In the last days of the Second World War American troops uncovered a large stash of gold, silver and paper currencies at the post office of a small town in eastern Germany called Plauen. Documents show that the stash was directly linked to SS chief Heinrich Himmler.
That Makes Sens ... Wait, WHAT??
The European Commission has ordered 11 EU countries to enact the Bank Recovery and Resolution Directive (BRRD) within two months or be hauled before the EU Court of Justice, according to a report from Reuters on Friday.
The EU issued a press release this morning which could perhaps be summed up in 2 words - "not fair." Following the denial-of-entry by Russia of several EU politicians, Russia has released a list of 89 names who will face travel bans - of exactly the same type as EU and US enforced upon numerous Russian elites. Europe is displeased that Russia would dare do unto them as they have done unto others... "we deem this measure as totally arbitrary and unjustified," they exclaimed, adding, "we don’t have any further information on the legal basis or the criteria or the process of these decisions."
June is off with a bang, and a very busy week in the macro economic calendar, both globally and in the US, which culminates with the latest "most important ever" payrolls report, one which will surely be closely watched by a Fed which may hike as soon as a few weeks from now (but probably won't).
The most important takeaway from the tragic events in France is that we need to stay as vigilant as ever in defending our freedoms. As the aftermath of the Hebdo attack has shown, governments will misuse any opportunity they see to further restrict our freedom and arrogate more power to themselves. This is especially easy when people are faced with an understandably emotionally tense situation like 9/11 or other terrorist attacks. However, thanks to the Internet we are less prone to accept State propaganda and are able to get a more objective view of what is really happening in the world around us.
Six months ago we warned that Austria was considering it, and now, as Kronen-Zeitung reports, with no rigged Swiss-like referendum required, Austrian Central Bank Governor Edwald Nowotny has committed to repatriating 110 tonnes of gold. This is part of Nowotny's new "gold strategy" and with his position (on paper) as one of Draghi's foremost lieutenants, appears to be a huge stab in the back for super-Mario. While gold withdrawals from the NY Fed are incessant, this time it appears the Bank of England faces the trust-fall as 80% of Vienna's gold is held there.
We need to wake up....and FAST!!!
Today’s Eurogroup meeting will be key in determining where Greece and its creditors negotiations currently stand. Over in the US today, it’s the usual post payrolls lull with just the labor market conditions data expected.
Quickly looking at the potential market moving events this week, US payrolls on Friday will be the clear focus. In terms of expectations, our US colleagues are expecting a +225k print which matches the current Bloomberg consensus, while they expect the unemployment rate to drop one-tenth to 5.4%. Elsewhere, Thursday’s UK Election will be closely followed while Greece will once again be front and center.
With London, Paris, and Basel’s compliance, Nazi Germany had just looted 23.1 metric tons of gold without a shot being fired.
With talks between Greece and its creditors expected to go mostly nowhere in Riga later this week, and with speculation about an energy deal between Athens and Moscow (i.e. the precursor to the dreaded "Russian pivot") looking less like speculation and more like reality with each passing day, Europe is going the spite route by filing anti-trust charges against Gazprom.
While this week sees the peak of Q1 earnings season, it will be a generally quiet week on the macro economic front for both EM and DM, with the emphasis on the latest seasonally adjusted manufacturing sentiment surveys, US durables and Japan trade.
While today's macro calendar is empty with no central bank speakers or economic news (just the monthly budget (deficit) statement this afternoon), it’s a fairly busy calendar for us to look forward to this week as earnings season kicks up a gear in the US as mentioned while Greece headlines and the G20 finance ministers meeting on Thursday mark the non-data related highlights.
The Middle East’s ongoing descent into chaos and China’s impending ascendancy to the status of global superpower are just two of the many threats that the US, European Union and Russia all share. Each of these issues should certainly occupy a higher position on their respective agendas than the breakup of Ukraine or the insolvency of Greece. Leaders of all three governments would be well-advised to set aside their differences, or at least to prevent those differences from obstructing cooperation on more important issues. Unlike its predecessor, the Second Cold War will not be bilateral. Today’s world is far more chaotic, kinetic and dangerous than it was fifty years ago.