A Jobs Jamboree Tuesday!
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In This Issue.

*  Very tight ranges for currencies & metals.    
*  Are markets afraid of the big bad wolf?.       
*  China signs currency swap agreement with UK! .            
*  Aussie inflation tonight is key .           

And, Now, Today's Pfennig For Your Thoughts!

A Jobs Jamboree Tuesday!

Good day.  And a Tom Terrific Tuesday to you! In my best Robin voice. Holy weather changes Batman! Yikes, the temperature fell through the floor last night, and it was just above freezing as I stepped outside this morning! I am NOT ready for this! I refuse to get a coat out of the closet. For if I do, that would mean Cold weather and winter is here. UGH! Hey! The NY Giants finally won a game last night, so all must be right in the world again. Hehehehehe.

Well, I turned on the screens this morning, and noticed that the overnight market participants must have been asleep at the wheel last night, for most of the currencies and metals are stuck in a very tight range. Are the traders, et.al., afraid of the big bad wolf? The big bad wolf being the Jobs Jamboree for September, which will print today.  Apparently, they are, for there was no more dollar selling, as we've seen since the current end of the debt debacle last week. There was also no dollar buying. So, apparently, the market participants are afraid of what the Jobs Jamboree report has in store for us today.

Think about that for a minute. The BLS (Bureau of Labor Statistics) has had almost 3 additional weeks to really massage, roll out, and cook these labor numbers! So, this report could be a real doozy! For those of you keeping score at home, the so-called "experts" believe the total net jobs created in September will print at 180,000. I personally don't care what the BLS says about job creation, but unfortunately, the markets do, so therefore I have to at least act like I care. I've told you for years now, that the number of jobs is not important to me, given all the hedonic adjustments that are made. I prefer to find information from the Avg. Hourly Earnings and the Avg. Weekly Hours Worked, along with the labor participation rate.

So, as I said above, the currencies and metals are trading in a very tight range overnight and through the morning session in Europe, all waiting for the Jobs Jamboree. UGH! I've got some BIG News from China. So, take that sip of coffee, and put down the bagel or doughnut, for this news would make you choke if you had something in your mouth!  Speaking of doughnuts, I could really use a cake doughnut or donut, this morning, if you get what I'm saying. In addition, I have a funny. There's a guy watching TV, and the on the TV is a newscaster, and he's says, "On the foreign exchange markets today, the dollar fell against all major currencies and the doughnut" - HA!

Ok. Among all the chatter on the desk yesterday between the Cardinals, Tigers and Rams, I came across a story that has obviously flown way under the radar screens, and almost slipped by mine! In the long line of steps that the Chinese are taking to remove the dollar standard with their own currency, they have taken another step! This past weekend, China and UK agreed to "direct conversion between renminbi / yuan and pound sterling"   So, add the UK to the list of countries that have removed the relevancy of the dollar in terms of trade. 

In addition, The Bank of England (BOE) announced that they will allow Chinese banks to set up UK wholesale branches, and China will do likewise with UK wholesale branches in China.  These things are HUGE folks! I continue to remind everyone that I've been in the forefront of everyone on calling for China to move to replace the dollar as the reserve currency of the world.   Keeping that in mind leads to this next thought.

And that brings me to the euro. Because, with the UK working out a swap agreement with China, that means Japan, and the UK are done, that leaves the euro and francs as the other two majors, other than the dollar, that have not worked out a currency swap agreement with China.  So, I expect the euro to be the next to work out a currency swap agreement with China. Talk about gaining a wide distribution for the renminbi/ yuan!  After euros, I would expect China to work out something with the U.S.  although I see the U.S. dragging their feet, for why would they want to help the challenger currency to the dollar's status as Reserve Currency, gain an even wider distribution?  But the U.S. will eventually give in to the Chinese, because. Well, the Chinese have the power of persuasion.  these are the things that happen when you get yourself into too much debt. I've been telling you all for a very long time, and no, I'm no Johnny come-lately to this calling out the debt crew. I've been here for many, many years.

