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  • China Puts The Brakes On!

    In This Issue..

    * Risk Aversion sets in, on China's moves...
    * Now, we know what's going on with the TIC's!
    * Germany to step in to save Greece?
    * Honkers losing value VS the dollar...


    Good day... And a Wonderful Wednesday to you! As I understand it, we are in for some Monsoon like rain today and the next couple of days... Living in a little river town, and having a creek at the back of my property, lends itself to cause me to worry when I hear things like Monsoon like rains expected... But... It's mother nature, I can't do a thing to stop it, so, I carry on... But worrying while I carry on!

    The rain is falling on the currencies too... The dollar has rebounded very quickly the past few days, and there are no roadblocks right now. The risk takers in the markets are running for safety again, sent running by China's decision to curb lending and attempt to slow growth before their economy overheats......
  • Japan Posts a 4.8% GDP!

    In This Issue..

    * Risk Aversion goes away mad...
    * China just says 'no' to currency flexibility...
    * Maybe a return to fundamentals?
    * Gold continues to soar!

    Good day... And a Marvelous Monday to you! It's raining here, so it's one of those Rainy Days and Mondays... But I won't let it get me down, as opposed to the song! I got a chance to check out our new digs in the building next door to us here... Very nice! And... A long way from that small office I sat in on Olive St. a decade ago, when we started EverBank... To think back 10 years ago, and where we are today... Simply amazing!

    OK... As I told you Friday, the President was in China this past weekend, trying his best to get the Chinese to agree to a greater flexibility for the renminbi... Well... There were a few stories this past weekend that hinted about the Chinese agreeing to do such... But I prefer to go with this story that appeared on Reuters last night... 'The Chinese government has sought to distance itself from speculation surrounding a central bank statement earlier this week that was interpreted as a shift in currency policy towards a stronger yuan. However, a report on Saturday by Xinhua, the state-controlled Chinese news agency said that the government would not allow the currency to gain against the dollar in the short term.'

    ...
  • Germany & France Post 3rd QTR Growth...

    In This Issue..

    * Risk Aversion fuels dollar rally yesterday...
    * Eurozone growth may stop the Risk Aversion...
    * Budget Deficit is a record $176.4 Billion!
    * Euro, Swiss, Aussie, Norway, all cheaper today!

    Good day... And a Happy Friday to one and all! Let's try to make this a Fantastico Friday as well! The Risk Aversion that was creeping into the currency markets yesterday really took hold in the U.S. trading session, which meant the dollar was being bought once more, along with Japanese yen...

    It just makes me laugh out loud, when I write that the 'safe haven currencies' during Risk Aversion trading are the dollar and yen... These two countries have debt up to their eyeballs, pay no interest on their deposits, and have a leadership deficiency... (ok, before every begins to think that I'm ripping the president again, I'm not... I'm talking about the Central Bank, and lawmakers of each country)...
  • 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....
  • Risk aversion returns…

    In This Issue..

    * Risk Aversion returns...
    * Money Multiplier dampens stimulus effects...
    * TIC flows show concern of foreign investors...
    * China back on growth track...

    Good day... Chuck got an early start on a two week hiatus from the desk, so you will be stuck with me writing the Pfennig for the next two weeks. But don't worry, you will still get a small dose of Chuck over the next week as he typically emails me his thoughts while on the road (I call it Pfennig Pfodder). Risk aversion dominated the currency markets overnight, as terrorists set off two separate explosions in Jakarta and investors moved money back into the 'safe havens' of the US$ and Japanese yen.

    Chuck wrote about this move yesterday, believing the bad news regarding CIT would probably cause a risk reversal. But the US stock market shook off the CIT news and rallied higher after a big earnings report by JP Morgan and a somewhat positive statement by Nouriel Roubini. Roubini, the New York University economist who is credited with predicting the financial crisis, said in a speech yesterday that the US economy might be close to the bottom. The stock jockeys took this statement along with the positive earnings reports and ran stocks up. But Roubini later tried to caution these bulls against reading too much into his statement, and reminded everyone that he has not changed his thoughts on a US recovery: 'I continue to see a shallow, below par and below trend recovery.'...
  • China Is Back On The G-9 Docket...

    In This Issue..

    * Risk Aversion is strong once again...
    * Currencies get sold...
    * What's China really up to?
    * RBA to leave rates unchanged?

    Good day... And a Marvelous Monday to you! Some people have the day off today, so we'll probably not be back in full force until tomorrow... Not that we've been in full force, as a workforce in the U.S. for some time... But that's another story for another day! Today is a new day, and new week!

    Friday's thinned out markets were not what the currencies wanted to see, as the bias to Risk Aversion was magnified in the thinned out markets, only making the selling of the currencies even worse... Some 'levels' were hit in the thinned out markets, and that caused even more selling in the overnight markets as Japan and Asia came on board....
  • Wild Swings!

    * Euro gains, then loses, then gains... * Inflation and Commodities... * The euro turns 10! * Risk Aversion remains but is waning... ** Wild Swings! Good day... And a Terrific Tuesday to you! Well, it happened way too late for yours truly to witness it, but my beloved Missouri Tigers rallied and won the Alamo Bowl in overtime. Go Tigers! Hopefully they can fix the defense before next fall! OK... Remember those Wild Swings I talked about yesterday? The Wild Swings that could be a result of thin volumes in this the second week of Christmas. Well... We witnessed them in earnest yesterday! As I signed off yesterday, I told you that the euro had rallied 2 whole figures to 1.43 and change. Well, that rally dissipated throughout the morning, and by late in the day the single unit was 1.39 and change... WOW! Now that's a Wild Swing! You can point to profit taking as the reason for the move, and with the volumes thinned out by Holiday trading, one profit taking sell begot another, and before you knew it, the euro was looking at a loss on the day....
  • Day Two For Risk Aversion...

    * More losses... * Currencies rebound... * Jumping off the bandwagon... * Slowing renminbi appreciation?...