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  • Germany's Merkel gets her way...

    In This Issue..

    * Germany's Merkel gets her way...
    * Confidence in the US ebbs lower...
    * China to stick to renminbi policy...
    * Gold stops sliding...

    Good day, we had another strong day for the dollar yesterday, with the greenback gaining against all of the majors. But overnight, the Asians and then the Europeans sold the dollar and moved money back into the currencies. So after another rollercoaster ride, we are basically right back where we were at this time yesterday morning. These volatile markets are likely to continue, as investors try to figure out if the global economy will recover or if we will slide back into recession. With all of this uncertainty, you would think investors would be moving into 'hard assets': Gold and Silver. But the markets for these two precious metals have been surprisingly quiet this year. More on the metals a bit later, first I will try to figure out these currency markets....
  • Carry Trade reversals rally dollar / yen

    In This Issue..

    * Carry trade reversal boosts the dollar/yen...
    * STL Fed Head Bullard sends mixed signals...
    * Audit of Fed in jeopardy...
    * Kiwi and AUD fall...

    Good day... And a Thunderin Thursday to you! Yes, the rain continues today, but I hear it is supposed to stop this afternoon. Fear of risk rained on the currency investors' parade as an equity market sell-off fueled a US dollar and Japanese yen rally. At times it looks as if we will break this pattern of markets up dollar down/ markets down dollar up, but it seems investors continue to return to the US$ and Japanese yen as soon as they become worried about equity market returns....
  • Silence Is Golden...

    In This Issue..

    * A HUGE dollar sell off overnight...
    * BLS admits the Birth/Death model was wrong...
    * The 20th anniversary of the fall of the Berlin Wall...
    * Kiwi is best performer overnight...

    Good day... And a Marvelous Monday to you! A Spectacular weekend, weather wise, here in the Midwest... And Indian Summer, is what my dad would have called it. The news from the Sports teams wasn't so spectacular, but we had the weather going for us!

    Welcome to Monday's edition of A Pfennig For Your Thoughts... I'll start off today with a note about the currencies, then do a recap of Friday, and then a look ahead to the rest of the week... So... Strap yourself in, and make sure to keep your arms and legs inside at all times during the ride!...
  • Rates To Remain Near Zero...

    In This Issue..

    * Dollar reverses sell-off...
    * BOE & ECB meet today...
    * New Zealand is not Australia...
    * Funny accounting...

    Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' because it's a Thursday and it's not raining! Yay for us! Well... Not only was I wrong, but the Bloomberg Economic Calendar was wrong too... The FOMC was not a 2-day meeting after all! Just one day, so no time to pull out the board games and cards...

    I nailed that FOMC statement yesterday... WOW! You might begin to think that I have some inside info on the Fed Heads, the way I've been able to basically call every move they've made since the beginning of this whole meltdown in August of 2007! But that's not important here... The important thing is that the Fed said that economic growth is not enough to hike rates, and therefore they will keep interest rates at near zero for an 'extended period'...

    ...
  • 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%.

    ...
  • The dollar drifts lower in thin trading..

    In This Issue..

    * US$ drifts lower in light trading...                    
    * Euro/Yen benefit from reserve diversification...                      
    * Pound sterling continues to drop...                                    
    * New Zealand retail sales pick up.....
                                                                                 
    Good day... and happy Tuesday morning to everyone.  As Chuck told everyone yesterday, he is heading down south to a corporate meeting, so you will be stuck with me for the remainder of the week.  Yesterday was an official 'bank holiday' but apparently most of the WorldMarkets customers were unaware, as our phones were surprisingly busy.  Trading in the currency markets was substantially lighter than usual, and with no data releases in the US, the dollar drifted sideways throughout the day.  The European currencies were slightly higher vs. the US$, the Asian currencies were lower vs. the US$, and the commodity based currencies were mixed.

    ...
  • 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......
  • Whiplash Wednesday!

    In This Issue..

    * Currencies rebound VS the dollar...
    * Aussie and kiwi lead the currencies higher...
    * Data and Central Bank speeches today...
    * Gold rebounds back to $1,000!

    Good day... And a Wonderful Wednesday to you... Instead of a 'turn around Tuesday', we're seeing a whiplash Wednesday! And for once in a month of Sundays, the Big Dog, euro didn't lead the other little dogs (currencies) off the porch to chase the dollar down the street!

    No... This time it was the currencies of Australia and New Zealand that led the charge VS the dollar... The euro has taken up the charge since opening the doors to a new day of trading in Europe, so... It looks like it's a 'take the dollar to the woodshed day'......
  • G-20 Heats Up...

    In This Issue..

    * Dollar's rally is cut short...
    * Major problems for loans still exist...
    * Yen rallies on exporter repatriation...
    * Kiwi gets whacked!

    Good day... And a Happy Friday to one and all! It's still raining here in St. Louis this morning, but I won't that get me down, as it is a Friday! G-20 has gotten a bit ugly, folks... Seems everyone just can't seem to get along! Imagine that! 20 different countries, and now they want to be able to watch another country's finances and comment on them! Oh, I can see that working out real well! NOT!

    So... Yesterday, we had the dollar gaining back the ground that it had lost the previous day, but at the end of the day, we're looking very much like the currencies hadn't moved from morning to morning... And overnight, didn't bring about much movement... So... When you get to the currency round-up below, you'll see the dollar's gains were small, and short-lived....
  • Risk aversion disappears again...

