May 2009 - Daily Pfennig

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

Daily Pfennig

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  • A Rare Day, Indeed!

    In This Issue..

    * Stocks, bonds and dollars get sold!
    * The U.S. to lose our AAA credit rating?
    * A return to fundamentals day 2...
    * A Corporate Feed Good story for a Friday...

    Good day... And a Happy Friday to one and all! A Fantastico Friday here in St. Louis, as we bask in the sun of a 3-game sweep by my beloved Cardinals over the Cubbies! It's also the beginning of a 3-day Holiday weekend. It's Memorial Day on Monday! Time to reflect and give thanks for those that put their lives on the line for our freedom...

    OK... Front and Center this morning the Big Dog (euro) has left the porch and is chasing the dollar down the street! I got home yesterday afternoon, rested, and then checked the currencies at the NY closing before they handed the books over to Japan, and saw that the euro had leap-frogged to the 1.39 handle! WOW! What was going on?...
  • A Currency Rally For The Ages!

    In This Issue..

    * Negative momentum towards the dollar grows...
    * Treasury yields continue to rise...
    * Fundamentals and Charts coincide!
    * Silver has best week in 22 years!

    Good day... And a Happy Friday to one and all! I'm going to make the call and say this is going to be a Fantastico Friday! The sun is supposed to come out today after a week of rain, it's Friday, it's pay-day, and... The currencies have put on a rally that's the stuff that movies are made from! And... Once again, there were signs yesterday that the break of the link to stocks was in place! Take all that, and the fact that we woke up this morning for a brand new day... And you have a Fantastico Friday!

    OK... So front and center this morning let me tell you about the currency rally that began yesterday morning... Let's look back at what I said as I was getting ready to hit the send button yesterday morning... 'So... As I get ready to head to the Big Finish, I see that the currencies, led by the Big Dog, euro, are getting off the porch once again to chase the dollar.'...
  • Maybe, Just Maybe A Break In The Link?

    In This Issue..

    * Currencies consolidate...
    * Brazil posts a surplus!
    * Dr. Marc Faber speaks...
    * High yielders rule!

    Good day... And a Wonderful Wednesday to you! A very tight trading range day was in place yesterday for the currencies... In yet another sign that maybe, just maybe, because you never know, the currencies could be breaking their link to stocks... U.S. stocks jumped 196 points yesterday, and the currencies range traded... Hmmm....

    Not that this will become a 'stock jockey journal'... Stocks jumped on the news that Consumer Confidence surged this month... Talk about looking at things through rose colored glasses! Any way, Consumer Confidence surged... Better to have blips in Confidence than to be all negative all the time I guess! I also guess the stock jockeys took what was behind door number 1 (consumer confidence) and not was what behind door number 2, which was the Case-Shiller House Price Index......
  • Spraying Round-up....

    In This Issue..

    * Industrial Production declines...
    * Stocks sell off, leading currencies down...
    * Indian election spurs a rally...
    * China stockpiles commodities...

    Good day... And a Marvelous Monday to you! Thanks to Chris for picking up the ball on the Pfennig Friday. I returned to St. Louis with a very swollen leg and foot from all that walking in Las Vegas. One of these days I'll learn, eh? Any way... A restful day with my feet up on Friday, and I was ready to go again!

    Well... As much as I dislike having to say so, because I told you this might happen... The currencies have given back some major ground VS the dollar since Friday morning. It's all tied to the fact that the euphoria going around the markets the previous week regarding stocks and the U.S. economy, came to a screeching halt last week. I pleaded and begged for the currencies to break this link to stocks, but it wouldn't / didn't happen and voila! What we have here is a failure to break the link, and now that there's a falling demand for stocks, currencies have tanked too... UGH!...
  • Game On!

    In This Issue..

    * Risk Assets soar!
    * What's behind this stock rally?
    * Charts and fundamentals...
    * Aussie Consumer Confidence drops...

    Good day... And a Wonderful Wednesday to you! A total reversal of Friday's risk assets sell off was the soup du jour for Tuesday... This is beginning to remind me of a Wayne and Garth street hockey game... Here comes a car... Game off... Game on...

    So, as I just said, Tuesday saw the currencies trade right back to the levels they enjoyed VS the dollar last Thursday, before risk assets began to sell off on Friday. These are the types of trading patterns you normally see when the assets involved are getting ready for a break out... A jail break... Tonight there's going to be a jail break!

    OK, I'm not saying that the jail break takes place tonight, I just broke out in a song from the 70's... That's all... Seriously though, I hope we're seeing a return to fundamentals....
  • OMB Makes New Deficit Forecast...

