October 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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  • Will History Repeat Itself?

    In This Issue..

    * Non-dollar currencies rally...
    * A$'s and C$'s to parity?
    * Reaching 40% of expenditures...
    * Gold & Oil on the rise once again...


    Good day... And a Terrific Tuesday to you! A long day on the desk for me yesterday, left me draggin' the line... But I'm rested and refreshed again this morning, so let's get to the Pfennig for today! The Finance Ministers of the Eurozone met yesterday, as I told you, and they've tried to stem the euro's rise... But, they'll need more than words to get the job done! And so, we begin a new day...

    Front and Center this morning, the currencies, which had given back ground overnight to the dollar, are back in rally mode, and are taking liberties with the dollar once more. For most of the night that was not the case, though. The dollar had rallied back and sent the euro, for instance, to the 1.48 handle, after the single unit spent yesterday at 1.49 and change... There seemed to be a move to the dollar, but that didn't last long, and the currencies are once again rallying VS the dollar this morning, and the euro has pushed to 1.4970 as I write......
  • China Grows at +8.9%!

    In This Issue..

    * Currency rally is reversed overnight!
    * Pay Czar dreams...
    * Brazil may reverse capital inflow tax...
    * An Asian Union?

    Good day... And a Thunderin' Thursday to you! It's raining outside, so... It must be a Thursday! Amazing how many Thursdays have seen rain this fall! The ground isn't the only thing that's getting watered down this morning...

    Front and Center this morning, the euro traded well past 1.50 yesterday afternoon, and drug all the other non-dollar currencies higher as the day went on. But overnight, all that giddiness with seeing the euro over 1.50 for the first time since August of 2008 (and then it was on the way down, instead of this time on the way up!), has been watered down......
  • A Jobs Jamboree for Friday 10/02/2009!

    In This Issue..

    * The dollar remains well bid...
    * G-7 to hand currencies off to G-20?
    * Car Sales collapse...
    * Auditing the Lehman cash movements...

    Good day... And a Happy Friday to one and all! Yesterday, I welcomed you to October. I had been prepared to tell you about a famous radio station here in St. Louis, that has long called October... Rocktober... But forgot, as usual! But anyway... It's the first Fantastico Friday of Rocktober!

    Today is a Jobs Jamboree Friday too! And... I'm not getting a good feeling about today's labor report at the Jobs Jamboree. The forecast is for jobs losses to fall from -216,000 to -175,000, but the unemployment rate to tick up to 9.8% from 9.7%... I got the feeling, baby, baby, I got the feeling... Oops, a little James Brown on Fantastico Friday never hurts! But what I was saying was I'm getting the feeling that there are risks to this forecast... And that the job losses could come in higher, which would really be a BAD thing for the recovery flag wavers and risk takers, I'm sorry to say...

    ...
  • Jobless recovery?? Not going to happen....

    In This Issue..

    * Leading indicators up, but employment down...
    * 11 million new jobs in China...
    * Pound sterling gets pounded...
    * A Great Day for EverBank...

    Good day...and happy Friday! It has been a fairly busy week here at EverBank, with the issuance of another big BRIC MarketSafe CD, the maturity of another MarketSafe, and a big acquisition (more on that later). While things were a bit crazy at EverBank, the currency markets were fairly uneventful. The dollar started the day off with a move up after a positive report on US leading indicators, but it gave back most of the gains as the trading day wore on. At the end of the day, only one currency moved more than 1% vs. the greenback, with the pound sterling dropping almost 1.5%.

    ...
  • Central Banks Diversify Out Of The Dollar!

    In This Issue..

    * Currencies rally VS the dollar...
    * Reasons why the U.S. wants a cheaper dollar...
    * Interest rate differentials...
    * Trade Deficit narrows...

    Good day... And a Marvelous Monday to you! An absolutely awful weekend for our professional sports teams, as the Cardinals, Blues, and Rams all lost! The Cardinals were swept out of the playoffs! UGH! Talk about a downer for yours truly... I sat there, at the game, with my little buddy, and beautiful bride, and saw the writing on the wall early in the game... No life from those redbirds... And so, another baseball season comes to an end here in St. Louis...

    Friday morning, after drying out from Thursday nights drenching, no wait, super soaking at Faurot Field in Columbia, I sat down to breakfast, and read the Pfennig... I noticed that Chris was on a roll about Geithner... I thought that it was a good finish to the things I said about him the previous day! Chris will have the conn on the Pfennig Tuesday through Friday this week......
  • Brazil Throws The Cat Among The Pigeons!

