July 2008 - Daily Pfennig

A free, quick-reading daily e-letter on world currencies, economic trends, and the occasional baseball score.

Daily Pfennig

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • Profit Taking Dominates The Day...

    * Dollar faces Dynamic Duo this week... * RBA leaves rates unchanged... * Comparing decades... * Tankan is somewhat positive... ** Profit Taking Dominates The Day... Good day... And a Terrific Tuesday to you! In keeping with Pfennig tradition, I begin each July with words from one of my fave bands of the 70's, Uriah Heep... There I was on a July morning... (I could go on, but you get the point.) Well, the profit taking that I talked about yesterday morning, continued for most of the morning yesterday, causing the euro to fall from the 1.5810 level I saw when I turned on the screens, to the low 1.57 area. It had to be profit taking because why would anyone buy dollars VS euros as a long time investment, with the dynamic duo of the Jobs Jamboree and an ECB rate decision staring the dollar bulls right in the face this week......
  • What's Up With The Loonie?

    * Euro trading pattern... * Sterling backs off... * Data cupboard gets restocked... * Rupees disappoint... **What's Up With The Loonie? Good day... And a Wonderful Wednesday to you! I hit all my traffic lights on green this morning, so it's going to be a "good day"! Funny how little things like that put a smile on my face... OK... Another day of watching the euro rise up to 1.5815 and then see it get sold back below the 1.58 figure when the NY boys arrive at their desks. The pattern for the first two days this week has seen that selling in the morning, and then a slow rise in the afternoon, and then back over 1.58 in the overnight markets. That's where we are again this morning......
  • Beware The Thin Markets...

    * ADP prints a huge downside surprise! * Euros get past 1.58... * A Perfect Storm? * Gold continues its move higher! ** Beware The Thin Markets... Good day... And a Happy pseudo-Friday to one and all! It is actually Thursday of course, but it's our Friday, as tomorrow is the 4th of July holiday here in the U.S. I think a lot about the Declaration of Independence these days, as I feel there is a faction of people here in the U.S. that would like to tear up the constitution... So, as we come to the day we celebrate the signing of the Declaration of Independence let's stop and remember that it's WE THE PEOPLE that make a difference in this country, certainly not anything that comes out of Washington D.C.! OK, I'm down from my soapbox... This could really be a Tub Thumpin' Thursday as it has the potential to really kick some rear and take names later. Here's what I'm talking about......
  • Trichet "Gets The Memo"

    * ECB raises interest rates... * More jobs losses in June! * An embarrassment for the Fed... * Buying opportunities? ** Trichet "Gets The Memo" Good day... And a Marvelous Monday to you! What a fabuloso 3-day Holiday weekend! WOW! The weather was great, I relaxed max time, and shot off some fireworks just to keep the tradition going... The weekend was working hard to make me forget the happenings of Thursday... The Perfect Storm that was possible for the dollar turned out to see the tables turned and it was the euro that went into a tailspin on Thursday... Here's the skinny......
  • Where There's Smoke...

    * Fed Head Yellen comes clean! * $75 Billion in Capital needed? * Another risk even? * Higher inflation for Brazil... ** Where There's Smoke... Good day... And a Terrific Tuesday to you! I'm writing from home today as I have to deal with a catalytic converter this morning before heading into work. Writing from home is always a challenge in that I don't have my trading screens going with news scrolling continuously... But... I carry on despite my challenges! The euro recovered a bit yesterday after last Thursday's tailspin... And the recovery was smack dab in the face of some weak economic news from Germany! Here's what got the euro going and moving up once again yesterday......
  • Fighting Deflation Instead of Inflation?

    * A bounce in the euro overnight... * Iran tests long range missiles... * Japan's Machine Orders soar! * Is Big Ben giving us a hint? ** Fighting Deflation Instead of Inflation? Good day... And a Wonderful Wednesday to you! Things settled down a bit yesterday, with the rumors of bailout for Fannie and Freddie Macs fading, and some awful Housing data being swept under the rug. The dollar gained back the ground it had lost to the euro the previous day, and Japan printed a very strong Machine Orders report... And now Iran tests long range missiles... All that and more as we begin our Wednesday... OK, front and center this morning... The Housing data from yesterday. Since the media decided to sweep this under the rug, I thought I would make certain that at least Pfennig Readers were aware of the rot on the Housing vine. The index of Pending Home resales fell -4.7% in April, a much larger decline than the "experts" forecast. I think what you're seeing here is simply that would be buyers are holding off as they expect further declines in prices.....
  • Aussie Job Creation Soars!

