Summary- All Eyes on Draghi today
European Stocks are higher in expectations of Draghi and the ECB handing out Euros by December. Italy has problems and Greece's have never been solved. The Euro is weaker vs the USD, indicating some ECB pump-priming is expected. Precious metals are bid with Gold up around the $1352 mark and Silver hovering at the $20.00 level. We see a nice risk reward trade developing in PM today . Hopefully Draghi doesn't mess it up before our Technical Brief is out. Crude Oil screamed higher on bigger draws than expected in the API report. The market will look for confirmation in todays DOE report. We can only hope for an increase in ECB stimulus which could cause our own markets to rally as well. This will force a Fed tightening post election (Hillary mandate) to cool our own markets and give us the dips we want to buy everything. For a rate hike is needed before the FRB unleashes its own QE4. But that is just our opinion.
Silver 5 Day Shows Work is being done
Market WatchList
GC=F1,351.50+2.30+0.17% SI=F19.99+0.14+0.72% PL=F1,098.70+5.90+0.54% HG=F2.090.00-0.19% NG=F2.70+0.02+0.82% CL=F46.25+0.75+1.65% GLD128.27-0.44-0.34% USO10.52+0.13+1.25%Global News
Investors await ECB monetary policy decisionAhead Of The ECB: What To Expect From Today's AnnouncementGLOBAL MARKETS-Stocks rise as eyes shift to ECB
JAPAN 2Q REVISED GDP ROSE ANNUAL 0.7%; EST. +0.2%
On MarketSlant
How you will be denied your Cash - by the Fed
Our Report before the Gold Rally: Gold Holding $1290 gets you $1349
In Focus- Today's ECB Meeting
We do not expect much from Draghi today. EU markets we feel are slightly bid in expectations of moves down the road. This also ties in with our feeling that the US Fed will raise rates in December to "cool down the froth" we are currently experiencing. The ECB had essentially run out of Gov't bonds it could buy. This will likely lend itself to a longer term decision to change criteria for which the ECB can buy bonds to sterilize its money printing. On the table will be: Term, Quality, and type of bond accepted. We suggest strongly that individuals securitize their credit card debt and issue bonds in Europe. It is likely that at some point the ECB will buy them! Do note that the ECB wil not buy bonds that have the ability to be included in class action lawsuits.
Italian bonds are representing again that foreign holders of Italian debt are bailing. This means the Italian Banks must raise capital. And to do that they must offer proper collateral at the ECB window. Collateral that the ECB will decide is good. Like BBB bonds at 100% face or Gold at 15%?
Italian Liabilities at new highs- ECB will have to Bail them soon.
h/t Zerohedge for pic
Comment:
The ECB would prefer to act in December, but recognizes the risk of higher inflation then may be a detriment to their wishes to act. And so they claim September is on the table. We think that between now and December consent can be manufactured, laws can be changed, and oil can be spoofed lower. What is key to us is the need for Manufactured Consent to get their way. If the rules do not fit they will be changed.
From the ECB Calendar Synopsis:
- 8 December is now our base-case scenario,
- 8 September would have advantages as well.
- Eurozone inflation is likely to be higher in December and thus harder to get QE agreement
- A delay until 8 December could even mean that the ECB might not extend QE at all, for example, if a sharp rise in oil prices were to markedly alter the inflation outlook in the meantime.
Global Markets
Shanghai 3,095.95+4.03 (0.13%)Nikkei 225 16,958.77-53.67 (-0.32%)Hang Seng Index 23,919.34+177.53 (0.75%)TSEC 9,262.89+3.82 (0.04%)FTSE 100 6,861.15+14.57 (0.21%)EURO STOXX 50 3,090.01-1.65 (-0.05%)CAC 40 4,555.19-2.47 (-0.05%)Currencies
EUR/USD1.1287+0.0049 (0.43%)USD/JPY101.6265-0.2185 (-0.21%)GBP/USD1.3371+0.0031 (0.23%)USD/CAD1.2874-0.0009 (-0.07%)USD/HKD7.7561+0.0004 (0.01%)USD/CNY6.6642+0.0016 (0.02%)AUD/USD0.7723+0.0054 (0.71%)
Economic Calendar
DateTime (ET)StatisticForActualBriefing ForecastMarket ExpectsPriorRevised FromSep 610:00 AMISM ServicesAug51.454.254.755.5--Sep 77:00 AMMBA Mortgage Index09/030.9%NANA2.8%-Sep 710:00 AMJOLTS - Job OpeningsJuly5.871MNANA5.643M5.624MSep 710:30 AMCrude Inventories09/03-NANA2.276M-Sep 72:00 PMFed's Beige BookSep-NANANA-Sep 88:30 AMInitial Claims09/03-265K265K263K-Sep 88:30 AMContinuing Claims08/27-NANA2159K-Sep 810:30 AMNatural Gas Inventories09/03-NANA51 bcf-Sep 811:00 AMCrude Inventories09/03-NANA2.276M-Sep 83:00 PMConsumer CreditJul-$14.6B$16.0B$12.3B-Sep 910:00 AMWholesale InventoriesJul-0.1%0.0%0.3%-Read more by Soren K.Group