    In This Issue..

    * The BLS adds jobs...

    * Growing Deficits again...

    * Jim Rogers....

    * A Trade Surplus for Canada...

    Good day... And a Terrific Tuesday to you! Well... I'm here! Lost Wages... No I mean, Las Vegas! It's such a long flight here! UGH! And the plane was packed... Like I said about a month ago, when you take a flight, it sure doesn't seem like people have cut back on spending!

    OK... Well, the currencies took a breather VS the dollar yesterday, and basically traded right around the currency round-up levels most of the day. Overnight, things were pretty quiet too... The markets are trying to figure out which way they are going to go with the dollar... The Deficit is growing, which SHOULD be bad for the dollar, but in recent times, fundamentals get a little hazy at times. So... Let's go to the tape on the Office of Budget Management (OMB)...
  • Russian Rumors...

    In This Issue..

    * dollar rallies on N. Korea warning...
    * Emerging Markets decouple...
    * A debt upgrade for New Zealand...
    * Swiss francs rise despite SNB warnings...

    Good day... And a Thunderin' Thursday to you! Yes, the rain continues here in St. Louis, but that's normal for this time of year. But the rain brings the thunder... And so it is a Thunderin' Thursday!

    Well... The dollar came back with some vengeance yesterday pushing the Big Dog, euro, back well within the 1.38 handle, and all the other little dogs, other currencies, followed. There wasn't data to speak of yesterday to push the dollar higher, it was simply a case of fright, as safe haven flows went the dollar's way after the news of a N. Korea attack warning spread throughout the markets....
  • Carry trades unwind...

    In This Issue..

    * Carry trades unwind...
    * Euro zone GDP falls...
    * Will TIC flows be enough??
    * Aussie dollar predicted to outperform...

    Good day...Chuck handed me the Pfennig this morning, as I took an early flight home yesterday and he got back to St. Louis much later than I did. The Las Vegas Money Show went well, as Chuck packed the presentation rooms with investors looking to learn more about investing in Gold and currencies. Attendance seemed like it was down a bit, but we stayed busy at the booth with investors looking for diversification. We also got to see a number of 'old friends' who stopped by the booth to say hi. All in all it was a good three days, but as always, it is good to get home and back into the routine.

    The currency markets fell back into their established routine also, as fear drove investors out of riskier assets and back into the US$. We saw a general reversal of the carry trade, with the Japanese yen the only major currency which appreciated vs. the US$. As Chuck pointed out last week, investors feeling more confident about the global economy, dusted off their carry trades which had made them good money over the past few years. But traders are still a bit skittish, and move back out of these leveraged trades at the first sign of trouble in the global economy....
  • Currencies Bounce Back!

    In This Issue..

    * Risk Assets soar!
    * German Investor Confidence surprises!
    * High yielders kicking tail...
    * Who's afraid of the SNB?

    Good day... And a Terrific Tuesday to you! Finally! Spring has arrived and for more than one day at a time here in St. Louis! YAHOO! A very cold and wet spring for us, brought us to the middle of May before normal spring weather was upon us... Good things come to those who are patient, right?

    OK... Speaking of patience... I think that's what we'll all have to possess a lot of going forward with these currencies and stocks... Here's what I'm talking about... Yesterday morning it looked as though the recent rally in stocks was over, complete, pack up the bags, get on the bus, Gus... And with the trading theme of throwing all risk assets in the same bag and trading them alike that's been in place since last July, this would seem to be a nail in the coffin of the currency rally we've seen going on since March 1st.......
  • A Huge Rally Gets Stopped!

    In This Issue..

    * Jobs Jamboree results...
    * A double whack for Treasuries...
    * The loonie is stealth like...
    * Oil on the rise...

    Good day... And a Marvelous Monday to you! I hope you enjoyed your Mother's Day weekend. Friday was absolutely crazy in the markets. The currency screens lit up, the price of Oil was on the rise, and Treasury yields were rising, thus pushing the value of existing bonds downward. An absolutely crazy day, that scared the bejeebers out of the Chinese... So, let's go to the tape to see what's going on here...

    Front and center to talk about this morning, was the Jobs Jamboree... The mass media would have you believe that the recession has ended, and there are no longer any problems with the credit markets, and liquidity, not to mention the sorry state of financial institutions... Why? Because after the previous month's job losses were revised up from 663,000 to 699,000 (nobody cared about that!) the April figures came in at, according to the media, "just" 539,000... YAHOO! Let's have a party, according to what I kept seeing on the TV!...
  • The Dollar Rebounds...

