The summer doldrums continue with another listless overnight session, not helpd by Japan markets which are closed for holiday, as Asian stocks fell fractionally, while European stocks rebounded as oil trimmed losses after the the IEA said pent-up demand would absorb record crude output (something they have said every single month). S&P futures have wiped out almost all of yesterday's losses and were up over 0.2% in early trading.
As first reported yesterday, in a striking development, the BOE failed to monetize all the longer-maturity gilts it had hoped to purchase on just the second day of its restarted QE operation, as it encountered something striking: an offerless bond market. Today Wall Street responds.
Following yesterday's muted action which saw the S&P500 close unchanged, it has been more of the same listless trading overnight, with US equity index futures little changed as the Nikkei fell on the back of a stronger Yen, while government bonds rose and European stocks reversed early gains following the BOE failed bond monetization operation. Crude oil dropped for a second day after Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day,
Today the London Metal Exchange (LME) and the World Gold Council (WGC) jointly announced the launch next year of standardised gold and silver spot and futures contracts which will trade on the LME’s electronic platform LMESelect, will clear on the LME central clearing platform LME Clear, and that will be settled ‘loco London’. Together these new products will be known as ‘LMEprecious.’
The Financial Timespublished an interesting article today in which Diego Parrilla, author, investment expert and precious metals specialist, outlines the positive case for gold and why the gains seen this year are just the beginning of a new gold bull market.
S&P500 index futures were unchanged (up less than 0.1%) following another modest, low-volume levitation in European, Asian shares in a mostly eventless overnight session; oil comes off following gaining overnight with WTI trading just around $43.
"Dishonest money has created a culture of speculation out of ordinary producers and savers. As a result, we confuse financial markets for the source of our wealth." Perhaps at some point our central bankers will come to appreciate that wealth is not created by the printing of money. It is created by honest entrepreneurial endeavour, which is itself jeopardised by constant monetary intervention.
It has been a scorching August for the continental US, with the government predicting, for the first time on record, that every square inch of all 50 states is forecast to see above-average temperatures for the next three months. However, that is nothing compared to what is taking place in the blistering bond market, where new bond issuance is on pace to blow away all records.
The meltup continues with the S&P500 set to open at new all time highs as futures rise 0.2% overnight, with European, Asian stocks higher, as job data pushed MSCI Asia Pacific Index towards highest close since Aug. 2015. Germany, U.K. economic data seen positive, with dollar, oil rising, and gold declining. The MSCI All-Country World Index rose 0.4% and was headed for its highest close in almost a year.