Discussion Area for the CNY1m weekly review

[shemyaza]

Week 4 strolls in like a bear in a china store and all hell broke loose. This week’s wreckage is surveyed below.

Type: D1101- is the rare stamp for this week as key paper precious metal saw rises this week (D). D is like B but shows a currency valuation inversion in Platinum which sat in-between the Dollar and CNY1m precisely and so fell in Dollar terms but rose in CNY1m terms. Gold and Silver both saw rises in Dollar terms (11) while Palladium and Platinum saw falls in Dollar terms (01) however Platinum is both 0 and 1 at the same time as above. The CNY1m was devalued again showing (-). The Pound also saw D1101- for the same reason as the CNY1m with a strong depreciation against the Dollar. Palladium crashed this week to a new watch review low falling by double digits in percentage! The Dollar Index fell by Friday close however the expected move in the Gold to Silver paper ratio did not move towards Silver but instead towards Gold reaching a new high for the watch closing at 79.257 for the week. The Physical Gold to Silver ratio also moved higher, strongly rising to a 2^nd Highest level since the August equities correction of 65.285. Gold EGI contracted slightly showing tightened supply as did the Silver ESI which has now tightened for the 4^th week in a row. Iridium and Ruthenium held steady but Rhodium like Palladium fell this week to $640oz. No Dollar Index spike was noticed on Friday night (Aug & Dec) so hopefully a quieter week is ahead.

General Commodities: For the second week in a row, Natural Gas was the star of the show. Up 40% in 3 weeks as winter tries to take hold. Alongside it was Uranium seeing a slight rise for the third week in a row. Fallers this week were Crude Oil, Coal (5^th week of decline), Copper (losing all its gains), Zinc, Aluminium and Cobalt. Steel held for the thirteenth week in a row.

Currencies: The Japanese Yen is the unlucky ongoing safe haven of choice now clearly being the strongest currency in this Merry-Go-Round. A tie for last occurred with a paper-scissors-stone competition between the Pound, CNY1m and Ruble. This week’s points from strongest to weakest are as follows: Yen 6pts, Euro 5pts, Dollar 4pts with the Pound, CNY1m and Ruble sharing 2pts. So far the total strength is as follows: Yen 40pts, Dollar 32pts, Euro 31pts, CNY1m 25pts, Pound 22pts and Ruble 18pts.

Government 10 year Bonds: The Bond Market saw nearly all the watch nations see rising demand for Bonds, pushing prices up and yields down. These were USA, Brazil, UK, Germany, Switzerland (-0.1368%), Holland, Japan, Hong Kong and Singapore. China (2.883%), Mexico and India saw reduced demand pulling prices down and yields slightly higher. Equities and Oil sold into Bonds and Yen.

US Federal Reserve Reverse Repurchases (Repo’s): These climbed down for the week falling by nearly a third to $345 billion. The 10 week rolling total saw a slight fall from last week now but still well above $3.2 Trillion. This week’s figure is still three times higher than the levels seen in the 2008 crisis.

Key Indexes: Quite simply the Baltic Dry Index hit a new all-time low of 429. Stock Markets corrected this week, no risers, just fallers with the Russian Micex suffering the least.

UK Money Supply: M0 saw a very slight Expansion in December Money Supply which pulled down the rolling 12 month Inflation figure to 5.207%. M1 saw a Contraction in Money Supply in new November data pulling down the rolling 12 month inflation figure to 6.16%. Is a Recession coming or alternatively is common-sense returning to Money Supply?

With that the carnage is surveyed, the damage reviewed and Week 4 immediately sacked. The head-hunters are out, lining up a possible replacement however Week 5 seems to be the only applicant. In a quite extra-ordinary week we sip our Horlicks and spread the marmalade as we count the days in anticipation of next week’s review. What a week!

[shemyaza]

Week 5 was appointed to clear up the mess caused by week 4 however made the mistake of bringing another bear into the China store and was promptly given the P45 and told try again next year. The deeper wreckage is surveyed below.

Type: A+ returns this week as all metals were down in both Dollar and CNY1m (A) terms whilst the CNY1m Chinese Yuan 1 Month Interbank Forward Rate appreciated (+) against the Dollar. The Pound due to a continued Devaluation affecting its value across all currencies fell against the Dollar (-). After 3 weeks a devaluation of 4.732% has left its mark. B1110- is shown for the Pound where Gold (1), Silver (1), Palladium (1) saw rises ONLY due to the weakness of the Pound. Platinum fell so heavily (linked diesel refined crude cat conv demand) that the offset wasn’t enough to save it from falling (0). The Pound fell over 9% against the Euro in the last 8 weeks making physical more expensive for us buying from Europe a much larger devaluation than China’s overall devaluation. When this equalises as currencies naturally do PM’s should fall fast in £ terms and be better value. Last weeks Palladium crash links to Petrol refined crude cat conv demand. The Dollar Index rose this week as the weighting of weakness against the Yen was more than countered by the further strengthening against the Pound and Euro as shown below bringing the positive move thus Europe is pushing the Dollar up whilst Japan is trying to push the Dollar down. Most interesting. Physical and Paper Gold to Silver ratios (not the key ones by the way) moved downwards towards Silver in what looks like a VIX effect algorithmic stabilisation mechanism for US Equities (Plunge Protection Mechanism PPM using paper Gold paper as a battery for the Dow Jones Index) costing Gold it’s strength this week. Gold EGI ballooned upwards as either supply is flooding or expected demand has collapsed leaving too much inventory (see oil). Silver ESI moved half a tick upwards to nearly 25 with the ease of supply, just like Gold, maybe not enough demand. Rhodium saw a glimmer of hope rising $10oz this week whilst Iridium and Ruthenium held steady again in their static appearing state. Au:Ir (2.0937) & Au:Ru (25.9219) are continually ticking downwards. Au:Rh saw a high of 1.7256 in week 4 reaching 1.6750 on Friday close. No Dollar Index spike was seen on Friday close a possible further calming of markets from the falls of 2 weeks ago. Note: The Gold 52 week (1yr) moving average is set to cross the Gold 520 week (10yr) moving average this week.

