Norway

If a trader knew nothing about the growth, the debt, the inflation, the exporters vs. importers, the serial defaulters, currency manipulators, hot-money or conversely deflation fighters; simply grouping the nations of the world on whether they were 'friend' or 'foe' to the US would provide an odd highly correlated value perspective on the interest rates paid on 1yr and 10yr sovereign debt... It appears your status with the central bank cabal was more important than your ability to repay the loaned money?

Despite the ongoing mainstream media meme that Russia is becoming 'isolated' from the rest of the world thanks to Western sanctions, it appears they have found a few new 'old' friends to become un-isolated with. On the heels of Russia's food-import-ban sanctions last week, Russian and Chinese officials have announced an agreement that China will start selling fruit and vegetables directly to Russia via a special logistics center in Russia's far east. Notably, this week saw Russia's GDP beat consensus expectations, Ruble rally, and stocks jump as German confidence plunged - can you say blowback?

“The point of a series of regional wars organized by the Americans, especially today’s catastrophe in Ukraine, centers on the U.S. securing control over all of north Eurasia” to bolster “its position against China. That’s how the U.S. military and oligarchs are trying to maintain leadership in the global competition with China....Task no. 1 is to block those threats to economic security that are now coming from the U.S., neutralize them by reducing the dependence of our external economic activity on the mercy of American politicians, whose aggressiveness threatens the entire world."

Gold is nearly 2% higher this week and its technical position has further improved (see key charts). On Wednesday, gold broke out of bullish descending wedge chart pattern that has formed in recent months. Another buy signal for gold came when gold rose above the 20 EMA and 50 EMA (exponential moving averages). Also positive is the fact that the price momentum oscillator (PMO) has turned up, indicating that a positive momentum shift has occurred.

Unlike last week's economic report deluge, this week has virtually no A-grade updates of note, with the key events being Factory Orders (exp. 0.6%), ISM non-mfg (exp. 56.5), Trade balance (Exp. -$44.9 bn), Unit Labor Costs (1.2%) and Wholesale Inventories (0.7%).

Ten times a year, once a month except in August and October, a small group of well dressed men arrives in Basel, Switzerland.  Carrying elegant overnight bags and stylish brief cases, they discreetly check into the Euler Hotel, across from the railroad station. They come to this quiet city from places as disparate as Tokyo, Paris, Brasilia, London, and Washington, D.C., for the regular meeting of the most exclusive, secretive, and powerful supranational club in the world.

In the last few days a new and curious question has emerged: would India embrace the US/Japan axis while foregoing its natural Developing Market, and BRICS, allies, Russia and China. We now have a clear answer and it is a resounding no, because in what was the latest slap on the face of now crashing on all sides US global hegemony, earlier today India refused to sign a critical global trade dea. Specifically, India's unresolved demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline. WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight that "we have not been able to find a solution that would allow us to bridge that gap."

• EU to weigh extensive sanctions on Russia (FT)
• U.S. lifts flight ban to Israel (Reuters)
• Russia says will cooperate with MH17 probe led by Netherlands (Reuters)
• Norway faces ‘concrete and credible’ terrorist threat (FT)
• Don’t Tell Anybody About This Story on HFT Power Jump Trading (BBG)
• But... but... PMI: Unilever Sales Growth Misses Estimates on Asian Slowdown (BBG)
• World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake (BBG)
• Qualcomm latest US tech company to reverse in China (FT)
• Hamptons Home Sales Rise as Buyers Find More Inventory (BBG)

The holiday shortened, and very busy, week includes the following highlights: [on Monday] US Chicago PMI; [on Tuesday] US ISM Manufacturing, Construction Spending, and Vehicle Sales, in addition to a host of PMI Manufacturing in various countries; [on Wednesday] US ADP Employment, Factory Orders; [on Thursday] US Non-farm Payrolls and Unemployment, MP Decisions by ECB and Riksbank, in addition to various Services and Composite PMIs; [on Friday] US holiday, Germany Factory Orders and Sweden IP.