Getting back to the UK and China agreement. Look, the signing of agreements with Argentina, Brazil and others were nice. the signing of the UK is HUGE! And the Eurozone would be even bigger! Start small, and keeping going bigger. That's what China's doing folks, and we're sitting here watching them, and no one in Washington D.C. is doing anything about it. The quote of the day on the Bloomberg this morning plays well here, and has always been one of my faves from Mark Twain. "Everybody talks about the weather, but no one does anything about it" 

My friend, John Mauldin, wrote this past week about the U.S. "brand".  For all you out there, that haven't been subjected to this newer exercise that Companies go through deciding on their "brand" and then maintaining their "brand", consider yourself one Lucky person! HA! "Brand" is the name, term, design, symbol, or any other feature that identifies one seller's product distinct from those other sellers. In the beginning, a brand was used to identify one person's cattle from another person's cattle.  So, now, a company's "brand" is used to identify it from another company.

So, it was interesting that John used the "brand" discussion in discussing the U.S. and what it lost during the last debt debacle and Gov't shutdown. The U.S. brand was definitely damaged, in my opinion. My friends over at the 5 Minute Forecast, printed a series of quotes from Alasdair Macleod of GoldMoney.com that plays well here. I took a snippet from the "5", so let's listen in to what Alasdair Macleod has to say regarding the U.S.'s dollar brand.

"Behind this turn of events is a weaker dollar," writes Mr. Macleod -- pointing to several developments we covered last week. "There is little doubt that as a brand the U.S. dollar has taken a beating. Not only did the U.S. suffer the indignity of airing its washing in public, not only did a ratings agency threaten to downgrade U.S. government debt, but also the Chinese, through their official news agency Xinhua, are calling for an end to dollar and U.S. supremacy. They have backed this up by freezing New York out of the internationalization of the renminbi, choosing London instead. The full implications of all this have not yet been reflected in financial commentary and will no doubt be debated in the coming weeks."

Chuck again. One would think that none of what happened last week is good for the dollar, and that the offset currencies to the dollar, euros and Gold, would be basking in the sun.

The price of Oil has fallen below $100 for the first time in 3 months. During those 3 months, we had the Syria scare, and that was what pushed the price of Oil higher. But the Syria stuff seems to be behind us now, because you and I and everyone else knows for sure that the Syrian Gov't is cooperating with the chemical weapons regulators and handing them all over!  I say that facetiously folks, because we don't know diddly squat what the Syrian Gov't is doing, it's all a "perception" game. And right now, the Syrian Gov't is perceived to be complying. And my mother taught me many moons ago, that you are what you are perceived to be.

The Oil discovery that I told you about last week in Australia, is still flying under the radar. But given the size of it, it won't go unnoticed by everyone for too much longer. Given the U.S.'s newfound independence in energy, I would have to think that within a few years, that Australia will also have energy independence, and China getting their Oil from Russia, that OPEC will be stuck holding their Oil. Not that I see too much of a drop in the price of Oil, given the cost of getting it out of the ground runs very high, and will continue to do so, given what's required to extract the Oil.

Speaking of Australia. Tonight (tomorrow for them) Australia will print their 3rd QTR CPI (consumer inflation) report and this is a big one, given the teeter totter that the Reserve Bank of Australia's (RBA) rate direction is balancing on right now.  So, here's how I view what happens on either side of the teeter totter with the report tonight. If inflation prints around 2%, that's a non-rate hike, nor rate cut level. Remember 2% is the target for the RBA. Now if we see inflation rise to 2.2% in the quarter, then the rate hike campers will dance in the streets, and the A$ will get a boost, but. if we see 1.8% inflation, then the rate cut campers get to do the stroll, and that won't be good for the A$...