General Commodities: Risers first and it’s a lonely Uranium that was the only star in the show. Fallers this week were Crude Oil (Brent down 22.88% and West Texas Intermediary down 22.15% in the last 3 wks), Natural Gas (after strong rises falling heavily by 15.30% this week), Ruble Brent falling 16.07% and Ruble WTI falling 15.28% in the last 3 weeks, Coal (falling 7.26% the last 6 weeks), Copper (falling 8.95% the last 2 weeks), Zinc and Aluminium. Steel once again held steady for the 14^th week in a row.

Currencies: The Japanese Yen gave way to the CNY1m this week as the unlucky outpost of safety as both near pegged each other. The Yen weakening slightly against the CNY1m. The Pound and Ruble are in a battle for trade strength with weaker currencies providing cheaper export advantages. However Britain isn’t an exporter, it is an importer which raises import prices? This week the Merry-Go-Round points distribution, strongest to weakest were as follows: CNY1m 6pts, Yen 5pts, Dollar 4pts, Euro 3pts, Pound 2pts and Ruble 1pt. The strength league at the end of this week is as follows: Yen 45pts, Dollar 36pts, Euro 34pts, CNY1m 31pts, Pound 24pts and Ruble 19pts. The Pound has been massively devalued in the last 8 weeks so the effects of that may feed through over the coming months. I expect a rebound in value as other currencies work harder to weaken faster.

Government 10 year Bonds: Now the Yield curve is being mentioned for the US Bonds and this is still showing no move towards inversion through short to long term Bonds (Reverse repo’s might be artificially hiding this but is mere speculation so far).  www.stockcharts.com/freecharts/yieldcurve.php keeps an eye on this. This week saw the following 10yr Bonds rise in price with increased demand and therefore falling Yields: USA, UK, Switzerland (-0.1941%), Holland, Japan, Hong Kong and Singapore. Brazil, Mexico, Germany and India saw falling demand for Bonds with accompanied falling prices Yields saw rises. China was in the Bond price rise camp with Yields falling to 2.788% this week. Equities and Commodities sold into Bonds this week.

US Federal Reserve Reverse Repurchases (Repo’s): A fall in Reverse repo’s occurred this week to a lower massive figure of $301.103bn taking the rolling 10 week cumulative average down a tad from $3.284 Trillion down to $3.277 Trillion the past 10 weeks. As mentioned above, are they buying short term US Bonds to artificially hide an inverting Yield curve by forcing the short term end further down with overwhelming demand. Selling of longer term Bonds into Shorter term Bonds would be encouraged by the Fed if continuation of Repo’s was guaranteed to hide a fundamental indicator from going inverse through market forces exiting Equities into Bonds as per the year 2000 and 2007. That is speculation though.

Key Indexes: The Baltic Dry Index saw a new All-Time Low of 373 this week as Global trade is showing clear signs of suspension with demand falling off a cliff. We will await for an upturn. Currently at this level we will see Shipping Bankruptcies and Port failures in the coming months with unemployment and attached debt collapses. Fingers crossed this recovers soon! Stock Markets were all down this week, China and Russia seeing the largest Percentage falls this week. The Russell 2000 index breached below 1000 temporarily before rallying with the Topix also dipping below 1400 before rallying. The FTSE all-share index also fell below 3200 before rallying. As above Equities sold into Bonds for safety.

With UK Money Supply updating last week, we bid farewell to Week 5 where the BDI reached a new record low, Stocks fell close to end of August levels and the Gulf States are now withdrawing their investments from around the world in waves as they are crushed by the Anti-OPEC Tri-lateralists around them (China-USA-Russia). Next week is an unknown, will it be better, will it be worse, tune in next week for the latest instalment of this riveting journey of stat watching. Or there are the FA Cup matches if you prefer….

[KDave]

This is excellent Shemyaza really enjoy reading this. You were spot on with the stealth devaluation of the £, odd how it has not been picked up on. Makes me wonder what caused it in the first place and who benefits? 

[shemyaza]

Thanks KDave, hopefully others can speculate and think about who gains and who loses. Exporters gain from a weaker pound trading in €urope which is a good thing but Import prices rise which is a bad thing when we import far more than we export.

[shemyaza]

Week 6 came in, steadied the ship and delivered a good performance as we gather to look at this week’s review.

Type: D1100+ is the type stamp for this week, D shows positive paper precious metal performance like B but with a currency inversion where we see Palladium both Up and Down and especially Platinum showing an interesting 2^nd event in 3 weeks Up and Down. The CNY1m appreciated strongly against the Dollar (+) with D showing Dollar term rises across the PM board with Gold (1) and Silver (1) Up in both terms. However most intriguingly Palladium rose in Dollar Terms but fell in CNY1m terms (0). Platinum is the strange one. It provided the pivot once again between the US Dollar and CNY1m Interbank Yuan. This happened in Week 4 and has happened again with Platinum rising by 0.326% in USD terms but falling 0.361% in CNY1m terms (0). It hints at a Platinum Standard, that’s the last thing I had considered or even expected to see pop out of this watch (it could be something more mundane though). The Pound appreciated ever so slightly against the dollar this week (+) and combined with all four watch Precious Metals rising in Pound terms (B) gives a Pound Sterling paper PM valuation Type of B+ for the week. Platinum 2016 Maples sold out within 10 minutes from release which was interesting (see above). The Dollar Index rose closer to 100 this week while the Paper Gold to Silver ratio also crept up towards Gold as we should expect as Gold likes a stronger Dollar Index to beat Silver. In the opposite direction we saw the Physical Gold to Silver ratio fall towards Silver which reflects the Pound effect. Are the Plunge Protection Team using Paper Oil instead of anticipated Paper Gold buy-in, sell-out as a Plan B to protect the Dow which likes stronger Oil. EGI contracted quite strongly this week showing reduced availability. The ESI also saw a smaller contraction but implies a smaller reduction in availability. Iridium, Rhodium and Ruthenium saw no change this week. Au:Rh=1.689, Au:Ir=2.111,Au:Ru=26.140. Note: In the Dollar Gold the 52 week (1yr)  moving average has now passed below the 520 week (10yr) moving average.

