goldberg, U.S. strategist at TD Securities.

Lacker was the lone dissenter on the Fed's policy-setting panel last year.

'VERY AGGRESSIVE POLICY'

St. Louis Fed President James Bullard, who votes as well this year on U.S. monetary policy, also warned about the potential for inflation, although he noted that inflation was so far running under the Fed's 2 percent goal.

"It is a very aggressive policy and it is making me a little bit nervous that we are overcommitting to the easy policy," he told reporters after a speech to the Wisconsin Bankers Association in Madison. "We are taking risk."

As Fed officials mull when to reduce or end the asset buying - some, including Bullard, say that could happen this year - the debate may focus on potential inflation as well as the outlook for theeconomy.

On the latter front, George was decidedly more downbeat than Bullard, saying she expected the U.S. economy to grow just above 2 percent in 2013, while unemployment falls about another half percentage point.

Bullard sees growth at 3.2 percent this year and next, he said Thursday, and sees the jobless rate dropping to 6.5 percent - the Fed's threshold for rethinking its low-rate policy - by the middle of next year. The U.S. jobless rate in December was 7.8 percent.

Kocherlakota predicts U.S. gross domestic product will expand at an annual pace of 2.5 percent in 2013 and 3 percent next year, estimates that put him on the weak end of Fed policymakers' forecasts.

"This growth will do little in terms of returning the economy to the historical trend," Kocherlakota said in prepared remarks to a Minneapolis Fed event. "Consistent with this slow output growth, I expect unemployment to continue to fall only slowly."

Minutes from the Fed's December meeting suggested George, while definitely on the hawkish end of the central bank's policy views, was not alone.

They said several voting FOMC members were concerned about possible risks to financial stability from the Fed's prolonged stimulus policies.

(Additional reporting by David Bailey and Pedro da Costa; Editing by Peter Cooney)

end. 


Well that about does it for the week.

I wish you a grand weekend

Harvey


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