Speaking of doing the stroll. this is a sidebar, so you can skip ahead if you don't want to go through this. OK, when my older kids were young, and their friends would come over to the house, I would get them all doing the stroll in the driveway. We would all dance, me and kids that is. Fun memories. And, when was the last time you thought about doing the stroll?  Sorry youngsters, other than my kids and their friends, you probably have no idea what I'm talking about!

OK. So for those of you who skipped ahead, I'm back now. The U.S. data cupboard has more than the Jobs Jamboree for us today. The Net TIC Flows for August will print, along with the Leading Index for Sept. As I told you yesterday, the data cupboard is going to be chock-full-o-data this week, as the U.S. attempts to get caught up on the data prints that were held back during the Gov't shutdown. It will be a veritable Whitman's Sampler of data this week.

Dobie Gray is singing Drift Away this morning. And that's exactly what I wish I could do! Drift away to a secluded island where the warm sunshine is present every day. Ahhh. Hey! At least I can drift away in my mind! And that song was followed by Pink Floyd's Comfortably Numb, which plays well with drifting away, eh?

For What It's Worth. I found this on CNBC.com and is an interview with Marc Faber,  that was on Squawk Box. Marc Faber doesn't hold back his thoughts folks. So, here you go!

"Marc Faber, publisher of The Gloom, Boom & Doom Report, told CNBC on Monday that investors are asking the wrong question about when the Federal Reserve will taper its massive bond-buying program. They should be asking when the central bank will be increasing it, he argued.

"The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion] , $200 [billion], a trillion dollars a month," Faber said in a "Squawk Box" interview.

Faber has been predicting so-called "QE infinity" because "every government program that is introduced under urgency and as a temporary measure is always permanent." He also said, "The Fed has boxed itself into a position where there is no exit strategy."

Chuck again. See, I told you. No holding back!  Remember, Big Ben Bernanke, never said he was going to taper. And still, the markets carry on as if he emphatically said, "I'm going to begin to taper at "x" meeting". I think the markets are misguided on this one. Notice I didn't say they were wrong, because the markets are never wrong!

To recap. A very tight range for the currencies and metals overnight, as the markets come to grips with economic data that has been missing for 3 weeks. First up to the plate will be the Jobs Jamboree today, and then a veritable Whitman's Sampler of data the rest of the week. China signs agreement to swap currencies with the UK. Are you paying attention to this folks? Chuck thinks the Eurozone is next. The price of Oil has fallen below $100, and we'll see the latest color of Aussie inflation tonight.

Currencies today 10/22/13. American Style: A$ .9670, kiwi .8455, C$ .9715, euro 1.3675, sterling 1.6135, Swiss $1.1070, . European Style: rand 9.8715, krone 5.9445, SEK 6.40, forint 215.20, zloty 3.05655, koruna 18.8340, RUB 31.91, yen 98.35, sing 1.2405, HKD 7.7530, INR 61.65, China 6.1395, pesos 12.97, BRL 2.1840, Dollar Index 79.73, Oil $98.82, 10-year 2.60%, Silver $22.10, Platinum $1,429.60, Palladium 745.95, and Gold. $1,314.08

That's it for today. Man was I ever tired yesterday! Usually, I've gotten tons of rest on the weekends, and I'm fresh as a new day on Monday. But not yesterday! That doesn't bode well for the rest of the week either, as I could lay my head down and sleep right here, right now! UGH! It will feel weird having a Jobs Jamboree on a Tuesday today. Usually they print on a Friday.  We're all set for this weekend. The family is heading down to Columbia Mo, for Homecoming weekend, and the football game Saturday night! Should be lots of fun!  House Decs on Friday night, tailgating Saturday. Alex is going to do an official visit to Mizzou on Friday. Funny, he's been going down to Mizzou since he was 3. And with that. I'll get out of your hair for today, and hope you have a Tom Terrific Tuesday!

Chuck Butler
EverBank World Markets

Posted 10-22-2013 12:17 PM by Chuck Butler
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