General Commodities: Risers this week were as follows; Oil (Brent & WTI), Natural Gas, Copper, Zinc and Aluminium. See last week’s fallers list. Fallers were; Coal and Cobalt. Steel (15^th week in a row) and Uranium got boring and were steady this week, no change.

Currencies: How predictable, it’s almost funny. The Merry-Go-Round continues in this episode with hilarious consequences. The CNY1m beat all this week, 6 points and is now pushed out into the storm. By the way the CNY1m appreciated for the 2^nd week in a row helping most stock markets. The Pound 5pts slightly rising against all but above as expected. The Dollar 4pts (again top half of the week). The Ruble hit 3pts with Oil strength (PPM assistance, exchange stabilisation fund theory could be discussed there). 2pts for the Euro with Mario Draghi doing his thing and the single point weakest currency was….The Yen as it tries to get in from the storm (See the Nikkei and Topix below). The Week 6 League Table, strongest to weakest is as follows; Yen 46pts, Dollar 40pts, CNY1m 37pts, Euro 36pts, Pound 29pts and the Oil Ruble 22pts. The weak worked harder to be stronger and vice versa.

Government 10 year Bonds: Hopefully you’re all watching the yield curve. This week a mix of Yield rises and falls were seen. Bond Yield fallers (Rising demand) were; Brazil, Germany, Switzerland (-0.2288%), Holland, Singapore and India. Bond Yield risers (Falling demand) were; USA, Mexico, UK, Japan and Hong Kong. China saw a Bond Yield rise this week to 2.817% with a fall in demand for its Bonds. It was unclear if Bonds sold off. Some did, some didn’t with Oil, Equities and Commodities seeing any movement into them

US Federal Reserve Reverse Repurchases (Repo’s): This saw a rise this week taking the 10 week rolling total up nearly $50bn to $3.323Trillion. That Yield Curve short term end is still rising as longs continue to fall slowly towards horizontality (is this a word?). A non-eventful week though.

Key Indexes: Re-record don’t fade away… The Baltic Dry Index saw a new All-Time low of 354 this week as Global trade is showing clear signs of suspension with demand falling off a cliff. We will await an upturn (Copy and paste from last week). Stock markets were up this week, job losses, falling revenues, past stock buybacks pushing EPS’ up led to markets shoving mechanical hope into falling costs, pushing up profits in a declining cycle. I may be wrong here but this happened many times before just prior to recessions showing up in the statistics. The Coolade optimism of QE must be the driving this. Ups this week on the watch were The Dow, Russell 2k, FTSE100, FTSE All-Share, Chinese Composite and biggest of the week the Russian Micex. Fallers as expected were Japan and the Topix with Hong Kong falling heavily during the week but unable to recover in time before the week’s close. A possible run of rises is seen until confidence starts declining.

With UK Money Supply due next month we wrap up this week with a small smile as we saw no major issues come up to scare everybody into a panic. The FA Cup is next week not this week so that distraction is available if things turn sour next week but hopefully should be a more bullish week. Week 6 leaves the office with the blankety blank cheque book and pen as we head into the search for consistency with Week 7’s appointment. Until then, keep the coffee on the stove, the beans well baked and the toast ready to go for the next Episode of this Roller-Coaster ride of statistics and adventure…well statistics at least.

[KDave]

A Platinum backed monetary system would be a genius move by those in charge if they could get everyone who mattered on board. Stick it to all of those holding currency, gold and silver all at once and laugh at the way through the reset.

The trouble I have with this idea is I can't see how they would get everyone who mattered on board. I would suggest the 2016 maples selling out within 10 minutes is more to do with the low price of platinum and a combination of specific demand for the maple and the speculative element that comes with it. Could be wrong though. Diversity into platinum looks like a sensible idea right now either way, given the price, if for no other reason. 

[shemyaza]

Today I held a real life Laughing Kookaburra bird in my hands was quite an interesting experience to hold the actual bird made famous to us by the Perth Mint. An amazing place. The Platinum Standard is something I'd never even considered, it would push Diesel vehicles off the road (Which magazine found nearly all car manufacturers had the same cheating device type application in vehicles as Volkswagen). Platinum is used in Diesel Catalytic Convertors. Palladium would become it's binary in that scenario which could imply alternatively a full blown 4 Metal Standard but just really weird that Platinum has now done the rarest thing twice in 3 weeks. For a metal to provide the pivot between two heavily traded currencies twice, not even Gold has achieved that since Year 1, Week 1. But could be just a simple rarity. I'll flag it if it happens again. To pivot almost precisely between two major currencies twice is rare. A third time would confirm a reset would bring in a Platinum Standard to replace the Petro-Dollar system which looks like it expired at the end of last year. Just conjecture and first impressions, no hard facts to back it up so don't take it as gospel, thinking way outside of the box.

[KDave]

It is uncharted territory really. I have found very little on the subject.

On the face of it I can see no reason a platinum standard would not be possible, however there are far less above ground stocks of platinum by comparison to gold and silver. Does that matter? Gold has industrial uses too, but a problem also lies where much of the world sees gold as money and holds it in reserve as an asset, unlike platinum. If a system was set up using platinum, to be successful would require the backing of the major players - major players who hold and value gold as a reserve. Vast amounts of it. More research is needed as to where the supplies of platinum are, who owns them and therefore who benefits should such a seemingly far fetched scenario take place.