    In This Issue..

    * Real leads Commodity Currencies to the woodshed!
    * Niall Ferguson speaks his mind...
    * BOC leaves rates and statement unchanged...
    * Bollard gives the green light!

    Good day... And a Wonderful Wednesday to you! How many people out there know about "network neutrality"? Well, if you don't know, you're about to find out tomorrow, when it will be decided upon... I'm not going to get into it, because after you find out what it is you'll know why I didn't explain... All I'll say is that this is just another thing that's flying below the radar that's about to be thrown in our laps...

    OK... Well... Yesterday, after signing off and hitting the 'send button' for the Pfennig, I saw a story that shot across the desk, and then a follow up was sent to me by Don Ries later in the morning. The story was about the Brazilian Gov't imposing a 2% tax on capital inflows... This was done in an attempt to slow down the Brazilian economy by slowing down the "hot money" that's going into the Brazilian stock market by foreigners... Talk about throwing a cat among the pigeons!...
  • 3rd QTR GDP Is Strong!

    In This Issue..

    * Dollar gets sold after GDP report
    * High yielders get bought!
    * German Retail Sales decline...
    * Real has wild swings!

    Good day... And a Happy Friday to one and all! I can't believe how hard it rained here yesterday... Unbelievable! And me, with my cane, and not able to run, was stuck in it going from the car... Absolutely soaked! If I were a kid, I would have thought that to be fun! But, I'm not... It's still raining this morning too! UGH! Let's hope it stops in time for the Trick-or-Treaters!

    OK... Well the rain fell on the dollar's parade yesterday too! And, just like I thought it would do... The dollar got sold like funnel cakes at a state fair, once the U.S. 3rd QTR GDP report printed... The dollar rally was stopped in its tracks, which meant that the "trading theme" that rewards the dollar when things look bad in the U.S. and punishes it when things look good, which is completely opposite of what it should do fundamental wise, was still in place!...
  • 3rd QTR GDP To Lift Our Spirits?

    In This Issue..

    * Currencies rebound a bit VS the dollar..
    * Bill Gross on the dollar...
    * Norway raises rates!
    * RBNZ lifts easing bias!

    Good day... And a Thunderin' Thursday to you once again! It's not raining at the moment, but rain is forecast for today, thus the Thunderin' Thursday name! Rain today, tomorrow and who knows when it will stop... I'm thinking of buying the blueprints to build an Ark!

    Front and Center this morning, we have the non-dollar currencies showing some healing as stock futures are positive. What's driving this new found positive feeling in the risk assets? Well, it's all about the first reading of 3rd QTR GDP today, which... Is expected to show that the U.S. economy came out of the recession in the quarter. Of course, I'll be looking for the Gov't spending portion of the GDP, but other media outlets won't, and the markets will get back to looking for higher yields, which you can not get in the U.S.!

    ...
  • Dollar continues to fall...

    In This Issue..

    * Dollar moves lower...
    * China to take a role at IMF...
    * US Borrow and spend policies continue...
    * Gold sets a new record...

    Good day...and what a day it was in the currency markets on Tuesday! The rout on the dollar continued, and was broad based with gains in every currency we trade. The commodity based currencies led the pack, as the weaker dollar fueled a big run up in raw material prices. Reports out of both Asia and Europe signaled the global economy is recovering, and bolstered investors looking for a way out of the falling dollar.

    European industrial output rose for a fourth month in August, increasing just below 1 percent from July. From a year earlier, August output fell 15.4%, a big drop but still the smallest YOY decline in 8 months. The Euro area continues to recover 'at a gradual pace' according to ECB President Trichet. The positive news coming from the manufacturing sector is a good sign the European economic recovery will be sustainable....
  • A Loss Of Confidence In the U.S.?

    In This Issue..

    * Non-dollar currencies rally...
    * Euros and Aussie dollars lead the pack...
    * $1.42 Trillion Deficit for 2009!
    * TIC's data gets ignored again!

    Good day... And a Marvelous Monday to you! Another 'lost' weekend for our college and professional football teams! UGH! The sun finally came out this weekend. YAHOO! It felt so good to be in the sun again... The TICs data was something that needed to be dealt with on Friday, but once again the markets ignored it... I'm telling you, this smells like, walks like, and talks like a gag order... OK... Let's get going this Marvelous Monday!

    The non-dollar currencies all drifted on Friday, with the dollar seeing a bit of buying... But that's all been thrown to the curb this morning, as the non-dollar currencies, for the most part, are in rally mode VS the dollar.

