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  • The Dollar's Sword Swings In All Directions.

    In This Issue.

    * Even so-called safe havens get sold.

    * The new and improved GDP prints!

    * Canada prints Current Account Balance.

    * BCB hikes rates 50 basis points!.

    ...
    Filed under: , , ,
  • G-20, Schmee 20!

    In This Issue..

    * No clear direction from G-20...
    * A bias to sell dollars this morning...
    * Those guys are wrong, and I'm right!
    * Riksbank to hike rates this week?

    Good day... And a Marvelous Monday to you! A weekend that feels like it went by in a flash! WOW! Don't know how that happened, but it did... This coming weekend will be a 3-day Holiday weekend, so hopefully that 'went by in a flash' feeling doesn't repeat itself!

    Well... This past weekend was the G-20 meeting, and the anticipated brawl between the U.S. and Germany on spending VS cost cutting... Well, the brawl didn't happen, instead they agreed to say that they will 'tackle deficits once economic recoveries are assured'... Which here in the U.S. means... NEVER! Not that the economic recovery won't eventually come along, but that our lawmakers aren't going to stop spending... However, there are elections that might just change their minds, eh?

    ...
  • German ZEW Investor Confidence Plummets!

    In This Issue..

    * Currencies move back and forth...
    * A HUGE hickey for us from Fannie and Freddie...
    * The Chinese respond to Geithner...
    * Canada GDP to reach pre-recession levels?

    Good day... And a Terrific Tuesday to you! Well, day one of me basically by myself this week is put in the books... A non-event... A dentist appointment was all the excitement I had last night!

    Well... That risk assets rally that we were watching yesterday morning, ran into a speed bump around noon... Yes, the euro was nearing 1.23, Aussie was looking as though it would touch 87-cents, and so on... But then along came Moodys... Talk about bad timing! Ok... Let me set this up for you...

    ...
  • Let's Talk Deficits...

    In This Issue..

    * A$, kiwi, and C$'s outperform...
    * Yen gets what is deserved!
    * Deficit to reach 100% of GDP?
    * Don't they work for us?

    Good day... And a Thunderin' Thursday to you! It has been Thunderin' here most of the night, so it was quite fitting to call our Thursday, Thunderin'! It's been a week of pop-up Thunder Showers for us here in the Midwest... If summer plays out the way most summers play out, we'll be pining for rain come August!

    The Japanese have a new Prime Minister (Kan), and the currency markets don't like it! The once so-called 'safe haven' of yen, is getting sand kicked in its face, and rightly so, as the new PM has previously stated his goal of a weaker yen...

    ...
  • Risk Aversion Is Back!

    In This Issue..

    * Euro bashing is back!
    * Canadian GDP jumps to 6.1%!
    * RBA keeps rates unchanged
    * 7-U.S. cities have 'junk debt'...

    Good day... And a Terrific Tuesday to you! And welcome to June! As Pfennig tradition would have it... June is busting out all over, all over the meadows and the hill! Buds're bustin' outta bushes, And the rompin' river pushes, Ev'ry little wheel that wheels beside the mill! And you thought I was just a 'rock-n-roller!'

    Well... Yesterday while we were honoring the fallen soldiers of today and yesteryear, the Europeans were knocking the stuffing out of the euro once again... This time, it was a story that spread like wildfire regarding the Eurozone economy not being able to have strong growth, because of all their austerity measures... Now... Come on boys! First you slam the euro's fingers in the door (OUCH!) for not cutting deficit spending in a few countries, and when they do show a willingness to cut deficit spending, you the ruler out and smack the euro right across the wrist!

    ...
  • Hitting Parity!

    In This Issue..

    * BOC removes the interest rate governor...
    * The loonie passes parity...
    * Euro succumbs to renewed Greek pressure...
    * RBI raises interest rates!

    Good day... And a Wonderful Wednesday to you! Who's that? Who's that writing the Pfennig this morning? Well... It's our old Pfennig writer himself! I thought I would give this a try to see how it feels to concentrate and write... So... Here I am!