    In This Issue..

    * Too far, too fast?
    * Currencies give back some ground...
    * Did China send a message?
    * The Mogambo and more!

    Good day... And a Terrific Tuesday to you! I hope your Memorial Day Holiday weekend was grand... We had beautiful days Friday and Saturday, but Sunday and Monday brought the monsoons! Still... I got to spend time with family and friends, and attend a Cardinals game! YAHOO!

    Well... Recall on Friday morning, I told you about how we could see wild swings because of the thinned out trading desks? Well, that's exactly what happened... The Big Dog, euro, traded well into the 1.40 level, up to 1.4050 at one point! The currencies across the board were kicking sand in the dollar's face and laugh. You may also recall that I said that Friday didn't seem like a good time to buy given the strength... And that too, has played out with the currencies giving back a good chunk of ground taken last week, in the overnight markets....
  • Opening Pandora's Box...

    In This Issue..

    * Currencies back off...
    * More problems for BOA?
    * More on China...
    * Aussie Retail Sales rebound...

    Good day... And a Wonderful Wednesday to you! I had someone last week in Bermuda ask me why I have my little sayings like Wonderful Wednesdays, and Fantastico Fridays... I told him that it had to do with my life scare of almost 2 years ago, and that I now celebrate each and every day! (well, maybe when I had pneumonia two weeks back I wasn't celebrating....)

    OK... I hope your Cinco De Mayo fun was... Well... Fun! We went out with some good friends, but was back home before bed time for yours truly... Still fun though!

    The currencies, led by the euro have run into a dollar road block... It's all about the Stress Tests this morning folks... It now appears that Bank of America (BOA) will need approx. $35 Billion, and not the measly $10 Billion rumored yesterday. That's quite a boat load of money, folks... So... All eyes are on the Stress Tests results which are expected to be released tomorrow. But this kind of rumor regarding BOA, is weighing heavily on the risk assets this morning, with a bias toward risk aversion....
  • Fundamentals Return...

    In This Issue..

    * Currencies & Gold move together!
    * Fed downgrades economic growth...
    * More on China...
    * Yen breaks the trading pattern...

    Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' here, as the warm winds of spring have finally sprung, the Cardinals have won two in a row from the rival Cubs, and I'm headed to Busch Stadium tonight! Oh! And fundamentals, as far as currencies and metals are concerned, seemed to be in place yesterday...

    That's right... The rout on the dollar was on (recall yesterday, Wayne and Garth playing street hockey... Game On!) and this time... Not only did the currencies rally VS the dollar, Gold and Silver took part in the proceedings too! It's been a long time since we've seen this happen... For the most part, whenever the currencies (minus yen) rallied, Gold would back off, and vice versa... Not yesterday! For the first time in a long time, the negativity toward the dollar was front and center BIG TIME!...
  • He Said What?

    In This Issue..

    * Foreclosures rise...
    * Green Shoots, no so green!
    * getting on a bus...
    * Losing a triple A rating?

    Good day... And a Wonderful Wednesday to you! Not wanting to start the day off with bad news... But I just saw a flash on the TV that said, 'foreclosures jumped 32% last month'... More Blood in the Streets, eh? That just happens to be the title of my presentation today... Blood in the Street: Bargain time or just a cease fire? Hey! I don't make these things up...

    OK... Another day here in Sin City... This city is packed with people, everywhere we go, it's simply amazing... There's been no sign of a recession here... Of course, if you got out of the casinos, and shows, you would see some of the greatest devastation any where in the housing market here... So.. It's not a seashells and balloons in Vegas... I guess with the economy so rotten, people are hoping to strike it rich in the casinos though... Hmmm, have they not figured out that these ginormous buildings are here to make money?...
  • A Jobs Jamboree for Friday, May 8th!

    In This Issue..

    * Stress tests finally print!
    * The Gov't wants you to 'feel good'...
    * Job losses decline on a weekly basis...
    * Happy Mother's Day!

    Good day... And a Happy Friday to one and all! Let's make it a Fantastico Friday, eh? Why not! It's the Friday to kick off Mother's Day weekend! More on that later, but first, let's talk about the Stress Tests. Personally I could just as easily forget about them, because as I've said over and over again, The Gov't wasn't going to 'spook' the markets with 'true results'... This whole "exercise" is a just another effort to make us all 'feel good'...

    OK, the rumor mill has finally been shut down, and the facts, as the Gov't would let us know them to be, are out... Let's take a gander at the results!...

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