UBS Trader Get Charges With Metals Price Fixing

  • Tax reform talks deep sixes the currencies...

  • Chinese data slips in August...

  • Bank of England meeting today.

Good day... And a Tub Thumpin' Thursday to you! And I get to do some Tub Thumpin' Today, so I've got that going for me! Hey! How about those Cleveland Indians! The won their new AL record 21st game in a row yesterday! WOW My beloved Cardinals start to act like they've been set adrift in space without a tether, when they win 3 in a row! UGH! 21 in a row, that's just incredible in my book! Heartsfield greets me this morning with their song: House Of Living...

Well, a couple of months ago, I mentioned one day that the dollar was getting sold because of the fact that the President's plans for the economy hadn't gotten off the ground. That's not so, any longer... And while it's all talk right now about tax reform, traders are taking that as a sign that we will see it go through and become a reality, and they're buying dollars by the fistful... The euro has fallen back through the 1.19 handle, and keeps going back and forth around that figure in the overnight sessions. Speaker, Paul Ryan, had this to say about tax reform... "the plan is to have a new tax system functioning next year." And when a Democrat, representative, Joe Manchin, that attended a dinner hosted by the President to discuss tax reform was asked about the meeting he called them "productive"...

OK, now I'm not the sharpest tool in the shed when it comes to figuring out what politicians mean when they talk, but that answer seemed to be a long way away from signaling any bi-partisan agreement on tax reform, but that didn't stop the dollar bugs from throwing the currencies and metals in front of the tax reform talks bus... I could spend all morning on this, but since I did that yesterday with my talk on debt, I think it best to move along, and just makes sure you realize that these talks could gain momentum, and keep the conn with the dollar... I'm thinking that they won't gain momentum, but then I always look at things differently than most people...

Well, on top of the dollar getting love from the tax reform talk, it also saw some love come in its direction from the global growth currencies, (A$, kiwi, sing $ and others) last night as China's latest prints on Factory Output and Retail Sales slumped last month...

UGH! Chinese Industrial Production gained 6% in August VS the same period last year, and 6.4% in July... The expectations were for a 6.5% gain, so even though Industrial Production was up from a year ago, the slippage VS last month was highlighted by the markets. It also happens that the 6% print was the slowest reading for China so far this year...

In addition, Chinese Retail Sales was similar to IP, in that Retails Sales grew 10.1% in August VS 2016, but fell VS the July print which was 10.4%, and the expectation was for a 10.5% print... This print too was the slowest for Retail Sales so far this year...

The Sky is Falling, The Sky is Falling, and al the Chicken Littles are running around with that "oh the humanity" look on their faces... When if they just took a step back and looked at the data for what it was, and what caused this slippage they would be able to calm down and get back to work! You see, I'm looking at these data print slowdowns as a reaction to the fact that the Chinese Gov't has been closing capacity of those companies that don't meet the environmental standards, and that enforcement has been much stricter there... And to me that's just something that the Chinese businesses will have to adjust to, and figure out how to get back to stronger prints..

The near daily, appreciations of the renminbi have taken a breather this week, and the renminbi has see markdowns at each fixing so far this week. And that leads me to believe that the Gov't was aware of the slippage in these reports... Hey! it happens here too!

So... the Swiss franc is about the only currency with a gain this morning VS the dollar... And here's the skinny on how that comes about... In Europe, the big cross is euro/ francs or francs/ euro, depending on whether you're trading in Switzerland or the rest of the Eurozone. The Swiss National Bank (SNB) while having dropped the peg to the euro a few years ago, continue to maintain a large position of euros so they can adjust the price of the franc and keep it weak to the euro for trade purposes... So, when the euro rallies, the franc gets sold on the cross, and vice versa... This cross trading carries over to the trading in dollar / franc, and thus the strength in the franc today, as the euro suffers from getting sold.

The price of Oil is the only other asset rallying VS the dollar this morning, with the price of Oil in the $49 handle once again. Most of the Oil price move came from the reduced supplies of gas that were reported yesterday, where the refineries in the Houston area have been in operable for a couple of weeks. There's plenty of Oil, just no place to get it refined into gas...

The Petrol Currencies (TPC) didn't rally alongside Oil in the past 24 hours, and that has me shaking my head as I attempt to figure out just why that happened like that? And the only thing I can find and figure out is that TPC traders just weren't convinced that the move in the price of Oil was something that would last... And can you blame them? The price of Oil has been up, down, sideways, and then rinse and repeat over and over again... But nothing to really hang your hat on and say, "this move is for real"

Well, Gold go t whacked again yesterday, as "the boys in the band" did tune up their instruments yesterday for the show that saw the early gains in Gold wiped out and more as the trading got going... Gold made it as high as $1,340.50 yesterday, before the rug was pulled out from under it, and closed down $8.90 on the day to $1,322.50...