Having learned last week that the world's central banks are their sovereign wealth proxies have secretly pumped over $29 trillion into markets in the last few years, it is not entirely surprising to hear from one of the largest - Norway $888 billion oil fund - that it is buying stocks with bond hands and feet. As The Financial Times reports, Yngve Slyngstad, chief executive of Norway's sovereign wealth fund, is hiring aggressively to manage its real estate portfolio and while the oil fund already owns 2.5% of every listed European company on average, it plans to go above 5%. Phew, bagholder found...

As more sectorally focused Russia sanctions loom as AFP reports Petroshenko is consider revoking the cease-fire over the helicopter downing (and Iraq appears set to light the blue touch paper and retire), we thought UBS analysis of the impacts (gains and losses) on the world's nations from sustained higher oil prices would be worthwhile. As Larry Hatheway notes, an increase of USD 10 in the price of a barrel of oil - driven by supply shocks - will shave around 0.2 to 0.3 percentage points from global growth. Every USD10 per barrel increase in the price of oil typically transfers around 0.5% of global GDP from oil consumers to oil producers. So who gains the most? (Spoiler Alert: ryhmes with usher) And is $115 the tipping point for global growth?

This week brings PMIs (US and Euro area ‘flash’) and inflation (US PCE, CPI in Germany, Spain, and Japan). Among other releases, next week in DMs includes [on Monday] PMIs in US (June P), Euro Area Composite (expect 52.8, a touch below previous) and Japan; [on Tuesday] US home prices (FHFA and S&P/Case Shiller) and Consumer Confidence (expect 83.5, same as consensus), Germany IFO; [on Wednesday] US Durable Goods Orders (expect -0.50%, at touch below consensus) and real GDP 1Q anniversary. 3rd (expect -2.0%) and Personal Consumption 1Q (expect 2.0%), and confidence indicators in Germany, France and Italy; [on Thursday] US PCE price index (expect 0.20%), Personal Income and Spending, and GS Analyst Index; and [on Friday] Reuters/U. Michigan Confidence (expect slight improvement to 82, same as consensus), GDP 1Q in France and UK (expect 0.8% and 0.9% yoy, respectively), and CPI in Germany, Italy, Spain and Japan.

One month ago we showed that when it comes to the cost of basic (and not so basic) health insurance, the US is by far the most expensive country in the world and certainly among its "wealthy-nation"peers. It would be logical then to think that as a result of this premium - the biggest in the world - the quality of the healthcare offered in the US among the best, if not the best, in the world. Unfortunately, that would be wrong and, in fact, the reality is the complete opposite: as a recent study by the Commonweath Fund, looking at how the US healthcare system compares internationally, finds, "the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last or near last on dimensions of access, efficiency, and equity." In other words: most expensive, yet worst in the developed world.

According to the latest CapGemini wealth report the number of high net worth individuals increased by nearly 1.8 million in the past year, the second biggest surge since 2000, which also happened to be the crazy days of the first tech bubble (not to be confused with the current tech bubble). In other words, the epic, unprecedented stock bubble reflated by the world's coordinated central banks, has succeeded. Succeeded, that is, if its goal was to make the world's richest people wealthy beyond their wildest dreams. As for everyone else, just over 7 billion people, better luck next time.

Well that didn't take long. Home prices are not the only thing surging in Britain as Reuters reports British spot wholesale gas prices climbed over 7% after Ukraine and Russia failed to agree on the price of future gas deliveries. Britain gets around 5% of its gas from Russian sources and a mild winter and spring have prompted utilities to inject more gas into storage than usual. One analyst notes "as yet flows through Ukraine to Europe have not been disrupted but the market has become increasingly concerned that they will," and now, following the explosion in the largest gas transit pipeline in Europe, disruptions have begun.