August 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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  • $75 Billion In New Treasuries This week...

    In This Issue..

    * Currencies adrift all day yesterday...
    * Data prints begin today with Productivity...
    * Stop to think!
    * Chinese data is impressive...

    Good day... And a Terrific Tuesday to you! Well, no data yesterday left the markets drifting about the open waters. Stocks rebounded, which gave the risk assets a bias to be bought, but for the most part, the day was much like being a drift in the ocean, with no direction or cares!

    That will all change beginning today with the Nonfarm Productivity report for the 2nd QTR... Long time readers know my dislike for this data, as I believe it simply shows that one person works longer hours! The Fed Heads used to be all over this data like a cheap suit, and probably still trip over themselves to see the data when it prints... But to me, it's not what Big Al Greenspan made it out to be......
  • A Big Jobs Surprise!

    In This Issue..

    * Low yielding currencies get sold...
    * High yielding currencies remain solid...
    * Further info on the inflation indexed bonds...
    * Stealth QE...

    Good day... And a Marvelous Monday to you! A very nice, but hot weekend here... But hey! It's August, it's supposed to be hot! Friday was an awful day for most of the currencies, and there was a HUGE surprise in the Jobs Jamboree (according to the BLS, of course!)... And, at the end of updates, I've got a story for you about stealth QE, you'll not want to miss a minute of that! So... Let's go!

    Well, Friday's Jobs Jamboree was quite interesting to say the least... I had already told you about the forecasts for a HUGE drop in job losses for July from 467,000 to 325,000... But the number, according to the BLS, was 247,000!!!!!!! Way to Go Corporate America! Geez Louise, I wish it were that full of seashells and balloons! This smells of yesterday's fish folks... OK, let me get this straight... The forecast was for 325,000 job losses, and an unemployment rate of 9.6% (up from 9.5% in June)... And the jobs lost were 247,000, a difference of 78,000, and the unemployment rate fell to 9.4%... So, the BLS is telling me, and you, that 78,000 jobs not being lost, was equal to .2% (9.6 to 9.4)? Come on! I didn't just fall off the turnip truck!...
  • A Gusher Of Federal Money...

    In This Issue..

    * No currency movement to speak of...
    * Buffett calls out the deficits...
    * PIMCO does too!
    * SNB selling francs to stem gains....

    Good day... And a Wonderful Wednesday to you! Another day with the medicine in my knee and it feels better yet today... I did have to ice it last night though, I guess I'm still not out of the woods here, but I can see the exit!

    There was very little in the way of movement in the currencies yesterday. The euro moved to 1.4150, but was brought back down to the 1.41 handle overnight. Stocks rebounded yesterday, which gave a few risk takers the intestinal fortitude to dip their toes back into the risk assets water... But there just weren't enough of them to give the currencies the push they deserved to get....
  • European orders support the Euro...

    In This Issue..

    * European orders increase more than expected...
    * Was Cash for Clunkers necessary?...
    * Roubini sees a 'W' not a 'V'...
    * Lessons from Mary Poppins...

    Good day... And welcome to another week, the last one in August! The weather here in St. Louis has shifted toward fall, which is my favorite season. Chuck is flying back home from San Francisco today and will be back in the saddle tomorrow. Both he and the big boss, Frank Trotter, sent me some great Pfennig pfodder over the weekend so lets get right to it.

    The dollar continued to drift lower throughout the trading day on Friday, with the commodity currencies of Australia, South Africa, and New Zealand leading the way. Confidence is returning to the markets, and investors are once again moving out of the 'safe havens' of the Japanese yen and US dollar. The reports coming out of Jackson Hole indicate that central bankers believe chances for near-term growth appear good and recent data seem to support this conclusion....
  • Stocks push the currencies higher...

    In This Issue..

    * Stocks push the currencies higher...
    * Norway pulls out of recession...
    * Jackson Hole boondoggle...
    * Oil helps rally commodity currencies...

    Good day... We had more rain here last night, but the storms have cooled things off and it is starting to feel a bit like fall around here. Chuck flies off to San Francisco today to speak at the Money Show, so I will be bringing you the Pfennig for the next few days. The dollar has rallied just a bit overnight, clawing back some of the losses which occurred mid morning yesterday.

    And what, you might asked, caused the dollar to rally yesterday? You can re-read a bit of yesterday's Pfennig for the answer: 'The data cupboard has been emptied out and is looking to get restocked today... So the only thing besides sentiment moving the markets today will be the direction of stocks...' Yes, Chuck was right on in predicting what would drive the currency markets yesterday, as the dollar got sold off as stocks moved higher....
  • Germany & France Exit The Recession...