All probably just coincidence, but please do flag it if it happens again, at the very least so we can cash our gold for platinum before the time comes 

 

[shemyaza]

Week 7 put its mask on and said boo as steady numbers were shown by the Friday close as we examine this week in the figures.

Type: B- was placed on this week as Paper Precious Metals rose in both Dollar and CNY1m values (B) while the Chinese Yuan 1month Forward Inter-Bank Rate depreciated against the Dollar (-) slightly. The same occurred for the Pound with B- as Paper Precious Metals saw rises while the Pound depreciated slightly against the Dollar. No Platinum pivot was observed this week however the ZAR (Rand) strength is noted. The Dollar Index fell slightly this week inclining strength for Silver however Gold was the winner for the week in both Paper and Physical measures as both G:S Ratios saw slight rises. EGI and ESI numbers both fell showing a fair contraction in supply however Silver is steadily moving closer to Gold over the last 20 weeks. Zinc might provide a hint towards that gap over the next few weeks. Iridium, Rhodium and Ruthenium saw no change this week. Au:Rh=1.720, Au:Ir=2.150, Au:Ru=26.621.

General Commodities: The risers this week were Oil, Uranium (Feb futures), Natural Gas, Copper, Zinc (Feb futures) and Aluminium. The fallers were Coal (8^th week in a row) and Cobalt. Steel (16^th week in a row) saw no change once again and remained steady.

Currencies: The Merry-Go-Round continued this week as everyone changed places at the table. The Ruble was by far the strongest this week as Oil rebounded (PPM help is via WTI not Brent) which pushed it to within a whisker of jumping above the Pound in our strength/weakness league table. This week saw; The Ruble 6pts, The Euro 5pts, The Dollar 4pts, The CNY1m 3pts, The Pound 2pts and weakest of the week The Yen 1pt. First time ever negative interest rates by the Bank of Japan ensured a better exporting position for the Yen and 6^th place again via a devaluation tool and its last resort tool. So far the points tally of strongest to weakest is as follows; The Yen 47pts, The Dollar 44pts, The Euro 41pts, The CNY1m 40pts, The Pound 31pts and the Oil Ruble 28pts.

Government 10 Year Bonds: This week was most interesting as Australia continues to see an Inverting Yield Curve. The USA, Brazil, Mexico, UK, Germany, Switzerland (-0.3057%), Holland, Japan and Singapore saw much greater demand for Bonds pushing Bond prices up and Yields down strongly. Hong Kong and India saw falling demand for Bonds notching prices down and thus Yields slightly higher. China saw a Bond Yield rise to 2.911% with falling demand for its Bond. Equities clearly sold into Bonds and Oil this week where Yields fell however the effect did not immediately hurt equities.

US Federal Reserve Reverse Repurchases (Repo’s): RRP’s fell slightly this week as the 10 week rolling total fell $6bn to $3.318 Trillion. The trend line for these is now in place and projects to $400bn weekly in the coming months.

Key Indexes: The Baltic Dry Index dug deeper to plough 317 as its new all-time record low. Equities were generally stronger this week as the Nikkei and Hang Seng (Hong Kong) Indexes showed strong recovery with Russia’s Micex showing the largest jump again on Oil rising. China was the only watch equity market (Composite Index) to record a decline during the week. The Equity rises go against the Bond market demand rises which creates a puzzle as to why Equities rose? The next few weeks will shake that puzzle out but rises are expected for a little while longer.

With UK Money Supply numbers due out in February we wave goodbye to Week 7 and the help it gave to Precious Metals and Commodities. It can take its mask off and pass the baton over to the incoming Week 8 which has the job of holding the ship steady as she goes. It was a week where Japan instituted negative base rates for the first time in its history and the Baltic Dry Index reached the lowest point in its history (again). Until next week, prepare the calendar, dust down the alarm clock and pat down the comfy armchair for Week 8’s exciting broadcast that is the CNY1m review.

[Pipers]

I was looking to see how platinum was doing!  

Do you think silver is finally closing in on gold (ratio)? 

Bonds gilts are a poor investment though maybe the last game in town apart from tangibles what's your take?

 

 

[KDave]

There was no mention of platinum or am I tired and missed it? Should I take that as a signal to buy? 

[Pipers]

@shemyaza

Quote'No Platinum pivot was observed this week however the ZAR (Rand) strength is noted '

Not shaw what this means as far as the Platinum price goes, I understand your suggestion on platinum and South Africa but what is your link when SA have ramped up Platinum production for 2016.

KDave whats your take on the Platinum pivot 'price. 

 

 

 

[KDave]

Thanks for pointing it out Pipers, to me as a layman reading it I think it is too early to say, the first two pivots were two weeks apart so not seeing another yet means nothing. With that said, I am leaning more towards the 'extremely rare coincidence' at the moment, because it is just so unexpected and seemed so unlikely before these price movements brought about the theory, not to mention the issues with the relatively tiny above ground supply and industrial and vehicular use of the metal. It also makes too good of a conspiracy theory to be true. 

I am somewhat biased though, as I am also hoping the pivots were coincidence. I am currently in the unfortunate position of having no exposure what so ever to platinum beyond the catalytic converter on my car 

[Pipers]

I was thinking of making a small play into platinum for a 15 year investment, what ever way I look to invest its expensive either vaulting or physical, the other option is unallocated but I'm not happy with that may as well buy paper. 

My other play I was looking at was copper on a 5 year hold but storage is expensive even at Liverpool. 

[KDave]

I am also looking to build a small position of physical in the other precious metals (Platinum, Palladium and Rhodium) and just take the hit on the premium. Over a 15 year time frame anything can happen, so in my mind physical is the safest way to hold it all things considered and the additional cost of that safety is the payment of VAT and delivery. A small position is all that is needed, the logic being that the above ground supply is so small that any price increase will have to be incredible for platinum or the other metals to be used on a monetary basis. If the metals remain non-monetary then its the same principle as investing in any valuable and scarce material that has industrial use. Just my thoughts not advice. I am not sure what can be done regarding copper, perhaps the only way to do that is invest on the supply side via stocks? 