    Hello everyone! I want to start today with a great big THANK YOU to everyone that sent along prayers, thoughts, good wishes, and everything else to me last week... Yes, it's me! I'm going to take a stab at writing again after two weeks... It's been a turn on Mr. Toad's Wild Ride the past two weeks, but I'm here... I'm out of cancer pain... And... Ready for life's next fork in the road....
  • U.S. States In Deep Trouble!

    In This Issue..

    * A long history of dollar moves...
    * Canadian GDP jumps 5%...
    * U.S. Traders didn't like the Greece package...
    * Getting out of Dodge...

    Good day... A Wonderful Wednesday to you! I hope your Tuesday was Terrific! Day one with just my little buddy Alex and me at home went off without a hitch... I took him to the jazz guitar teacher, and he sounded great! He auditions for the high school jazz band on Thursday. He'll be just a freshman, so it will be quite the uphill battle for him to make the band in his first try... But... He's so darn good!

    Well... I have to say front and center this morning, that while it may have taken the currency traders 1/2 day to realize that Australia had raised rates, to finally begin to push the A$ higher VS the green/peachback... I was beginning to think yesterday that I was going to have to have egg all over my face again, when the A$ didn't respond right away... But it was all right on the night, so it's no egg on the face for me!...
  • RBA Hikes Rates!

    In This Issue..

    * A long history of dollar moves...
    * Canadian GDP jumps 5%...
    * U.S. Traders didn't like the Greece package...
    * Getting out of Dodge...

    Good day... Well... I'm back in the saddle! And a Terrific Tuesday to you! It didn't take long for me to get the emails started telling me how wrong I am again... WOW! Of course, I wonder where these people have been the last 9 years, as when 9 years ago I was the first writer to issue a white paper calling for the long term down trend for the dollar... Or, in 2002, when everyone was writing off the euro, I wrote the white paper, 'The Year of The euro'... Or in, 2005, when everyone called for the collapse of the euro... But not me... Or, in 2008, when everyone called for the collapse of the euro... But not me...

    Is this time different? I doubt it... Lose value for 6 more months? In my opinion yes... But then returning to the underlying weak dollar trend. Look folks, if you really think that by sending me emails telling me I'm wrong, and I'm stupid, and everything else, that I'm going to change my mind on this... Then you might as well stop! Or... Start writing that great American, NOT! George Soros, and tell him how great he is......
  • We Won't Get Fooled Again!

    In This Issue..

    * Bernanke digs out some old words...
    * Risk on, Risk off...
    * Brazil to have a different meeting outcome?
    * Winter Olympics are in Canada...

    Good day... And a Terrific Tuesday to you! What a ride on Mr. Toad (Bernanke's) Wild Ride yesterday for the currencies! Gold? Well, at one point in the day, Gold had shot up $24 on the day! It topped out at $1,142... The shiny metal then gave some back on profit taking, but Whew! Gold holders have got to love it! Those that keep waiting for a pull-back... Well, they might be still waiting when the cows come home...

    Yesterday, we had a couple of Fed Heads talking, but the Big Kahuna, stood out, and moved the markets with his statements... Here's the skinny......
  • 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.!

    ...
  • OMB Makes New Deficit Forecast...

    In This Issue..

    * The BLS adds jobs...

    * Growing Deficits again...

    * Jim Rogers....

    * A Trade Surplus for Canada...

    Good day... And a Terrific Tuesday to you! Well... I'm here! Lost Wages... No I mean, Las Vegas! It's such a long flight here! UGH! And the plane was packed... Like I said about a month ago, when you take a flight, it sure doesn't seem like people have cut back on spending!

    OK... Well, the currencies took a breather VS the dollar yesterday, and basically traded right around the currency round-up levels most of the day. Overnight, things were pretty quiet too... The markets are trying to figure out which way they are going to go with the dollar... The Deficit is growing, which SHOULD be bad for the dollar, but in recent times, fundamentals get a little hazy at times. So... Let's go to the tape on the Office of Budget Management (OMB)...
  • A shrinking US economy puts pressure on the US$...

