Sideways/higher week with significant fund churning with long and short funds adding small… But Short swap dealers covered aggressively from multiple cohorts… including Producers and other swap dealers…suggesting market-making duties are secondary to market taking needs
Short swap dealers act like they are closing shop with no options changes…. increasingly behaving as agency and not principal in both their future and (most obviously) their options daily activity; likely passing through risk (back to backing) to Producers other clients and possibly supranational entities …
Open interest bottoming higher…signalling increased patience, and deeper pockets, and longer term perspectives of longs…chart Goldfix Founder RBlava
More at bottom.
News:
ZeroHedge Premium: Goldman's Commodity Desk Thinks Silver Is About To Soar
Goldman's Derivatives Sales Trading desk writes in its latest weekly note, there has been a "huge influx of interest in precious metal and miners ETFs this week." and the bank's desk thinks "SLV upside is one of the best trades on the board"- Source
Why this matters and how to implement according to the bank at bottom
Equity Recap:
US equities rallied on Friday ahead of the Fed's rate decision this week. Large caps lagged small caps: S&P 500 (+0.54%) vs. Russell 2000 (+2.49%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) rose 0.47% and 0.23% respectively.
Market News:
"Federal Reserve officials head into their policy meeting Tuesday closer to their goal of low inflation, but how much they will ease back on interest rates remains an open question CNBC
"China's industrial output growth slowed to a five-month low in August, while retail sales and new home prices weakened further, bolstering the case for aggressive stimulus to shore up the economy and help it hit its annual growth target. Reuters
"A tough job just got much tougher for Boeing’s new CEO. WSJ
Politics/Geopolitics:
Sirens sounded in Avivim in the Upper Galilee to warn of rocket launches, according to Al Jazeera.
Yemen’s Houthis claimed responsibility for a missile attack on central Israel and stated that a Yemeni missile reached Israel after 20 missiles failed to intercept it. There were separate reports that Israel’s military announced sirens were set off by a missile which crossed into the country from the east and fell in an open area but caused no casualties.
Israeli PM Netanyahu said Yemen’s Houthis should know that they will exact a heavy price for every attempt to harm Israel and noted that a missile fired from Yemen most likely fragmented in mid-air, while he also said the current situation in northern Israel will not continue.
Houthis said they downed a US drone over Dhamar
Russia’s Medvedev said Russia already has formal grounds to use nuclear weapons but has so far chosen not to do so, while their patience has its limits and their response might come in non-nuclear form.
Russia’s Deputy Foreign Minister said Moscow is aware that the West decided on whether to allow Ukraine to strike deep within Russia and that Moscow should use other means since verbal warnings to the West against escalation are not working, according to TASS.
G7 Foreign Ministers condemned in the strongest terms Iran’s export and Russia’s procurement of Iranian ballistic missiles, while they called for Iran to immediately cease all support to Russia’s illegal war against Ukraine and halt such transfers of ballistic missiles, according to Reuters.
Ukrainian President Zelensky said Ukraine brought home 103 POWs from Russia in a second swap in two days and noted the incursion into Kursk helped bring about a prisoner exchange with Russia.
Ukrainian spy chief Budanov said North Korea’s artillery supplies to Russia are a major problem and have a visible battlefield impact. Budanov said that Russia has ramped up production of Iskander ballistic missiles and guided bombs, as well as commented that Russia expects to face recruitment problems in the summer of 2025.
US National Security Adviser Sullivan said long-range weapons permission is the subject of intense consultations among allies and that fighting around Ukraine’s Pokrovsk is of unique concern, while the US is preparing to present a substantial Ukraine aid package this month.
US military member was detained in Venezuela and it was also reported that two additional US citizens were detained, according to a State Department spokesperson cited by Reuters.
Russian and Chinese warships practiced missile and artillery firing in the Sea of Japan as part of Ocean-2024 drills, according to RIA.
China’s military said the transit of two German warships in the Taiwan Strait increased security risks and sent a wrong signal. China’s military also stated that Chinese troops are always on high alert and ready to counter all threats and provocations.
China’s Coast Guard said Philippine vessel 9701 withdrew from the Sabina Shoal on September 14th which ‘illegally’ stayed there for nearly five months, while it added that China took measures against the Philippine vessel in accordance with the law and the Philippines’ repeated attempts to organise supple replenishment to the vessel had all failed. However, the Philippines said it would send another vessel to immediately takeover from the vessel in the disputed Spratlys.
Some headlines via NewSquawk or DataTrek
Data on Deck:
MONDAY, SEPT 16 8:30 am Empire State manufacturing survey Sept. -4.