[shemyaza]

 

Week 8 began taking its mask off as manipulation continues to point in one direction away from another. A quiet stint in charge which week 8 can be proud of in steadying a declining value ship.

We kick off with Type B+ being seen this week. CNY1m appreciation + against the Dollar and Paper precious metals rising across the board in both Dollar and CNY1m terms B. In Dollar to Pound terms we see Type D1101+. The Pound strongly appreciated this week + against the Dollar. Paper precious metals across the board rose but B isn’t used, D is used due to Palladium falling 0 in Pound value terms against the rise seen in Dollar & Pound terms generally 1. No Platinum Pivot was seen this week. The Dollar Index fell strongly against its large piers this week seemingly depreciating or selling into Yen, Euros and Pounds. Easy to do if Dollar holders buy the other 3 including the US itself as foreign reserves and is typical. Silver did indeed see a paper effect of that fall strengthening slightly against Gold in the Gold to Silver Paper Ratio however the Physical Ratio saw a somewhat artificial rise towards Gold with EGI falling showing a contraction in supply or rising demand and the ESI rising substantially showing large over supply or lower than expected demand contradicting the recent trend towards Gold’s EGI. I expect to see more balance in the physical figures over the coming weeks. Zinc continues to rise at present. Iridium and Ruthenium remained steady this week however Rhodium saw a fall by $10 to $640oz. Current Au ratios are as follows; Au:Rh=1.8339, Au:Ir=2.2571 and Au:Ru=27.9450. M0-M2 US Money Supply Parity for Gold & Silver 2004 through to the end of January 2016 shows Gold at $967.04844oz and Silver  $15.00897oz or a 64.431 Gold to Silver ratio by end of January. February estimation sees Gold $971.88oz and Silver $15.084oz.

General Commodities: The risers this week were Coal (Now Feb futures seeing a large rise after many weeks of falls), Copper (3 weeks rising), Zinc (3 weeks rising) and Cobalt. Fallers this week were Oil (WTI falling heavily compared to Brent), Uranium, Natural Gas (above 10% fall this week) and Aluminium. Steel remained unchanged for the 17^th week in a row maintaining stability.

Currencies: As mentioned above, the cyclic rotations continue as expected and so we look at this week. The Yen is now back outside in the storm, negative interest rates having no eventual effect on Yen strength appreciating heavily and ending the week strongest with 6 points. Next came the €uro only weaker than the Yen thus 5 points. The Pound saw appreciation except against the above, 4 points. 3 points was seen by the CNY1m as it depreciated against the above but appreciated against the Dollar and Ruble. The Dollar was stronger than the Ruble thus collecting the 2 points leaving the Oil Ruble weakest in last with 1 point and indoors from the storm.  The points tally so far after Week 8 shows the following strength standings; 1^st The Yen 53pts, 2^nd a tie between The Dollar and €uro 46pts, 4^th The CNY1m 43pts, 5^th The Pound 35pts and 6^th The Ruble 29pts.

Government 10 Year Bonds: Most Bonds saw demand rises and thus falls in Yield as equities seemed to move into the relative safety of Bonds. Yield fallers this week were the USA, Mexico, Germany, Holland, Japan, Hong Kong, Singapore and China (2.886%). Lower Demand for Bonds and thus Yield rises were seen in Brazil, Switzerland (-0.2970%) and India. The UK 10yr Yield held steady this week, no change. Equities moved into Bonds and the Yen but not necessarily elsewhere. The Yield curves continue towards inversion with Australia and Germany closest at present.

US Federal Reserve Reverse Repurchases (Reverse Repo’s): These fell this week by $16.834bn to $292.271bn however the 10 week rolling total rose ever so slightly by 48 ticks to $3.31942Trillion from $3.31894Trillion.

Key Indexes: The Baltic Dry Index scraped even lower all-time lows this week finishing at 297 and again seems to appear to show a bottom but is now entrenched below the equivalent Freight Index (1750’s to 2007) 1970’s Oil Embargo lowest ever levels. It must rise at some point otherwise the failures through the Shipping and Port industries will be widespread. It must rise soon. Stock Market Equities saw general falls this week with the Russell 2000 being hit hardest on the watch as it does not benefit from the plunge protection mechanism. China saw its composite index rise slightly for the week however the Russia Micex fell slightly on Friday to squeak lower for the week by Friday close. The Japanese Nikkei Dow has lost 3000pts since Week 50 or 15% so far on the watch which may require deeper negative interest rates to inject fresh weakness back into the Yen to improve export competitiveness. Japan is one to watch at the moment if you like your negative interest rates not just Switzerland. A fairly quiet week however in the grand scheme of things. Equities sold into Bonds and Yen this week.

UK Money Supply: M1 figures show a rise in M1 Money Supply with an annual inflation from Jan 2015 to Dec 2015 of 6.2521%. Month on Month (MoM) this rose by 0.71753% which if reflected continuously every month would indicate an annual decline in an M1 Pound held from £1 to 91.778p or 8.222% depreciation in value after 12 months. M0 figures are due out this week so Week 9 will have that stat looked at under the bonnet.

With that Week 8 packs its bags and ships out after a fairly good week for Precious Metals. Have a beer on us as we wave it off. Week 9 has written a letter asking to join but in keeping with tradition we must wait until week 8 has left before entertaining a new captain. We saw Japanese negative base rate policy completely strengthen the Yen which goes against all financial laws of physics and indeed suggests something else is moving the markets en-masse. We saw the Baltic Dry Index reach a new All-Time low once again. We saw Leicester City move clear at the top of the league. We saw Gold making moves which seem to hint at a bull market and we saw Platinum discussed as a monetary metal by the IMF. We await with eagerness and trepidation, itching to pull the wrapping off Week 9’s statistics and implied booms or collapses as we watch the clock, open the CNY1m Advent calendar daily countdown and prepare the comfy sofa in anticipation of next week’s CNY1m review.