    In This Issue..

    * Currencies rally...
    * Eurozone growth unexpectedly stronger!
    * FOMC extends QE...
    * Norges is the first!

    Good day... And a Tub Thumpin' Thursday to you! Well... Turn-around Tuesday came 24 hours later this week! HA! Yes, the currencies came back yesterday, but not with a lot of conviction... You see... Stocks rallied, but that doesn't mean what I talked about yesterday still won't happen... Be careful there!

    The euro has received some additional love this morning, as the Eurozone's economic growth printed better than expected, albeit still negative... But... Germany and France showed growth, which I must say is very unexpected! That means that both Germany and France have exited the recession... Well, that is at least for now! For those of you keeping score at home, Eurozone GDP fell -.1%, which is far better than the -.5% that was expected... Oh! And this is for the 2nd QTR... You would have to think that data like this would be very good for the euro, and from the looks of it, that's exactly what's happening!...
  • Renminbi To Become An International Currency?

    In This Issue..

    * Currencies give back ground overnight...
    * Don't look too closely at U.S. data...
    * India posts strong GDP...
    * Lots O'-data this week!

    Good day... And a Marvelous Monday to you! A Wonderful Weekend was enjoyed by your Pfennig writer, with good friends, and Chamber of Commerce weather, on a beautiful lake! It's back to work today though. I don't understand why I didn't plan on taking today and staying an additional day at that beautiful lake! Oh well... Time to go to work!

    When I signed off on Friday morning, the currencies were enjoying a very nice rally, which remained in place the rest of the day. The Consumer Income and Spending data was very much as I describe it would be, and so there was no surprise for the markets to deal with. You may recall, that I told you that Spending would be greater than Income, as the 'Cars for Clunkers' probably had something to do with the Spending be so much stronger than the Income piece......
  • A Currency Rally Takes Shape...

    In This Issue..

    * Currencies rally overnight...
    * A$'s rally for 7th consecutive month!
    * Will the ECB be vindicated?
    * Sweden tries negative deposit rates...

    Good day... And a happy Friday to one and all! So, yesterday didn't turn out the way I thought it would go, but that's OK... I think my body is trying to tell me something, as I overslept again this morning! I'm heading out the door this morning to go 'fishing'... Should be a ton of fun, with neighbor friends this weekend...

    Well, front and center this morning, we are smack dab in the middle of a currency rally VS the dollar. It has all the makings of such, as the Japanese yen is getting sold, along with the green/peachback. The improved economic data this week, finally caught up with the dollar, as risk assets are back on the table....
  • GDP Does Not Compute, Will Robinson!

    In This Issue..

    * Currencies trade in a tight range
    * Pound Sterling, the star performer?
    * Something smells fishy...
    * Do you see trend with Gov. Reports?

    Good day... And a Wonderful Wednesday to you! We had a very tight range trading day yesterday in the currencies, which have left them trading in about the same clothes they were wearing when I signed off yesterday! We've got that to talk about, and... Another $2 Billion for the CARS program has been allocated... What a crock! OK, Chuck, slow down, you don't need to get your blood boiling this quickly, this morning!

    I'm writing from home this morning, as I have a meeting close to our old office, which means its not far from where I live, which is completely different from our current office location, which is, I'll say... Quite a distance... But, hey! I'm not complaining, just giving you the details......
  • German Investor Confidence Soars!

    In This Issue..

    * ZEW says Germany is on the mend...               
    * UK inflation remains higher than expected...         
    * Safe Haven, what safe haven?                              
    * Housing data remains soft...                                                                     

    Good day... And a Terrific Tuesday to you! Well... I received an injection of steroids into my left knee yesterday, and already today, I can tell that they are working their magic! I guess I'll have to give up my plans to try out for the Cardinals next year, now! HA! So, my knee is recovering from 3-weeks of agonizing pain and swelling... I've got that going for me!

    And the currencies seem to be recovering this morning too, from the recent go around in the ring with the risk aversion campers. The currencies (except yen), were last seen yesterday up against the rope, doing their best imitation of the rope-a-dope.

    ...
  • Making The Fed Reserve Accountable!

    In This Issue..

    * Currencies sold overnight
    * But rebound in early morning trading...
    * China throws cold water on stock values...
    * German exports rival the Big Kahuna!

