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  • 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?

    ...
  • The waiting game...

    In This Issue..

    * Waiting on G20 and the ECB...
    * US home prices plunge...
    * What will come from G20...
    * ECB to cut rates, but no quantitative easing...

    Good day... The markets will play a waiting game today, and I expect the currencies to trade in a pretty flat range. The focus will be on the G20 which starts tomorrow, and the ECB announcement which will also be released tomorrow. So today I will share my views on both of these topics, but first I will report on what occurred yesterday and overnight in the currency markets.

    The dollar climbed yesterday morning as data released showed US home prices plunged at a record pace and consumer confidence continues to bottom. US home prices fell nearly 19% in January according to the S&P Case Shiller index. This was even worse than economists had predicted, and December's numbers were revised down....
  • UK data boosts the dollar...

    In This Issue..

    * UK data boosts the dollar...
    * US GDP falls further...
    * Norway cuts rates...
    * Big wins by MIZZOU and BLUES...

    Good day... I want to start this mornings Pfennig with a big congratulations to the MIZZOU Tigers who pulled off what most believed was an unlikely win over Memphis last night. What a game! They move on to the Elite Eight to play powerhouse UCONN on Saturday.

    The currency markets weren't as exciting as the basketball games yesterday, as the dollar held in a fairly tight range. The big move came in early morning trading as a report was released in the UK showing their economy's contraction was worse than previously thought. This news was GDP in the UK fell 1.6% in the 4th quarter of 2008 vs. the previous quarter. And the outlook presented by the Bank of England is not rosy. BOE Chief Economist Spencer Dale said this morning that the British economy's short term prospects are 'bleak'. Chuck has brought up the comparison between the UK and US economies several times, as the UK economy looks like mirror image (albeit smaller) of the US. The UK economy has been slightly ahead of the US in the race toward economic meltdown. Unfortunately the US Fed seems to be shadowing every move by the UK, cutting rates to near zero and then using 'quantitative easing' to force them down even further....
  • Another day for the currencies...

    * Disappointing data...
    * Euro held ground...
    * Down under...

    Another day for the currencies...

    Good day...And a Terrific Tuesday to you. Another Monday morning has come and gone but not before confirming the US economy is still heading down the wrong side of the slippery slope. The uneventful trading day from Friday certainly didn't carry over as we saw a sizeable run up in currencies along with equities during the morning session. As the day progressed, the equity markets shed their gains but most of the currencies remained resilient and held on. I guess I'll stop beating around the bush and get right to it...

    It seems that Bernanke's calming approach during his interview with 60 Minutes gave investors the feeling that we are not as bad off saying the risk of a depression has been averted. He went on to say if the government succeeds in calming financial markets, the recession will probably end this year and the economy will expand in 2010....