    In This Issue..

    * Risk aversion has left the building...
    * CIT survives without Fed help...
    * SNB tries to fight the markets...
    * Light week for US data...

    Good day... We had just an amazing weekend of weather here in St. Louis, and this morning is shaping up to be another beautiful day. Friday turned out to be a beautiful day for those who have taken our advice and diversified their holdings out of the dollar. Risk aversion was placed on the back burner again, and investors moved money back out of the dollar into higher yielding currencies. The dollar and yen got sold but all other currencies rallied, and investors also turned back toward gold pushing the metal above $950 for the first time in over a month.

    So what caused all of this confidence? First, the housing data released Friday morning in the US showed a slight pick up in both building permits and housing starts. While the housing markets have a long way to go, the data have given investors an indication that construction may have found a bottom. Not to throw cold water on investors confidence in the building numbers, but while the residential market may be bottoming out, the commercial market continues to tumble. I spoke to a good friend over the weekend who is a commercial real estate developer down in Memphis. He told me that his development pipeline has completely dried up, and even the brokerage side of his business has slowed. The only part of his business which has picked up is the marketing of foreclosed properties. He has shifted his concentration to helping banks and lenders 'work out' of commercial projects which they have taken back onto their books. The economy has kept most companies from opening new stores, and many continue to shut down under performing ones. My good friend tells me most of the people he talks to don't believe the commercial real estate market will turn around until the end of next year. Not good news for the banks who are still reeling from the residential real estate bust....
  • Desperately Seeking Yield...

    In This Issue..

    * Currencies rally...
    * More on the BRIC's...
    * New Zealand's GDP contracts..
    * Bernanke gets grilled!

    Good day... And a Happy Friday to one and all! The end of what seemed to be a very long week... The last weekend in June, can you believe that? Next week, we'll be getting ready for the 4th of July celebrations! WOW!

    Well... What a volatile week it has been in the currencies! Up, down, all around, and settling back to levels that we saw before the Fed's FOMC meeting earlier this week. Suddenly, investors are looking for yield again... Looks like they are "Desperately Seeking (not Susan) Yield! And why not? The Fed, and the Bank of Canada (BOC) have come out and said that there will be no interest rate hikes until we've turned quite a few pages on the 2010 calendar....
  • A Sustainable Economic Recovery?

    In This Issue..

    * More range trading...
    * Eurozone doesn't need more stimulus...
    * A$'s outperform on rate outlook...
    * A double whammy for the dollar...

    Good day... And a Happy Friday to one and all! The end of another week... I was out on Monday, and it still seems to have been another long week! UGH! Oh well... It's Friday, and this weekend is Father's Day... So, we've got that going for us, eh?

    More range trading in the currencies yesterday, with the euro leading the currencies higher for most of the day, only to see their gains slip, sliding away by the late afternoon. In the overnight markets, the currencies, once again, have moved higher, but nothing to get all lathered up about......
  • 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....
  • Bad news for GM and Chrysler rallies the US$...

    In This Issue..

    * Bad news for car makers rallies the US$...
    * Yen comes back strong...
    * Singapore to devalue?...
    * German Chancellor Merkel gives warning...

    Good day... And good Monday morning to all of you. I can't believe March is nearly over, it seems as though it just started. March will end up being a pretty good month for the currency markets, as investors exited the safety of US treasuries and started moving funds back into higher yielding assets. But the markets continue to be volatile, and news released on Friday and over the weekend has sent these investors rushing back to the safe haven of the US dollar.

    The Japanese Yen and US dollar benefited after a US Government official said Friday that bankruptcy may be the best option for GM and Chrysler. The dollar continued to gain strength this morning after US Treasury Secretary Geithner warned yesterday that some financial institutions will need 'large amounts' of aid. When the Treasury Secretary says large amounts, you know it is going to be billions or trillions! Geithner was making the rounds of Sunday morning talk shows to try and justify the money already spent and prepare the taxpayers for another request of funds....
  • Geithner tanks the dollar, but then pushes it back up...

    In This Issue..

    * Geithner sends the dollar on a thrill ride...
    * A failed UK gilt auction...
    * China set to recover first...
    * AUD and NZD rally again...

    Good day... The currency markets took back what little strength the dollar mustered over the past two days with the Euro moving back above popping back above 1.36 and the Australian dollar moving back up over .70. The cause for this dollar weakness? Data released in the US yesterday was surprisingly strong again, so investors dumped the 'safe haven' holdings of Treasuries and moved money back into higher yielding investments.

    At one point yesterday the dollar index dropped precipitously (more than 1.5% in less than 10 minutes), and then bounced back up within a half hour. Jennifer McLean, who takes care of our currency trading while Chuck is away from the desk, said the sudden moves were due to Treasury Secretary Geithner's comments. Apparently Geithner was asked about China's call for a new international reserve currency yesterday at a NY event. He said that while he hadn't read the proposal, he understood it as a plan 'designed to increase the use of the IMF's special drawing rights. And we're actually quite open to that.' After hearing those words, currency traders immediately starting selling off the dollar. After all, if the Treasury Secretary of the US says the administration is open to a new international reserve currency, why do you want to hold dollars? I guess Geithner got wind of what he had done to the currency markets pretty quickly (the power of Blackberries!) and 15 minutes later he clarified his comments to say the US dollar should remain as the world's reserve currency....