    * A$ goes to 96-cents! * Foreclosures at 53% * Loonies rise? * A new way to bail out? ** Aussie Job Creation Soars! Good day... And a Tub Thumpin' Thursday to you! I just realized yesterday that July was slip-slidin' away from me just like June did, and I had better get to work on my two presentations for the Vancouver Show coming up in two weeks... I've talked about this Conference for months now, but in case you missed the info... Here is the link... http://www.isecureonline.com/Reports/400SCONF/E400J307/ OK... The currencies, for the most part, remain in a trading range that's tight... The euro pops up to 1.5750, and then falls back to 1.5665, and with the euro in a trading range the other currencies are experiencing the same treatment... That is, except for... Drum roll please... The Aussie dollar!...
  • Are Freddie and Fannie Insolvent?

    * Poole slams Freddie and Fannie... * The dollar gets sold again... * Bad data for the dollar today... * Renminbi matches '07 performance! ** Are Freddie and Fannie Insolvent? Good day... And a Happy Friday to one and all! A Fabulous Friday indeed! The euro broke out of that tight trading range yesterday, we had a distorted Weekly Jobless Claims number, and the un-dynamic duo of Ben and Hank got taken to the woodshed by Ron Paul... All this and more as we head into the 2nd Friday of July! OK... First on this Fabulous Friday, I forgot to talk about ex-St. Louis Fed President William Poole's comments about Freddie and Fannie yesterday... These comments were responsible for bringing the mortgage meltdown front and center to the markets once again... So... What did Poole say? Well... Poole flatly stated that, "Freddie and Fannie Mae are insolvent"... Uh-Oh! As I thought earlier this week that this meltdown of Freddie and Fannie Mae could be the risk event I've been talking about... Well... If Poole is correct... We're here......
  • Another Perfect Storm Averted!

    * Paulson calms fears... For now! * The dollar gets sold again... * More risk events... * Bill Gross wants dollars! ** Another Perfect Storm Averted! Good day... And a Marvelous Monday to you! Well... One of St. Louis' landmarks was sold this morning... One of my fave companies for a number of reasons, Anheuser Busch, was sold to InBev this morning... Just another in the line of Corporate Headquarters that will no longer reside in St. Louis... At one in the 80's, St. Louis was the 5th largest city, with Corporate Headquarters, in Western Hemisphere... I doubt we even are on the list these days... OK... Well... Friday was chock full-o-fun, and not fun for some, as U.S. Treasury Secretary, Paulson, tried to calm the markets regarding Freddie and Fannie... That may have some soothing effect in the short run, but if home prices keep falling, and mortgage backed bonds keep losing value, this problem will return to the markets......
  • Credit Woes Sink The Dollar!

    * No Bailout for Freddie and Fannie... * The euro reaches a new record high! * More risk today... * Aussie hits 25-year high! ** Credit Woes Sink The Dollar! Good day... And a Tip Top Tuesday to you! I thought I would change it up there today... Well... Overnight, we've seen the euro reach a new record high VS the dollar, only to give some of that ground gained back on some weak German data. There was more news yesterday regarding the Freddie and Fannie saga, but I've grown tired of that talk, we dance now! Seriously, though, I have grown tired of all that Freddie and Fannie talk, that I'm going to go through an exercise explaining what GSE's are and then go on with life... So... The euro reached a new record high overnight of 1.6038! WOW! This was reached based on the fears that credit problems in the U.S. are going to put the kyboshes on what little economic growth we now have. But the shine on the euro was rubbed out by a very weak ZEW... German Investor Confidence as measured by the think tank, ZEW, fell to a record low this month on the surging inflation problems, and rising interest rates. So for now, the euro is back below 1.60, but hear me now and listen to me later... This ZEW will soon be in the rear view mirror, and the euro won't have that albatross around its neck as it revisits its overnight high....
  • Oil Price Slides!

    * Big Ben in a predicament! * The euro retreats after new high... * Retail Sales disappoint! * Yen and francs on the menus again! ** Oil Price Slides! Good day... And a Wonderful Wednesday to you! 3 straight days without rain here in St. Louis! WOW! It did however, rain on the currencies' parade yesterday. About mid-morning, the brakes were applied to the run on the dollar, and the car was put into reverse. Retail Sales disappointed, and PPI is not anything to laugh about... All that and more, as we head into the day after a 15-inning All-Star Game! Front and Center though is the good cop, bad cop thing that played out with Fed Chairman Ben Bernanke (bad cop) and SEC Chairman Cox (good cop)... Big Ben sent the dollar packing in the morning with his statement that highlighted the Fed's predicament... Big Ben noted the parts of financial markets remained seriously disrupted (which screams, no rate hike), but that dollar weakness had helped cause inflation to rise (Here he goes again trying to blame everyone else for the Fed's creation and feeding of inflation... Oh well, this statement screams, no rate cut!). The currencies all took turns taking a swing at the piñata (dollar)... And... It looked like the volcano was about to blow... Oh, I don't know, I don't know, I don't know where I'm a going to go when the volcano blows! (Ahhh, a little Jimmy Buffett on a Wonderful Wednesday!)...
  • Bunning Throws A High Hard One!