    In This Issue..

    * US GDP falls more than expected...
    * FOMC holds course...
    * Canadian dollar has a great week...
    * Oil helps commodity currencies...

    Good day... Yesterday was a big day in St. Louis as President Obama came to visit on his 100th day in office. I can't believe it has been 100 days since the inauguration. Time sure does fly! I'm sure Obama and the rest of his administration would like the calendar to move even faster as this recession will likely last through the end of 2009. While the government has thrown trillions of dollars at the markets in an attempt to turn them around, the key ingredient for recessionary cycles to reverse is time. There is now 'quick fix' for the problems we are in, and the policies the administration has begun will take time to have an impact on our shrinking economy. Obama said as much in his nationally televised press conference last night....
  • Saying "NO" To Eastern Europe...

    * Dollar continues to rally... * John Taylor buys dollars... * Canada sees a deficit! * More bailout funding... ** Saying "NO" To Eastern Europe... Good day... And a Marvelous Monday to you! Welcome to March too! Here and a lot of the country saw March come in like a lion, which means it should go out like a lamb, right? Let's hope it begins turning in that direction before month-end! 9 days before I leave for Florida, the countdown begins! Well... The currencies continue to trade heavy under the pressure of the dollar, and the "flight to safety" in Treasuries... The euro has lost the 1.26 handle and continues to look weaker and weaker all the time. The latest move down came as a result of new that Eurozone leaders rejected a request for Eastern Europe aid... Here's the skinny on that......
  • Bailout Package Is Ready...

    * Ready to spend $700 Billion... * Wachovia wants to sell itself... * Dollar rallies hard... * The rot on the vine spreads... ** Bailout Package Is Ready... Good day... And a Marvelous Monday to you! A Wonderful Weekend for yours truly, as the weather was Chamber of Commerce like, I got to see all the kids, and little Delaney Grace two days! I also got to enjoy two football games, one that Alex played in, and one that Alex went with me to! Fabulous stuff! OK... The data on Friday was the stuff that should have sent the dollar to the woodshed, but like all the data lately, it just gets swept under the rug, as the market movers are myopic with the Bailout package. Lawmakers worked all weekend to iron out the details of the package, and King Henry (U.S. Treasury Sec.) has announced again that the package has been agreed on by Congress. The vote doesn't actually take place until tomorrow or Wednesday, but that hasn't stopped King Henry from pounding his chest over his latest victory. I like what I heard from former Fed Gov. (and Mark Twain Bank economist) Laurence Meyer, who said: "This has a reasonable chance of pulling back from the brink and having some success, but it's far from certain that will be the case."...
  • Don't be fooled by the US GDP...

    * Don't be fooled by the US GDP... * Canada, Mexico, and Brazil rally... * Aussie dollar falls... * Japanese to keep rates unchanged... ** Don't be fooled by the US GDP... Good day...And welcome to the last day of July. The dollar held its ground through most of the trading day but started to sell off as the day wound down. The currency markets seem to be stuck in a summer doldrums, with few dramatic moves. With many of the head traders enjoying a summer break (ours included), currency desks are reluctant to take on large positions. And who can blame them as the recent global economic data has left investors wondering where to turn. As I have explained to several recent callers, the global economy is experiencing a slowdown as the high commodity prices and a slumping US economy has hurt growth. The economic releases have shown an overall slowdown in growth, and rising global inflation. But the overall slowdown will have differing effects on the currencies. Asia is slowing, but a slowdown from double digit growth in China and India is much different than a slowdown in the US where growth is around 2%. Also, the Asian countries have kept interest rates low to try and keep their currencies from appreciating too quickly. These countries are therefore in a much better position to combat inflation, and can allow currency appreciation to help combat rising prices....