Valuable Insights from Around the Web – Mon 9 Oct, 2017

Six Things to Know about How Markets Started the Week

First off we want to wish all of our Canadian listeners a very Happy Thanksgiving! To everyone in the US a very happy Columbus Day as well!

This post is courtesy of Marc Chandler and his website With a number of markets closed it is a slower day but he points out some interesting data, political news and currency moves to start the week.

Click here to visit Marc’s site for more great articles.

Several financial centers were closed today, October 9, for different national holidays.  Markets were closed in Japan, Taiwan, Korea, and Canada, and there was a partial holiday in the US.
1.  Chinese markets reopened after the national holiday last week.  The equities rallied in a bit of catch-up, following the cut in reserve requirements for lending to small businesses announced at the start of the holiday period.  The yuan fell 0.4% against the dollar, which had appreciated against most major and emerging market currencies while Chinese markets were closed.
China reported that its reserves rose by $17 bln in September.  This extends the streak to eight months and brings the year-to-date increase to $98 bln.  Note that the TIC data that extends through July shows China’s holding of Treasuries increased by $108 bln this year.  This does not include the use of financial centers, like Belgium, which in the past some analysts have argued reflected Chinese activity, which for the record is off $21 bln through the first seven months of the year
2.  After suffering its biggest loss in a year last week, sterling bounced back on Monday.  It overshot the upper end of the resistance band we identified at $1.3160 and made it up to nearly $1.3185 late in the European morning before sellers emerged.  We note that the Commitment of Traders showed that the net speculative position in the futures market was as long sterling as it has been in three years.  Disaggregating the data showed that the more than 15k contract surge was largely a function of short-covering (profit-taking?) than new longs being established.
Sterling’s recovery from its test on $1.30 before the weekend was helped by a report suggesting the UK Prime Minister May is considering a cabinet reshuffle following the EU Summit on October 19-20.  There was speculation that Johnson could leave, but this speculation, like Tillerson in the US, is chronic grist for the rumor mills.   It is difficult to know the veracity, but beside a short-term impact, the UK’s challenges are so much larger than this or that cabinet official.
Despite the 30 Tory MPs that are said to seek a leadership challenge, there seems to be a general recognition that ousting May could have disastrous consequences. In the first instance, it would deal a setback to Brexit negotiations. In the second, it would open the door to a Labour government, which according to recent surveys, enjoys greater popular support than the Conservatives.
While political concerns help explain recent sterling movement, we think that the underlying direction is driven by economic considerations.  Here the news that may have been obscured by the political drama is that ONS revised up Q2 UK labor costs to 2.4% from 1.6%.  This may be an important consideration for monetary policy.  Specifically, it makes a rate hike more likely.
On the other hand, there may be more than meets the eye in tomorrow’s report by the UK Office for Budget Responsibility.  It is expected to show new research that shows how it over-estimated productivity growth for the past seven years.  While this sounds like old news, and it is, the implication is new.
It means that the GBP26 bln fiscal cushion that Chancellor of the Exchequer Hammond secured last year is not so secure.  Slower growth means it will be considerably less exactly at the moment when there is greater domestic pressure to lift the austerity pay cap on public sector workers, lower the debt burden for students, and build more homes.
The UK government seemed to appreciate the early signals from the Trump Administration of 1) support for Brexit and 2) encourage expectations for a friendly trade policy and a free-trade agreement.  This was always going to clash with the American First thrust of the new US administration.   The Trump Administration has made a couple of preliminary rulings against a Canadian airplane manufacturer who employs 4000 in Northern Ireland.  Reports suggest May, who depends on the Unionists from Northern Ireland in Parliament, appealed directly to the US President.  The US has also joined several other countries who do not want the EU and UK to decide how the allowable subsidies will be divided when the UK leaves the EU.
3.  The dollar tended to strengthen against the liquid and accessible emerging market currencies on Monday.  The Turkish lira led the pack with a net loss of a little more than 3%.  The sell-off was likely exaggerated by the lack of liquidity in early Asia, which got the first chance to respond to the suspension of visas between Turkey and the US.  The proximate cause was the arrest of an employee at the US Embassy for involvement in the coup, which ostensibly has snared thousands of people.  After closing near TRY3.6150 before the weekend, Bloomberg shows the dollar pushed through TRY3.85 in early Asia.  As European activity drew to a close the dollar was trading on the first side of the range it saw in Europe near TRY3.73.    The diplomatic crisis continued to appear to be escalating.
4.  The final count in the recent New Zealand election gave Labour and Greens an extra seat apiece.  This shifts the tide a little.  A coalition of Labour, Greens, and New Zealand First would have a three-seat majority.  A coalition between the National Party and New Zealand First would have a single seat majority.  New Zealand First has given an Oct 12 deadline to form a coalition.  These political issues, in the face of the growing expectations of a Dec Fed rate hike, have weighed on the New Zealand dollar.  With today’s losses (0.35% @~$0.7075), the Kiwi has fallen for a third session to trade at its lowest level since early June. It has retraced more than 61.8% of this year’s rally after peaking near $0.7560 in late July.   A note of caution comes from the fact that the New Zealand dollar is straddling the lower Bollinger Band (~$0.7075).
5.  The euro fell to $1.1670 before recovering smartly ahead of the weekend.  There was a little follow-through buying on Monday.  The euro entered an important technical band of resistance that extends to $1.1770.  It also houses the top of the downtrend channel we identified ($1.1760 at the start of the week).
Catalonia’s standoff with Madrid continues.  It is if the collective breath is being taken.  Will Catalonian leaders declare independence?  If they do not,  have the popular passions and expectations been so aroused as to render the situation controllable?   The brinkmanship tactics require going to the brink, and the brink is at hand.  Investors seem to expect Catalonia to blink. Spanish bonds and stocks performed well on Monday, and the sovereign credit default swap slipped.
Germany’s  Finance Minister Schaeuble attended his last Eurogroup meeting of finance ministers.  He is expected to become the Bundestag President next week. If he is the first casualty of the recent German election, Merkel’s weekend compromise with her Bavarian counterparts in the CSU is the second.  She agreed to cap migration, including asylum seekers to a net 200k annually.
Meanwhile, it took 208 days, but a new coalition government appears to have been agreed.  Rutte remains Prime Minister, and the coalition includes the D66 (progressive), the CDA (moderate Christian party), and the Christian Union (a more conservative party, that previously wanted to exit EMU). Despite the range of political views represented, an agreement reportedly has been reached on tax, sick pay, welfare for refugees, and defense and education spending. There does not appear to be much market impact.  Over the past six months, the Dutch premium over Germany has halved to 10 bp.   Dutch stocks have marginally underperformed Germany 4.3% vs. 6.15% over the past six months but did nearly twice as well the Dow Jones Stoxx 600 over this period.
6.  The dollar peaked against the yen near JPY113.45 after the US jobs data and then sold off.  It continued to fall to a little through JPY112.25 on Monday before rebounding to trade near JPY112.75 in thin dealings after European markets closed on Monday.  With the US Treasury market closed, a powerful driver of the yen was not available, and the US equities were subdued.  The head of the Party of Hope and Governor of Tokyo Koike is due to formally submit the party’s candidates for this month’s election.  Her own name will most likely not be listed.  This means that she will not directly challenge Abe.  As this has become clearer, it appears her party has lost some momentum.

