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INTRA-DAY NEWSLETTER ~ Sept 16 2014
The Deflationary hits just keep on coming……………
Producer Price Increase Lowest In 2014 As Energy Slides
Submitted by Tyler Durden on 09/16/2014 - 08:43
PPI Final Demand was unchanged in August (+0.0% against expectations of +0.0%) making it lowest monthly gain since December 2013 (after revisions moved May's data). Across the board producer prices rose (or didn't) as expected with Final Demand YoY +1.8%. Energy prices fell 1.5% MoM and was the biggest driver of PPI's relative weakness but notably prices for finished goods fell 0.3% - the biggest drop since August 2013.
PS -- Remember what they said Russian sanctions would do to Energy costs? We are at the lows of 2014.
 
China Stocks Tumble Most In Six Months; US Futures Lower As Key Risk Events Loom
Submitted by Tyler Durden on 09/16/2014 - 07:10
If over the weekend we got some terrible economic news out of China, then overnight it was turn for a major disappointment in capital flows, when Chinese Foreign Direct Investment in August crashed by 14%, far below the 0.8% increase expected, attracting just $7.2 billion in FDI, and the lowest in four years. This once again sparked fears of a Chinese hard landing and sent the Shanghai Composite tumbling 1.82%, the biggest drop in six months. In addition to China, there was the German ZEW Survey, which while beating expectations of a 5.0 print, dropped from 8.6 to 6.9 in August, the lowest since 2012. In fact, the gauge has decreased every month since December when it reached a seven-year high. And while there is not much other news today ahead of the blitz assault of data later in the week, including the Fed tomorrow, the TLTRO announcement on Thursday and the Scottish referendum results and the BABA IPO on Friday, we are stunned futures aren't as usual, soaring.
China’s Demographic’s
Submitted by Tyler Durden on 09/15/2014 - 21:38
UPDATE: It appears the exodus is beginning - China FDI -14% YoY (vs +0.8% exp.)
As China's shift to a consumer economy progresses based on the urbanization of its agrarian 'poor' population, an odd thing is happening at the other end of the demographic wealth spectrum. As WSJ reports, nearly half of wealthy Chinese are planning to move to another country within the next five years, according to a new Barclays survey. The top reasons 47% of these individuals - with net worths over $1.5 billion - cite for fleeing China include educational and employment opportunities, economic security, and climate. Ironically, none mentioned 'running away from potential prosecution for graft'.
Asia-Pac Stocks Head For Worst Losing Streak In 12 Years
Submitted by Tyler Durden on 09/15/2014 - 21:26
Japan's broad TOPIX index is lower this evening after the holiday weekend - following a six-day rise - led by Real Estate, Mining, and Banking sectors as traders suggest "the mood is to hold back ahead of the Fed meeting." China's dismal data and comments about no imminent rate cut have done nothing to tamp down enthusiasm for Shanghai Composite stocks as the Chinese government "unveiled guidelines to support the development of the stock market, pledging to make blue chips bigger and stronger and more actively traded," though HKSE is delayed for now due to Typhoon warnings. MSCI Asia-Pac is down at the open for the 9th day in a row - the longest losing streak since 2002.
Scotland Prepares For Bank Runs; 'Quietly' Sends Millions Of Banknotes North
Submitted by Tyler Durden on 09/16/2014 - 08:57
As the Scotish independence vote draws near and remains too close to call, some analysts are suggesting Plan B for Scotland may be to choose to opportunistically default. This has done nothing to calm concerns of the aftermath of a "yes" vote - despite US asset managers proclaiming it irrelevant. Nowhere is that more clear than, as The Independent reports, Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the event of a Yes vote in Thursday's independence referendum, it has emerged. Bankers stressed there has been no sign yet of any increase in the amount of withdrawals from deposit accounts or ATMs, but the moves have been taking place over the past week or so in order to make sure ATMs do not run out on Friday in the event of a panic reaction to a “yes” vote.
The Ebola Epidemic Silver-Lining: IMF Bailouts For Everyone
Submitted by Tyler Durden on 09/15/2014 - 21:04
Never waste a good crisis. While we already knew a major reason for The West chasing into Africa was to leverage its relatively low credit levels as the last bastion of Keynesian-stimulus-hope in the world (estimated at between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral). And so it is little surprise that, as The WSJ reports, The International Monetary Fund on Thursday warned the West African Ebola epidemic requires a "large scale" global intervention to control a crisis that is ravaging economies in the region. All three major Ebola-suffering countries were already in bailout programs ($200mm loan in 2012 for Guinea, $100mm loan for Sierra Leone, and $80mm credit facility for Liberia) but with the "world community taking forever to respond," The IMF is happy to step in and secure some assets / lend over $100mm more to each nation to fill financing gaps.
Obama To Send 3,000 Ebola-Fighting Boots-On-The-Ground To Africa; CDC Warns America "Now Is The Time To Prepare"
Submitted by Tyler Durden on 09/16/2014 - 08:24
On the heels of yesterday's almost unbelievable forecasts of the exponential rise in Ebola case counts - and warnings of a 20% chance of Ebola reaching the USA by year-end, WHO officials have confirmed that their previous forecasts of 20,000 cases "does not seem like a lot today." This has, according to Reuters, the United States announced on Tuesday that it would send 3,000 troops to help tackle the Ebola outbreak as part of a ramped-up response including a major deployment in Liberia, the country where the epidemic is spiralling fastest out of control. Perhaps even more worrisome - for those who explained how 'contained' Ebola was - is the CDC's release of an Ebola checklist warning American healthcare workers "now is the time to prepare."
NOTE: All above articles from www.zerohedge.com
Gold Chart
So far gold’s bounce on Monday was not able to overcome the 1st important channel line in the downtrend. Resistance is 1238-1243 for the remainder of the day. Support is the 1222-1227 area. All trends remain down at the moment.
Cycles
When it comes to cycles, odds favor that gold is going to make an important low between this week at the week of October 6th. There are a few key areas to watch. First off is the 1218-1225 area where we hit on Sunday night (1225.60 spot). The 2nd is that dual channel line at 1195-1205 and finally the 1155-1172 area (and up to 1180).
It is possible that the low of Monday will hold but there is so much deflationary trends at the moment that a plunge to washout gold can’t be eliminated at the moment. Once the FOMC is out of the way and the Scotland vote on Friday, then a trend change to markets is expected. If Scotland votes yes, the gold trend could turn up as this is shaping up to be a major event in the cycles of war and civil unrest that is coming.
Silver
The downtrend in silver since February remains in place. Support is the 18.10-18.25 area and resistance is 19.00-19.33. That’s the short term points to watch.
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