    ...
  • RBA's Stevens Turns On The Green Light!

    In This Issue..

    * The dollar bounces back a bit...
    * Euro retreats from highs...
    * Is the economic recovery for real?
    * Ignored data...

    Good day... And a Happy Friday to one and all! I believe it will be a Fantastico Friday as well, because when I go in my car this morning to come to work, the radio was playing, 'It's a Beautiful Morning'... It had to be a sign, right? I certainly hope so any way!

    Well, I'm back! I have to say that I've never been to the mountains of North Georgia before, and they are beautiful... Well, most of the parts of this great country are, when I come to think of it! Well, it was nice to walk in the door yesterday and sit down, close my eyes, and get work off my brain!...
  • Gold Soars To Another All-Time High!

    In This Issue..

    * $1,055 for Gold!
    * Global recovery prospects fuel run on the dollar...
    * Trichet to defend the dollar today?
    * Central Banks are diversifying...

    Good day... And a Thunderin' Thursday to you! It's raining here in St. Louis, so, it must be Thursday! It's a big night for yours truly, but I'll talk about that at the end... We've got some big moves going on in the currencies and metals, so we had better get to it, and save the chit-chat for later, eh? But first, today is the funding deadline on our latest BRIC MarketSafe CD... We'll have one more in November and then that's it!

    OK, front and center this morning, Gold has soared to another all-time high! When I turned on the screen this morning, Gold was flashing a great big $1,055 figure... WOW! But wait! OK, now that sounded like an infomercial... But wait! If you act now, you can get double the Ginsu knives! HA! OK, getting back to the original, but wait... Gold and Silver for that matter, aren't the only risk assets moving higher this morning... All 16 of the countries that are deemed to be the biggest U.S. trading partners, have currencies that are taking liberties VS the dollar this morning......
  • Dow hits 10,000 and the dollar is down...

    In This Issue..

    * Dow hits 10,000 and the dollar is down...
    * Return of the carry trade?...
    * Global Power Shift Index...
    * Goldman predicts a further fall for the dollar...

    Good day... It is a Thunderin Thursday here as the rain continues for another day. We have had a very wet two weeks here in the midwest, but the cold rain is finally supposed to stop later today. The currencies continued to their thunderin stampede over the US$ yesterday with several reaching fresh highs. The Dow Jones average moved above 10,000 again, so everything must be alright in the world economy now, right?? This morning the dollar bounced back up, but it looks like profit taking and not a more permanent trend. Lots to talk about today, so I'll get right to it....
  • Consumer Confidence Drops!

    In This Issue..

    * The dollar continues to hammer!
    * Jim Rogers on the dollar rally...
    * C. Fred Bergsten talks of a dollar alternative...
    * Lord Monckton's thoughts...

    Good day... And a Wonderful Wednesday to you! It's still raining here... Quite frankly, I don't know how people that live in rainy areas do it! I don't mind rainy days, as long as they are sprinkled in with the days of sunshine!

    Well... The dollar rally that began for a number of rumored reasons continued on yesterday... Remember when I said on Monday that the data this week should show us that the economy is healing somewhat, which would be bad for the dollar? Well, that thought got cold water thrown on it yesterday when Consumer Confidence surprisingly declined last month...

    You know how I like to question just what people that were surveyed for this Consumer Confidence report are so confident about? Well, apparently, the Conference Board surveyed the wrong people this month! Consumer confidence in the U.S. declined in October to 47.7 versus expectations of a 53.5 reading. Both consumers' perceptions of current conditions and their expectations for the future declined. Hmmm......
  • G-7 To Discuss Currencies?

    In This Issue..

    * The ball is in the dollar's court today...
    * Aussie is unable to hold 14-month high...
    * China and Eurozone print stronger PMI's
    * Chock-full-o-data today...

    Good day... Welcome to October! And a Tub Thumpin' Thursday to you! No real reason to get Tub Thumpin', but I thought why not? The non-dollar currencies have given back their gains made yesterday to the dollar, in a game of what seems to be, give and take... A tennis match with the dollar, one day the ball is in the dollar's court, and the next day it's not! Really, kind of giving me a rash, watching this... I want some direction here!

    So... When I turned on all my screens this morning, and then waited about 20 minutes for the new programs to be installed on them that the IT people left for the next time the computer started up... Hmmm, where was I? Oh! I was talking about when I first saw the currencies this morning... I saw that the euro had fallen back to 1.4560... And of course wanted to find out why...

    ...

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