  1. On October 9, 2017 at 10:42 am,
    Silverdollar says:

    So, is this the week when Chinese gold trading is legal again? Maybe that’s why gold got a bid this morning.

  2. On October 9, 2017 at 11:10 am,
    Jason says:

    My NUGT is in the green. So is my blood stock MGM.

  3. On October 9, 2017 at 11:54 am,
    JohnK says:

    Just in case you missed them last. Guess what there back.
    Oct 10 Fed Kaplan speech
    Oct 10 Fed Kashkari speech
    Oct 11 Fed Evans speech
    Oct 12 Fed Powell speech
    Oct 12 Fed Brainard speech (no Brainer)
    Oct 12 Fed Bostic speech
    Oct 13 Fed Rosengren speech
    Oct 13 Fed Evans speech
    Oct 13 Fed Kaplan speech
    Oct 13 Fed Powell speech
    Oct 15 SUNDAY, Head mouthpiece Janet Yellen.
    “And the people bowed and prayed to the neon God they made.”

  4. On October 9, 2017 at 1:06 pm,
    bonzo barzini says:

    Tonight Mike Adams will present conclusive acoustic forensic analysis proving there was at least one other shooter in Las Vegas who was closer than the Mandalay. The FBI is either stupid or covering this up.

    • On October 9, 2017 at 1:23 pm,
      JohnK says:

      Israeli Art Students Inside WTC>>>>>The B Thing.

      • On October 9, 2017 at 1:53 pm,
        OOTB Jerry says:

        Thanks…………I was looking for this the other day, to explain to someone on this site, about the art students…..