The GATA folks sent me a note yesterday that was very interesting and had an ironic twist to it... Here's the note that GATA sent me... "A former trader at UBS Group AG was charged today with conspiracy and fraud over his suspected role in manipulating the price of precious metals. Andre Flotron, who worked at the bank in Switzerland and Stamford, Connecticut, is the second person publicly charged in the U.S. investigation into the fixing of gold, silver, platinum and palladium prices. Flotron, a Swiss citizen, was arrested while visiting his girlfriend in New Jersey. He was charged with conspiracy, wire fraud, commodities fraud, and spoofing. He faces as many as 25 years in prison on the most serious charge. "

And here's the ironic twist... are you ready for this? Well here it is anyway.. While the arraignment of Andre Flotron was happening... CPM Group Managing Director Jeffrey Christian was telling Kitco News that complaints of gold market manipulation are "nonsense."

CPM is a commodities research, consulting, financial advisory and commodities management firm providing independent research, analysis and advisory services related to commodities markets, corporate and project finance, and the financial management of exposure to commodity oriented investments...

OK, if that weren't so sad, it would be funny, and I mean funny ha-ha! But it's so sad that all this happens right under the CPM nose..

OK, move on Chuck before you find your soapbox, and just keep saying to yourself that "the boys in the band" are doing everyone a favor by keeping the price of Gold at a level where it can be bought...

The Bank of England (BOE) is meeting while I write this morning, but I doubt they'll have any market moving news for us today... But then you never really know with these Central Bankers these days?

The U.S Data Cupboard had the PPI (wholesale inflation) for us yesterday, and the August PPI didn't meet the expectations of a 0.3% increase, printing instead at 0.2% VS July.. Annualized, PPI is 2.4% or 1.9% without food and energy, which I've always said I have no idea why anyone would look at it without the two major things that consumers use every day...

Today's Data Cupboard has the stupid CPI for August... And I have no doubts that it will remain under 2% year on year (YOY)...

To recap... It was another Dollar Day yesterday, as the tax reform talk got loud, and influenced traders into thinking that this is going to become a reality, and help the U.S. economy, therefore they bought dollars... The Global growth campers got a kick in the shins yesterday when China printed two data reports that showed slippage VS July... Gold got whacked again by "the boys in the band", but the price of Oil rallied on the drop in gas supplies.

Or, here's your snippet: "History repeats itself, sometimes even within a single person's lifespan. Now an American citizen, Fischer is currently witnessing another major power taking its leave of the world stage. Under the leadership of President Donald Trump, the United States is losing its status as a global hegemonic power, he said recently.

America's role as guarantor of global organizations like the International Monetary Fund (IMF) can no longer be taken for granted, Fischer says. "I had a picture of the world economy in which the United States was an anchor," he recently told the Financial Times. "Not a source of volatility."

The U.S. political system could take the world in a very dangerous direction, says the economist, who has held a number of powerful positions in his career. He has been the chief economist of the World Bank, deputy managing director of the International Monetary Fund and governor of the Bank of Israel. His resume makes him part of the caste of "globalists" despised by Trump supporters.

Fischer is seeing things today that he has never experienced in his entire professional career. For instance, he believes the current US government's efforts to loosen regulation of the banking sector, hardly more than 10 years after the financial crisis, are simply "mind-boggling."

Chuck again... Well, like I said, above, Fischer seems to be taking his last shots where he can...

Currencies today 9/14/17... American Style: A$ .80, kiwi .7223, C$ .8212, euro 1.19, sterling 1.3206, Swiss $.9660, ... European Style: rand 13.1514, krone 7.8955, SEK 8.0104, forint 258.92, zloty 3.5987, koruna 21.9338, RUB 57.73, yen 110.41, sing 1.35, HKD 7.8116, INR 64.09, China 6.5339, peso 17.76, BRL 3.1283, Dollar Index 92.34, Oil $49.64, 10-year 2.19%, Silver 17.82, Platinum $985.35, Palladium $938.95, and Gold... $1,327.10

That's it for today... Home Alone again... I'm actually, no wait, don't say that Chuck! OK.. I'll just say, being alone isn't so bad, as long as I know it won't be forever! Cardinals have a bummer game last night and lose ground in the division race... UGH! I always say in the early spring when baseball begins that the games you win then are games you don't have to win late in the season, and this year is a prime example of that, as the Cardinals fumbled away so many games early this year, that now they HAVE to win every game... My weekly letter at the Dow Theory Letters sight will print tonight... Last week I gave everyone there who are all new readers to my stuff, a history of Chuck, and this week I did a history of currency trends... There are some very good minds and writers at the Dow Theory franchise... You should check them out! Van Morrison takes us to the finish line today with his song: And It Stoned Me... And with that it's time to go! I hope you have a Tub Thumpin' Thursday! And Be Good To Yourself!