OVERNIGHT RECAP:Gold gives back, GBP recovers, Stocks bounce

Politics

OVERNIGHT

  • Cameron Heads to Brussels for 2 Day EU Summit
  • GBP Recovers from 30 yr. low on BOE/BOJ Intervention
  • Euro Stocks End worst losses since 2008
  • China Not a Happy Camper with Brexit Vote

MARKETS (7:45 ET)

Editor's Note: We list Gold under Currencies now. This in light of the massive move versus the Pound Sterling and the EU. It is a reflection of our own bias. That being Gold is money, and viewers should get perspective on its value vs other currencies as they one by on e circle the drain of debasement.

- interactive chart courtesy of KITCO .COM CLICK POP

Currencies

  • GOLD vs GBP 981 -20.41
  • GBP 1.33 +0.85%
  • GOLD vs EU 1179 -21.50
  • EU 1.10 +0.61%
  • JPY 102.36 +0.35%

Stocks

  • CSI 300 : 3084 +0.38%
  • FTSE 6070 +2.57%
  • DAX: 9453 +2.14%
  • SPU: 2005 +1.02%
  • DOW: 17172 +1.10%
  • NIKKEI: 15430 +0.85%

Commodities

  • GOLD: 1311 -12.70
  • SILVER 17.66 -0.08
  • BRENT OIL: 4818 +1.12
  • WTI: 47.20 +.87
  • NG: 2.77 +0.05
  • LME COPPER 4710 +12.00
  • GRAINS: UP ACROSS THE BOARD

 

HEADLINES

Cameron Heads to Brussels for EU Summit

  1. Lame Duck PM heads to EU for 2 day summit with EU leaders
  2. Purpose is to consider next steps following Brexit vote
  3. As result of Vote, UK loses influence but must still abide by EU rules
  4. PM must pull the Article 50 lever in order to complete EU exit
  5. Puts Cameron in awkward spot: his gambit to kick the can on seceding to next PM may back-fire as the longer he waits to enact Article 50, weaker Brexit becomes
  6. One EU dimplomat: If Article 50 is not enacted soon, the UK may not leave at all
  7. Cameron's Gambit is a balancing Act. We are now in a waiting game as to what his priorities are: the wishes of the UK populace, or his own integrity in being the lightning rod of the vote.

China is Not Happy with Brexit

  1. China's Pres. Xi and Cameron have been buddies for past few months.
  2. China has been using the UK as its proxy in negotiating better relations with the EU
  3. Now China must likely find another mouth piece for its own agenda in the EU
  4. Additionally, any "divorce" brings with it localism, protectionism, and possibly tarrifs between tyhe UK and China. In the least the historically healthy trade relationship will endure some strain.
  5. We feel this will accelerate the Chinese "stealth" devaluation of the YUAN. which in turn will accelerate calls for the US Fed to make dollars more plentiful via its repo window to Europe and through lower rates.

Market Comments:

  1. Equities/ FX: The DAX sufferred more than the FTSE in the selloff, while the GBP was devalued more than the Euro. not sure what to make of this yet
  2. Gold: any pull back should not cause hand wringing for bulls. Gold's sustainability is not in question. Events like Brexit will not determine Gold's future value. the REACTIONS to them (Debasement, Lower Rates) will determine the course from here.

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Good Luck Today

 

- Soren K.

 

 

 

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