        • On October 9, 2017 at 1:56 pm,
          OOTB Jerry says:

          Interesting about Kellogg…….and the BOMB……

        • On October 9, 2017 at 2:02 pm,
          OOTB Jerry says:

          Does anyone believe the govt anymore……concerning anything……..

          • On October 9, 2017 at 2:20 pm,
            Wayne says:

            “Hi, I’m from the government. I love you. I want to take your guns. If you don’t peacefully give them up, I will have to use my (the government’s) guns to force you. I don’t want to do this, but I care about you.” – Adolf

      • On October 9, 2017 at 2:16 pm,
        b says:

        notice the date? Im sure ya do, 2015, but also notice the # of views. in 2 years.
        just over 100k, which is why its still available, very few bother to look, and of those that did look, how many thought it was bs?

        No offence to anyone, but the people on this site have seen repeated evidence as to whats happening for years now.
        the question shouldnt be is there proof? do ya understand? etc

        It should be, how do ya get the “mob” interested?
        Is it even possible?

        I think people believe whatever they see on TV or in Hollywood movies, and that without question.
        Maybe the way is to run tv ads? course the media might not show them I guess.

        Well, Im outta ideas.

        • On October 9, 2017 at 2:30 pm,
          JohnK says:

          I know it’s 2015,but the person interviewed has a new book out called “Methodical Illusion”
          Rebekah Roth
          She hasn’t given up.
          Architects and Engineers haven’t given up,In fact they have funded a study of the Nist report that has disputed the official narrative with facts. Soon they will be releasing a presentation detailing how BLdg 7 actually came down.
          American Patriots haven’t given up.We took an oath.

          • On October 9, 2017 at 3:31 pm,
            b says:

            Ive followed off and on JohnK.
            Fantastic in the A&E actually got believed.

        • On October 9, 2017 at 2:59 pm,
          OOTB Jerry says:

          Wonder what Jesus feels like, after 2000 yrs. …….. the message has been proven, was proven at the time Paul stood on Mars Hill,….In Athens, …….some people will never believe, ……….just the way it is…….

    • On October 9, 2017 at 2:02 pm,
      b says:

      Sad people refuse to accept their own gov does false flag crap.

      Too bad, the US may very well be about to give us a big enough false flag about NKorea or Iran, maybe both.

      Millions could die and the american people will jump in with hooray us, we the best, patriotic brainwash.

      People are so gullible.

      I bet even if an american city got nuked, they would remain blind and just want more and bigger war.

      • On October 9, 2017 at 2:04 pm,
        OOTB Jerry says:

        I would agree , with the majority you have written……..

        • On October 9, 2017 at 2:18 pm,
          b says:

          just for fun jerry, what do you not agree with?

          • On October 9, 2017 at 3:01 pm,
            OOTB Jerry says:

            I always give myself a little flex room around here……..just in case Bob shows up…. 🙂

          • On October 9, 2017 at 3:32 pm,
            b says:

            lol, good answer.
            no fun bein in Bobs sights.

      • On October 9, 2017 at 2:40 pm,
        JohnK says:

        Regardless as to how bad you portray America. Even with all the pitfalls,it’s still a great place to live.
        Were going to root out the Communists.
        Were going to root out the Nazi’s.
        American Patriots in defense of Liberty.

        • On October 9, 2017 at 3:52 pm,
          b says:

          You dont need to convince me John, I used to go to Vegas regular. Nice drive from BC.

          I have a brother lives in LA, or used to, havnt spoken in about 100 years now.
          He served with the Yanks,I,my father and grandfather served with canada, from 1914 to the end of the 70s.
          Always figured my brother was kinda treasonous. (smiley face here)

          But I loved the states, people were great, even met Mickey Mouse, but stopped going when I realized the gov is fascist, stopped flying even in Canada because of the TSA.
          Its dumb principle.(teach kids not to let stranger touch them unless they are in uniform)
          And it changes nothing.

          I do hope you find enough patriots.

  5. On October 9, 2017 at 1:26 pm,
    Matthew says:

    Just before the recent bullish action and the 11%+ pop in the XAU…

  6. On October 9, 2017 at 1:33 pm,
    JohnK says:
  7. On October 9, 2017 at 1:37 pm,
    GH says:

    Relative to its 200 day exponential moving average, GDXJ looks like it’s ready to switch into bull mode.

    • On October 9, 2017 at 1:43 pm,
      GH says:

      After six long years, I should add.