[shemyaza]

To Pipers and Kdave, Platinum showed up a really weird possible coincidence which absolutely nobody else would've noticed when looking at it from an Interbank Yuan perspective. SDR's are derived by Interbank currency, not public currency so I found that most interesting to pop up completely out of the blue. Afterwards I have a look and lo-and-behold indeed the IMF are looking closely at Platinum. I don't pay much attention to the ZAR (South African Rand) but drew my attention after seeing that Pivot happen twice as South Africa is a major Platinum mining nation where very few exist. The Ruble is the other currency reflecting Platinum which I keep an eye on in respect to Oil and Natural Gas. SPLT is paper platinum for us usual standard investors if I remember that correctly. Metallic Financial Standards (Gold, Silver etc) I think of as Nationalisations of that metal which reduces the value of it in favour of Central Banks and Governments. It needs more looking into but just concerns me a little the history and effect of these standards in the past.

[shemyaza]

The Gold to Silver ratio. It's too early to tell at the moment. I could say more about the Plunge Protection Mechanism but I don't think Gold is as high as it appears to be. It's a manipulated market and I am sure if equities face a massive sell-off, Gold will be crushed below $1000. A few ratios need to work in tandem to indicate a transition from expensive to cheap in Barter derivatives, the markets have been mistaken into thinking its happening (Equities sold into paper commodities en-masse) a few times now and I just don't see the time being right just yet. I'd bet any analyst worth their salt and free to speak would explain in detail how PPM uses paper commodities as batteries for Dow Index protection when private investors are vacant from equity buying and only selling into Bond protection, hence the massive cattle movement of private money into Bonds over the past 8 months and designed in closes of the Dow above trigger levels. Its my observation of the tickers and is sad to watch. I hope I'm wrong though and going with cash stacking while I watch it play out. I don't see a collapse, I see a slow "Managed" (see above) decline but for a collapse to occur that Bond maturity cycle would trigger it. That's what the markets fear the most the Bond Maturity cycle and those all coincide for redemption in 2018 for an enormous amount of money.

[shemyaza]

Week 9 enters the fray with one target, stability! It came away wondering what hit it. The slow car crash is analysed as we pick over the stats in this week’s latest installment of the review.

We slap Type B+ on this week’s review as The CNY1m appreciated ‘+’ for the 4^th time in 5 weeks against the Dollar while Paper Precious Metals rose in both CNY1m value and Dollar value ‘B’ across the board. No Platinum pivot was observed this week however the Gold to Palladium ratio will be watched closing at 2.3746 this week. The Dollar Index saw a fall this week by about 1% (Yen strength) but didn’t bring in a corresponding fall in the Paper Gold to Silver ratio which remained slightly higher by Friday close towards Gold. The Pound saw Type B- with the Pound falling slightly ‘-‘ against the Dollar. The Physical Gold to Silver ratio saw a similar widening towards Gold which saw a contracted EGI this week showing either more demand or less supply. ESI expanded strongly showing either less demand or higher supply. Zinc resumed it’s Week 46 level and coincided with Silver reaching and passing above its Week 46 level. Iridium and Ruthenium remained steady again this week in a kind of stasis that is also holding Steel while Rhodium joined in with the B+ move and rose $10oz this week. Current Au ratios are as follows; Au:Rh=1.9044, Au:Ir=2.3805 and Au:Ru=29.4733. A good week for precious metals.

General Commodities: This week we saw rises in Zinc (4^th week in a row) and Aluminium whilst we saw falls in Oil (WTI falling heavily compared to Brent), Coal, Uranium, Natural Gas, Copper (ending its 3 week tear) and Cobalt. Steel surprised nobody by holding steady in stasis for the 18^th week in a row.

Currencies: The merry-go-around kept the Yen from getting onboard as it stayed outside in the storm causing the Nikkei Dow and Japan Topix indexes to finally fall off the anticipated cliff. The ordinary Japanese people as Bond buyers & holders have had enough and are now selling Bonds into Yen to re-invest for greater returns elsewhere. Yen strength re-iterated its place as the watch's strongest currency of the week with 6 points. The €uro retained its strength only beaten by the Yen thus gaining 5 points. The CNY1m even during the New Year Holiday week saw strength as it was only beaten by the above two, 4 points awarded. The Dollar quietly keeping out of the spotlight captured 3 points. The Pound regained its weakness and lost to all but one gaining 2 points with that one being the Ruble picking up the solitary point but weakness is strength for exporters (Germany 1950’s, Japan 1980’s) so kept its competitive advantage. To date the Currency strength league, strongest to weakest is as follows; 1^st Yen 59pts, 2^nd €uro 51pts, 3^rd Dollar 49pts, 4^th CNY1m 47pts, 5^th Pound 37pts and 6^th Ruble 30pts.

Government 10 Year Bonds: Most Bonds saw demand rise pushing prices up and Yields down, these were; USA, UK, Germany, Switzerland (-0.2980%), Holland, Hong Kong, Singapore, India and China (2.882%). Demand rose due to flight from Equities. The fallers in demand seeing Bond price falls and Yield rises were Brazil, Mexico and notably Japan which saw an exodus from both Equities and Bonds on a massive scale. Keep a close eye on Japan, the Bank of Japan in particular.

US Federal Reserve Reverse Repurchases (Reverse Repo’s): These contracted a little more this week by $9.899bn to $282.372bn however the 10 week rolling total still climbed higher rising 1202 ticks to $3.33144Trillion from $3.31942Trillion.