    Good day... And a Terrific Tuesday to you! I returned home from San Francisco last night, and am back in the saddle today! Not the way I like to travel, where I get a day when returning home to recharge the batteries, but it is what it is... I did an interview with MarketWatch yesterday morning, talking about... Well, what else? The deficits, and diversification! My presentations in S.F. were well attended... On Saturday, my power point froze up, but I carried on in spite of the technical difficulties!

    You know... I really, heard a lot of people talking about the rumor / conspiracy story that there will be a bank holiday at the end of the month (this weekend) and the Gov't will announce major changes to the currency... Now, before anyone begins to believe that I am on board with that rumor / conspiracy story, STOP! I am NOT! I've read all the theories, and I've heard all the information regarding this, but just do not understand why this would be done... So... I just wanted to throw it out there, and let you all know where I stand on this......
  • Cash For Clunkers Is A Clunker!

    In This Issue..

    * Currencies trade in a tight range again...
    * U.S. Retail Sales are a clunker!
    * RBA's Stevens is upbeat!
    * Thoughts on Brazil...

    Good day... And a Happy Friday to one and all! The end of the week... It's been a tough week for yours truly, as I've hobble around in pain all week. But, as I recall, I promised 2 years ago that I would not complain about these things in the future... So! I carry on!

    Well... Front and center this morning... The currencies are trading near levels they were when I signed off yesterday morning. They did have a brief rally, after the U.S. Retail Sales data showed some real rot on the 'recover is here' vine... But that rally was snuffed out, as the risk aversion campers came back to the markets......
  • U. of Michigan Spoils The Party...

    In This Issue..

    * Risk Aversion comes back strong!
    * Risk assets get sold...
    * What games will be played with TIC's?
    * 40 years since Woodstock!

    Good day... And a Marvelous Monday to you! A great weekend that was filled with watching my little buddy, Alex, play football, hosting a surprise 30th birthday party for my little girl, Dawn, and a sweep of the Padres by the Cardinals! This week gets cut short with me a the helm, as I head to San Francisco on Thursday. Chris will have the conn on the Pfennig Thursday through Monday.

    Well... Who'd a thunk it? Yes, who would have thought that the U. of Michigan Consumer Confidence could turn the markets upside down and spoil the party? Well... It happened on Friday! The U. of Michigan Confidence Survey for Aug unexpectedly dropped to 63.2, from the previous month's 66 level. The real drop though was from the forecast for this month which was 69! The drop brought the index to a five-month low....
  • Another Jobs Jamboree!

    In This Issue..

    * Currencies trade in a tight range... Again!
    * Continuing Claims rise...
    * Bank of England adds to QE! UGH!
    * Swiss franc posts 5 weeks of gains...

    Good day... And a Happy Friday to one and all! I'm going to go out on a limb and say it will be a Fantastico Friday! This has been a long week for yours truly, coming off a week of relaxation, and getting right back in the saddle... But... It's Friday... YAHOO!

    OK... There are a few things to discuss this morning, but none so important as the Jobs Jamboree that will happen in a couple of hours from now. I told you yesterday that the economists surveyed believe that the jobs lost number will make a big move downward from 476,000 in June to 325,000 in July... That's a HUGE jump folks! Ty Keough responded to that note in the Pfennig yesterday by saying, "That's because there are no more jobs to cut!" Now, that's one way of looking at it... We have to hope that it's not that, but instead be a reflection of jobs being added... Come on! We can hope!...
  • The Boy Who Cried Wolf? NOT!

    In This Issue..

    * Currencies rally in early morning Wednesday
    * But see selling the rest of the day.
    * German Consumer Confidence surprises...
    * GDP to be revised downward?

    Good day... And a Tub Thumpin' Thursday to you! I get knocked down, but I get up again, you're never gonna keep me down... Yes, a little Tub Thumpin' this morning... I'm all geeked up because I'm sneaking out to go watch Chris Carpenter pitch for the Cardinals this afternoon! A day game... YAHOO!

    OK... Enough of that! Well, another day where the currencies bumped higher early morning, but then were sold the rest of the day. I know the currency guys (and gals) are all wonder where do they go from here... Which is the way that's clear? Well... Short term currency forecasts are proven to be wrong, most of the time... Long term? Well, that can't be argued... The deficit spending, the money creation, and the monetizing of debt will all come back to haunt the dollar... And as Aaron said yesterday, "we've only just begun"... (he was telling a joke), it holds true for the U.S. deficit spending picture......

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