    • On October 9, 2017 at 2:05 pm,
      Matthew says:

      With respect to the following speed line, Fibonacci arc and 233 week MA, the recent third attempts, respectively, will prove to have been the charm (“three and through”)…

      • On October 9, 2017 at 3:07 pm,
        GH says:

        Open Sesame!!!

        • On October 9, 2017 at 3:52 pm,
          Matthew says:

          And says me!!!

      • On October 9, 2017 at 8:20 pm,
        Dan, calgary says:

        Its looking good so far. Thanks for the charts (;-)

  8. On October 9, 2017 at 1:41 pm,
    JohnK says:

    Mr. Moriarty:
    I recently tried to access 321 Gold articles from 2004. I found them doing a google search.When I was taken to the page at 321 Gold they were gone. Do you have a time limit on your archives?

    • On October 10, 2017 at 7:07 am,
      Robert Moriarty says:

      It depends on the article. If you want to read an external link, we may well show the original link but if the website has moved or disappeared, we have no way of knowing. The 321gold internal articles should be there. Tell me which you seek and I will tell you or find it.

  9. On October 9, 2017 at 1:53 pm,
    JohnK says:

    Zinc and Lead are at new highs for the year.
    I have 20 stocks which I call the “Nevada” These would be Nevada Lithium Brine stocks.As a group they have been positive for the last 8 weeks.
    I have 6 stocks grouped as the Ontario Spodumene Lithium (hard rock).As a group these have been up the last 5 weeks consecutively.
    The major Lithium producers have provided stellar returns.
    I believe this is a trend that will continue.

  10. On October 9, 2017 at 1:58 pm,
    JohnK says:

    In the Cobalt space WHY.V .+400% in one week. I had it on the radar but missed it.

  11. On October 9, 2017 at 2:08 pm,
    JohnK says:

    Nevada – hide Mkt Cap
    ALB 136.55 -0.64 (-0.47%) 15.09B
    PE 0.470 -0.025 (-5.05%) 56.84M
    LIX 2.04 +0.04 (2.00%) 174.00M
    BFF 0.0200 0.0000 (0.00%) 1.87M
    CYP 0.125 -0.005 (-3.85%) 4.50M
    NEV 0.200 0.000 (0.00%) 7.89M
    NAM 0.0600 -0.0050 (-7.69%) 4.11M
    PAC 0.0900 0.0000 (0.00%) 4.91M
    ABR 0.0800 0.0000 (0.00%) 2.47M
    SIE 0.130 +0.005 (4.00%) 4.69M
    ZAD 0.0850 0.0000 (0.00%) 7.63M
    RSV 0.0250 0.0000 (0.00%) 883,100.00
    LI 0.530 -0.070 (-11.67%) 3.11M
    AIX 0.0350 -0.0050 (-12.50%) 2.54M
    LTUM 0.0850 +0.0001 (0.06%) 7.22M
    DJI 0.120 -0.005 (-4.00%) 16.59M
    ULI 0.185 0.000 (0.00%) 11.97M
    ZC 0.250 0.000 (0.00%) 3.85M
    EUK 0.0350 +0.0050 (16.67%) 1.22M
    ICM 0.0400 0.0000 (0.00%) 2.83M

  12. On October 9, 2017 at 2:09 pm,
    OOTB Jerry says:
  13. On October 9, 2017 at 2:10 pm,
    JohnK says:

    FL 0.440 0.000 (0.00%) 59.53M
    RCK 1.40 -0.02 (-1.41%) 38.05M
    ION 0.0800 0.0000 (0.00%) 4.31M
    EVR 0.0450 0.0000 (0.00%) 4.19M
    GLD 0.195 0.000 (0.00%) 1.75M
    AVL 0.150 +0.010 (7.14%) 28.40M

  14. On October 9, 2017 at 2:16 pm,
    JohnK says:

    RCK.V was a lesson why you should invest in “The Best of Breed”
    Just for the Spankmeister. How’s that for a black candle?

  15. On October 9, 2017 at 2:23 pm,
    JohnK says:

    Lithium monthly gain +13.07%. Yearly gain +65.22%.
    Cobalt monthly gain -4.12% Yearly gain +113.76%
    Zinc monthly gain +3.50% Yearly gain +40.65%
    Source: Trading Commodities.

  16. On October 9, 2017 at 2:49 pm,
    JohnK says:

    Things could get interesting for Northern Dynasty.

  17. On October 9, 2017 at 2:55 pm,
    JohnK says:

    Just like a bad headache,these people just won’t go away.