Key Indexes: The Baltic Dry Index hit its all-time low on Wednesday before recovering a point to 291 on Friday. Equities = Confidence Carnage. All watch indexes saw falls except China due to being closed for the week for Chinese New Year holidays. The Dow Jones volatility and Plunge Protection Mechanism shoved Gold volumes into the stratosphere while Silver volume utilised the ratio profits during manipulation from Gold into the Dow and also Gold into Oil. A meltdown point was averted by a story which appeared out of nowhere and subsequently disappeared again bringing in the expected movement of Gold into Oil which had no actual fundamental basis. A clinic for PPM students by the way, most useful. The hardest hit fallers were the brutally punished Nikkei Dow Index (spilling -11% of its guts this week) and the wider Japan Topix Index (spilling -12% of its guts this week). The Hong Kong Hang Seng Index saw a -5% fall and the Russia Micex saw a -3% fall as the other most significant declines in the watch. Equities sold into Bonds and Yen this week, Japanese Equities and Bonds sold into Yen this week.

UK Money Supply: M0 figures show a fall in M0 Money Supply with an annual inflation from Feb 2015 to Jan 2016 of 4.95513%. Month on Month (MoM) this rose by 0.54393% which if reflected continuously every month would indicate an annual decline in an M0 Pound held from £1 to 93.698p or 6.302% depreciation in value after 12 months. M0 holds value better than M1 presently.

Week 9 came in, waved a magic wand at PM’s and spat at the Stock Markets and Japan. It walks away confused and dazed having taken sides but hands the flask of tea over to Week 10 to try its best and not mention Deutsche Bank and Barclays. What will the financial gods do this week? Tune in and see with a bottle of Pimms and a Cucumber sandwich as we dissect the stats in next weekends CNY1m review.

 

[shemyaza]

Week 10 stepped up to the plate and said “Equilibrio” hitting a double as a brief sense of normality passed through. The apparent rally is analysed in this the 62^nd weekly CNY1m review.

We have to go back to Week 50 when we last saw Type A- hit the weekly paper precious metal markets 12 weeks later it stamps its mark again. All four Paper PM’s were down on the week ‘A’ and the CNY1m depreciated ‘-‘ to the Dollar. In Pound terms, this was repeated with A- applied as the Pound depreciated to the Dollar once again. No Platinum pivot was observed this week. The Gold to Palladium ratio closed at 2.4653 in Golds favour. The Dollar Index was higher this week as the €uro and Pound helped offset Yen strength which as we know strengthens Gold over Silver with the Index rise complimented by the Paper Gold to Silver ratio rising to 79.907 by Friday close in Gold’s favour. The Physical Gold to Silver ratio similarly widened to 65.818 in favour of Gold. The EGI contracted to 5.3206 this week showing higher demand or lower supply. The ESI expanded to 28.0388 this week showing lower demand and higher supply although the spectre of deflation is so far yet to be seen, the ‘Discount’ wedge. Zinc powered on to Week 45 levels however Silver did not see that week’s $15.82 price at close. Iridium and Ruthenium remained in stasis while Rhodium was dismissive of the main four metals rising by $10oz to $660oz. Current Au ratios are as follows; Au:Rh=1.8580, Au:Ir=2.3582 and Au:Ru=29.1964.

General Commodities: The risers of the week were; Oil (WTI crude rising sharply compared to Brent Crude), Copper, Zinc (5^th week in a row), Aluminium and Cobalt. The fallers of the week were Coal, Uranium (3^rd week in a row) and Natural Gas (3^rd week in a row). Predictable Steel remained unchanged for the 19^th week in a row.

Currencies: The merry-go-round saw the Ruble trade stronger against the watch currencies this week as Oil had a strong week beating all for 6 points. The Yen retained strength only beaten by the Ruble to capture 5 points. The Dollar still keeping quiet edged into 3^rd strongest with 4 points. The CNY1m slipped into 4^th with 3 points while the Pound retained weakness but beat the €uro into 5^th for 2 points with the €uro trying to get back indoors with 1 point. The BoJ continues to concern me. The currency strength league currently stands at; 1^st Yen 64pts, 2^nd Dollar 53pts, 3^rd €uro 52pts, 4^th CNY1m 50pts, 5^th Pound 39pts and 6^th Ruble 36pts.

Government 10 Year Bonds: Nearly all Bonds saw rises in demand, rises in price and falls in Yield as the Yield curves across the board are now reaching inversion US, Brazil, Mexico, Germany, Switzerland (-0.3630%), Holland, Japan, Hong Kong and China. The UK saw no real change while Singapore and India saw Yield rises as demand fell. No net movement in large scale was seen but the Yield curves of many countries now stand Inverted. Japanese Bonds continue nationalisation into negative territory. This reverses debt into an interest paying asset for the Ministry of Finance. Never ignore Japan.

US Federal Reserve Reverse Repurchases (Reverse Repo’s): These expanded a little more this week by $16.374bn to $298.746bn meanwhile the 10 week rolling total climbed higher rising 1492 ticks to $3.34636 Trillion from $3.33144 Trillion. The upward trend continues.

Key Indexes: The Baltic Dry Index has seen recovery this week, finally showing signs of life and risen 24pts from 291 to 315. It is still far below the breakeven point of the various industries around it but it is a relief to see. All watched Stock Markets saw rises this week as a predicted shorting bounce occurred which stalled the declines temporarily. As predicted Gold was hit hard and sold into oil as it benefitted dragging up indexes in the early part of the week. Oil suffers the paper to physical ratio problem precious metals have on trade indexes and is not 1:1, far from it. Oil steadied the ship as paper was bought by the PPM thus WTI rose higher than Brent. It is sadly as regular as clockwork if notice is taken.

With no new UK Money Supply figures we end Week 10 on a good week for shares but a poor week for metals seeing the dreaded ‘A’ type down stamp. One day, the Physical price will be set by Physical price setting. Until then will it be chips, or jacket spuds, will it be salad or frozen peas, will it be mushrooms or fried onion rings, you’ll have to wait and see. Same time next week, Week 11’s review awaits.

[shemyaza]

Those triple-locks, if that scenario pans out, £1 buys $2

[shemyaza]

Week 11 brought in the heavy gear and cakes for the office on its anniversary appearance and subsequently got sent packing after a poor performance in the precious metals. The apparent rally is analysed in this 63^rd weekly CNY1m review.