    * The dollar has a mini-rally... * TIC's data... Very scary! * Sov. Wealth Funds dropping the dollar? * Inflation or deflation? ** Bunning Throws A High Hard One! Good day... And a Tub Thumpin' Thursday to you! The dollar rallied most of yesterday, but has backed off in the morning markets ahead of the Housing Starts data in the U.S. that will print later this morning. I've got some words to Big Ben from Senator Jim Bunning for you this morning, along with some more discussion on whether our bullet is inflation or deflation... All this and more, as we get to Tub Thumpin' on this Thundering Thursday! Well... As I mention above, the dollar was the belle of the ball yesterday, as the U.S. Financials recovered, thus giving those dollar / U.S. assets bulls a reason to believe... Someone like you makes it hard to.. No wait, that's Rod, not the reason these dolts bought dollar assets! The euro fell all the way to 1.58 and looked as though it would trade with at 1.57 handle, this just one day after trading above 1.60! What the heck was going on here? Ahhh, grasshopper, sit down, and listen......
  • Losses Keep Piling On!

    * Range bound currencies... * Stocks rebound... * So, you think Oil is expensive? * Gold prices back off... ** Losses Keep Piling On! Good day... And a Happy Friday to one and all! I'm running late today, was up most of the night with stomach problems, and overslept this morning. This is my last day on my 4-weeks treatment, so maybe by this time next week, I'll be able to feel normal again. But, it's a Friday! And... I'll be gone the next 3-weeks! First to Vancouver, where I'll still write the Pfennig each day, but then on vacation, and on to San Francisco... I'll be back in the saddle on August 11th... Well... We had a range bound day in the currencies yesterday, with a bias to buy dollars, as the markets breathed a sigh of relief at JP Morgan's 2nd QTR earnings... JP Morgan beat the estimates, but the thing I don't get is why there was dancing in the streets when those earnings were 53% below those a year ago. So, good for them for beating the estimates, but 53% below last year, I would certainly think it would have raised a few eyebrows... In fact, JP Morgan head man, Jamie Dimon said, "Our expectation is for the economic environment to continue to be weak -- and to likely get weaker -- and for the capital markets to remain under stress. We remain conscious that since substantial risks still remain on our balance sheet, these factors will likely affect our business for the remainder of the year or longer."...
  • Taking On Risk Again!

    * Mexico's rate goes higher! * A 100 Billion dollar note? * Euro rates to go higher? * Oil's sell off might be short-lived... ** Taking On Risk Again! Good day... And a Marvelous Monday to you! All my bags are packed, I'm ready to go, the taxi's waiting, he's blowing his horn... Yes, I'm off to Vancouver this morning... This becomes a labor of love for me especially today, with Chris taking off the same week I'm in Vancouver, I'm writing the Pfennig on my way to the airport! Graham Nash wrote a song about that... But I won't go there after the intro! Oh, what the heck! Just a song before I go... This will be short-n-sweet this morning, as I've got to get to the airport! Friday, saw the currencies range bound once again, as the data cupboard was empty. And... We didn't have any major losses print, or we didn't have any news at all about all the rot on the U.S. economy's vine. The Biggest mover was... Drum roll please... The Mexican peso! Yes, the Mexican peso outperformed all other currencies last week, reaching a 5-year high VS the dollar after the Mexican Central Bank raised interest rates 1/4% (25 BPS) to 8%, pushing the peso to its highest level VS the dollar since 2003!...
  • More Losses!

    * Currency rally runs into profit taking... * Mortgage related losses continue to mount... * Taking risk... Just seems stupid right now... * Canadian Retail Sales post a gain... ** More Losses! Good day... And a Terrific Tuesday to you! It was a long day of travel for yours truly, who saw two gate changes and two plane changes along with 1.5 hours of delay... I ran into a reader on the plane, that said, Hey! Aren't you Chuck Butler? I could see all the people sitting around me thinking that they should know Chuck Butler, he must be a celebrity! HA! Little did they know, it's just little Ole me, the Pfennig writer! Well... The currencies had a good day VS the dollar, as the euro was able to gain well into the 1.59 handle... Part of my presentation to the main stage crowd tomorrow (900+) is going to ask the question... Where are all those people that claimed the weak dollar trend was over last month when the Fed stated they were going to be inflation fighters? They are no-where to be found! That's where! I recall that even a big name guy at the Royal Bank of Canada, flatly stated the weak dollar trend was over... Where have all the naysayers gone? Long time passing......

1 2 Next >