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  • FOMC keeps rates low...

    In This Issue..

    * FOMC keeps rates low...
    * Carry trade is back on...
    * Senators try to legislate a higher renminbi...
    * An Irish toast...

    Top of the mornin to ye... Happy St. Patrick's Day to all of the Irish readers, and all of those who are Irish for the day! Both Chuck and I have pretty deep Irish roots, and St. Patrick's Day is always one of our favorites. Chuck will be spending the day enjoying baseball in the sunshine of Florida; and I will be heading to Florida myself later today. Speaking of which, I have to catch a plane in a couple of hours, so I better get going on today's Pfennig.

    ...
  • Game off for risk trades...

    In This Issue..

    * Dollar hits 3 month high...
    * Norges bank raises .25%...
    * Fed repeats call to keep rates low...
    * Inflation in India rises...

    Good day...And welcome to Thursday. Chuck started his Christmas vacation, so I have the honor of bringing you the daily missive for the next week or so. The dollar continued to gain strength throughout the day as investors waited on news from the FOMC. Overnight, Greece sustained another rate cut, this time by S&P, which caused investors to move back toward the 'safety' of the US$. The news caused the dollar to rally to a 3 month high vs. the Euro and post gains across the board. The currency markets are becoming a bit volatile again, and much of this volatility can be linked back to the return of a transaction which dominated currency markets over the past decade....
  • 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....
  • The Worst Jobs Report Since 1974!

    * Will -533K turn to -600K? * A glimmer of light brings back risk takers... * Another week of data... * Fedspeak today... ** The Worst Jobs Report Since 1974! Good day... And a Marvelous Monday to you! What a Whirlwind Weekend for your truly, as it came and went, I did a ton of stuff, but no rest, and this morning, I was reminded that I had not gotten any rest! UGH! But! It was all fun! A great time in Jacksonville at the Headquarters' version of a Holiday Party... It was great to see the folks there that I know. OK... Did you see the rot on labor's vine Friday? The Jobs Jamboree was very unkind to many, with a 533K jobs lost in November. That number was the worst figure since 1974! The tally of 1.9 million jobs lost this year surpasses the losses of the past two recessions, and according to the Wall Street Journal, signals that the current downturn could be the worst since the years immediately following World War II....
  • Election Day!

    * The winner is... Deflation! * Trading theme in place... * RBA cuts rates 75 BPS! * Manufacturing collapses! ** Election Day! Good day... And a Terrific Tuesday to you! It's Election Day! One more day of all that he said, she said, no I didn't, yes you did, aggravating election advertising! That's it! We're finally finished with all of it! Thank Goodness it's Election Day! TGIED! This will be the end of another of the things that's keeping the fundamentals in the back of the classroom. All we'll have left is the credit squeeze... Unfortunately though I feel like we're going to have to live with that one for some time to come! There are signs that things are loosening up, but it's a far cry from what should be considered as "normal" in the lending arena! As long as the credit squeeze remains in place and on the minds of traders & investors everywhere, we're stuck with the Trading Theme of 2008... Well, let's see, it didn't come into play until late July, so it should be called the Trading Theme of late 2008 and 2009....
  • Coordinated Rate Cuts!

    * Yen trades to 98! * Carry Trades unwinding hurt high yielders... * Gold rallies back to $900! * Central Bank rate cuts.... ** Coordinated Rate Cuts! Good day... And a Wonderful Wednesday to you! Well... There's a ton of stuff to talk about today, one of which is the amazing run that Japanese yen has had in the past month, but particularly the last week! No need to sneak a peak at the currency round-up, Japanese yen is trading 98.80! WOW! I could be acting like a contortionist and trying to slap myself on the back, but that would unprofessional... And besides, the rest of the currencies are taking shots to the mid-section. Anyway... Blow the horn, the Carry Trade (for yen) is dead, may it rest in peace! OK... The currencies tried like all get out yesterday to rally VS the dollar, the euro did end the day 1% higher on the day, which after the bloodshed of the past month, I'll take that any old time! I would love to go back to 2005 (not really, but for this conversation's sake I will) and pull out some old Pfennigs where I talked about all the naysayers talking about a break up of the euro... We had the NO votes from France and Denmark on accepting the European Union's (EU) Constitution, we had riots in the streets of France, we had rising interest rates in the U.S. and dozens and dozens of naysayers called out the euro and said it would collapse under the weight. I said then, and I'll say now... HOGWASH!...
  • Back to the Days of Volcker...

    * Waiting on a 100 bps move... * Fed plays Whack a Mole... * Carry trade reverses... * China raises reserve ratios......
  • Employment Data Sends the Dollar Down...

    * Employment data sends the dollar down... * A divergence of two economies... * Carry trade reverses (again)... * The desk is back to full strength (almost)......