Well another Type A- occurred, this is CNY1m depreciation ‘-‘ against the dollar and Dollar, CNY1m Precious Metal paper spot declines ‘A’ for the week. The pound viewpoint (our viewpoint) saw B1011- occur as the Pound strongly depreciated ‘-‘ against the dollar (has been occurring frequently since May, more-so since August 24th) producing a counter-acting rise in PM paper spot prices in ‘B1’s’ with Silver not quite benefitting enough from the devaluation ‘0’ which fell. No Platinum Pivot was observed so I’ll mention it if seen. Gold to Palladium closed at 2.5338 in Golds favour. The Dollar Index saw a large rise of 1.555% to finish higher as the €uro, Pound and Yen weakened against the dollar. Paper Gold benefitted again from its correlation with Dollar strength against paper Silver as the expected Gold to Silver paper ratio rose to 83.264 in dollar terms. The Physical Gold to Silver ratio also saw a large rise but here we view in Pound terms and the move reflected Pound weakness (-3.861%) into a rise of 3.742% in the ratio to 68.281 in Gold’s favour. EGI expanded to 5.6302 reversing its contraction the previous week. Physical holdings sold for profit, over supply perhaps? ESI expanded once again to 28.4458 as either over supply or under demand continues pressure on potential discounting. We’ll see how it plays out. Zinc powered on upwards. Iridium and Ruthenium continued in stasis while Rhodium once again dismissed expectation and rose by another $10oz to $670oz. The current Au ratios are as follows; Au:Rh=1.8243, Au:Ir=2.3506 and Au:Ru=29.1026.

General Commodities: The risers of the week were; Oil (Brent crude rising sharply compared to WTI crude), Copper, Zinc (6^th week in a row) and Aluminium. The fallers this week were; Coal (3^rd week in a row), Uranium (4^th week in a row and also fell -4.478% this week), Natural Gas (4^th week in a row) and Cobalt. A surprise by Steel however as it remained steady for the 20^th week in a row. We have 3 stasis watch items on the go here.

Currencies: Well, it had to happen eventually. This week the Ruble defeated all before it and claimed the 6pts on offer as strongest currency of the week. This took it off last place for the first time in many weeks. Behind it followed the Dollar collecting 5pts and becoming increasingly un-competitive. Third strongest of the week was the CNY1m collecting 4pts. Close behind was the Yen as it fights to get back its competitiveness as it sensibly fell to fourth place collecting 3pts. The last two places were taken by the fifth place €uro claiming 2pts and finally Pound Sterling finished last, weakest but most competitive collecting 1pt and slipping to last in our current currency league. The Currency strength league currently stands at 1^st Yen 67pts, 2^nd Dollar 58pts, Tied 3^rd €uro & CNY1m 54pts, 5^th Ruble 42pts and 6^th Pound 40pts. It is a merry-go-round, things change quickly. Again a weak currency is a competitive currency, a strong currency is an un-competitive currency. Japan is in an awful position at the moment and must devalue quickly. The Pound has been falling since August 24^th 2015 and to use the recent Brexit issue to explain a 6 month ongoing decline is dis-honest and a critical media propaganda mis-representation of the facts. 6 months!!! Look at your graphs.

Government 10 year Bonds: This week we saw general falls in Bond Yield across the board where Bond demand saw rises and thus Bond Prices (Yield falls). These were; Brazil, Mexico, UK, Germany, Switzerland (-0.408%), Holland, Japan (-0.062%) and Hong Kong. Bond Yield rises were seen where demand falls and Bond prices fall as follows; USA, Singapore, India and China (2.919%). Most yield curves are now inverted.

US Federal Reserve Reverse Repurchases (Reverse Repo’s): These contracted this week by $12.070bn to $286.676bn meanwhile the 10 week rolling total fell lower for the first time in a while closing down 2004 ticks to $3.32632 Trillion from $3.34636 Trillion. The upward trend has been paused.

Key Indexes: The Baltic Dry Index continues its slow recovery upwards adding an extra 12pts this week to reach 327 for the week. Still far below breakeven for the industries around it but improving a good sign. All stock markets had a fairly quiet week in the end and most finished higher with just the Chinese Shanghai Index finishing lower with a fair fall. The Russell 2000 had the strongest week of the list reminding everybody it shouldn’t be forgotten. An overall quieter week is welcomed.

With no new Money Supply information due this week we wave goodbye to Week 11 with mixed feelings as Britain fell in line with everybody else and felt the effects of a weak pound fully improving our Precious Metals positions if we hold Gold. Time to sell they would say, we’ve given you the window of opportunity. We never listen to the man from Del Monte. Hold and wait, have patience. We remind Week 12 to bring the cream eggs and coffee for next week’s fireside chat while watching an old episode of Thundercats. Well done Manchester City on the League Cup and on that note stay tuned for next week’s CNY1m review.

[shemyaza]

Steel has collapsed in price.

[shemyaza]

Just added the new stats for the week. Notice Palladium has risen sharply, Steel Billet (FY300 Cash) has crashed (I'll mention this in tomorrows discussion, the timings of the changes in this stat are very important through the system as a whole). The Dollar depreciated 5.9% against the Ruble this week and -11% now in the last 3 weeks against the Ruble but no mention of it on the news. Pound appreciation has restarted.

[KDave]

It is good to hear that the worst of the exchange rates are likely behind us Stirling stacker's. As for the Ruble it had to come back at some point and the increasing oil price is likely the main driver. 

I think the surprising thing with Palladium is that it has taken so long for it to move up, when both Platinum and to a lesser extent Rhodium have been making gains alongside gold. Overall though the whole price increase in PGM's is a little bit odd given 80% of demand is industrial. Can safe haven buying have such an effect do you think or is there something else going on? If Steel is crashing why are the other metals including copper doing so well do you think?