    • On October 9, 2017 at 3:04 pm,
      OOTB Jerry says:

      they have to keep running , they are addicted ……….

      • On October 9, 2017 at 3:34 pm,
        JohnK says:

        Who would pay millions for a job that pays thousands?
        Crooks thats who.
        Ban guns in the U S while backing legislation to sell Saudi Arabia 1.5 Billion in weapons that’s who.
        Remember the Families of the victims of 9/11 bringing a class action suit against the Saudi’s under the JASTA Bill? Evidently Dianne doesn’t.

        • On October 9, 2017 at 3:53 pm,
          OOTB Jerry says:

          Ditto……..hard to believe the sheeple have not caught on to the scam……

          • On October 9, 2017 at 4:35 pm,
            JohnK says:

            So instead of term limits we require any Politician running for office over the age of 65 to register as a Dinosaur running as a Dinosaur in the newly established Dinosaur Party.

  18. On October 9, 2017 at 2:55 pm,
    russell s hamilton says:

    Should i invest in DASH , RIPPLE, BITCOIN, ETHERIUM ?? Not a logical investment , but all the under 30s are into Crypto currencys . i will try 1k investment. love ot you all S

    • On October 9, 2017 at 3:18 pm,
      JohnK says:

      One never goes wrong with”Best of Breed”Or you could try a “Basket” and buy all four.
      It was a lot easier when I got in as there was only one.

  19. On October 9, 2017 at 3:48 pm,
    OOTB Jerry says:
    • On October 9, 2017 at 3:51 pm,
      OOTB Jerry says:

      n many cases, though, immigration was not sufficient to bring down wages to a level preferred by owners and their government allies. Thus, the politically powerful turned to slavery instead. Naturally, imported slave labor would depress wages for both the slaves themselves and for the existing free population that preceded the slaves. This tactic was especially useful in cases where manual labor was particularly difficult, as in the case of the sugarcane fields of the Caribbean or the cotton plantations of the American South. The greatest importer of slaves, however, was Brazil where slaves would, for a time, greatly outnumber the European-descended population.

      • On October 9, 2017 at 4:21 pm,
        b says:

        Putin has Surprises for US New Weapons and Alien Disclosure
        Israeli News Live

        Jerry, have you read the book of enoch?
        Is this nuts?

        • On October 9, 2017 at 4:37 pm,
          JohnK says:

          There’s no sound.

          • On October 9, 2017 at 4:55 pm,
            b says:

            try u tubing it.
            there is sound.

        • On October 10, 2017 at 5:32 am,
          OOTB Jerry says:

          b……..Yes, I have read parts of Enoch , which relates to Genesis……..”in the lands there were giants”…I have not read the entire book.

          • On October 10, 2017 at 5:35 am,
            OOTB Jerry says:

            see: Genesis 6:4

          • On October 10, 2017 at 6:05 am,
            OOTB Jerry says:

            aliens are those who are alien to God/Jesus………the devil will deceive and trick those who he can. Christians are being tricked by many so called church people who fail to rightly divide the word, at this time.

          • On October 10, 2017 at 6:46 am,
            OOTB Jerry says:

            Ephesians 6:12

  20. On October 9, 2017 at 5:09 pm,
    JohnK says:

    here’s the link.Thanks b:

  21. On October 9, 2017 at 5:24 pm,
    JohnK says:

    Big Pharma and Afghani Heroin endorsed by the corrupt Congress.
    America your Welcome.

  22. On October 9, 2017 at 5:55 pm,
    Matthew says:
  23. On October 9, 2017 at 5:56 pm,
    JohnK says:

    Cardin Bill. New Felony charges for Americans.

    • On October 11, 2017 at 4:50 am,
      OOTB Jerry says:

      THIS IS LIKE a bill of BS………..this is like freedom denied………
      According to the ACLU, the Cardin legislation would “bar U.S. persons from supporting boycotts against Israel, including its settlements in the Palestinian Occupied Territories (emphasis mine) conducted by international governmental organizations, such as the United Nations and the European Union. It would also… include penalties for simply requesting information about such boycotts. Violations would be subject to a minimum civil penalty of $250,000 and a maximum criminal penalty of $1 million and 20 years in prison….This bill would impose civil and criminal punishment on individuals solely because of their political beliefs about Israel and its policies.”

      • On October 11, 2017 at 4:52 am,
        OOTB Jerry says:

        Cardin ……another UNAMERICAN…….