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  • Finally some positive news for the US labor mkt.

    In This Issue..

    * Finally some positive labor news...
    * ECB and UK rate decisions...
    * China to stress test banks...
    * Happy Birthday Delaney Grace!!...

    Good day... Thunderstorms are rolling through the St. Louis area this morning, and while we don't need the rain, the cooler temperatures they are bringing with them are certainly welcome.

    The dollar moved a bit higher yesterday as data released here in the US finally contained some positive news for US workers. The ISM's index of non-manufacturing businesses rose to 54.3 in July from last month's 53.8 figure. And more importantly for market psyche, it was well above expectations which had predicted a drop to 53. About 90 percent of the US economy is service related, so this number is more closely watched than the manufacturing reports....
  • Canada boosts rates….

    In This Issue..

    * Canada boosts rates...
    * BOE called out for quantitative easing...
    * Indian Rupee to shine...
    * China loosens grip on Hong Kong deposits...

    Good day. We had some pretty unsettled weather come through the area yesterday and last night, with the lightening and thunder producing quite a show. The currency markets, on the other hand, were quite stable. The biggest gainer was the Yen, and the largest loser the Euro; but neither moved more than .65% vs. the US$. Tight ranges across the board for the currency markets....
  • ‘For Much Longer’...

    In This Issue..

    * Aussie PM resigns!
    * Aussie mining tax is dead!
    * New Home Sales plummet 33%!
    * Fed is not so "cocky" any longer...

    Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' because of some good, no great news from Australia overnight! It certainly isn't because of the Housing data that printed yesterday! And the Fed isn't so 'cocky' about the economy suddenly... Hmmm... These things and more, as we explore our Tub Thumpin' Thursday, so let's go!

    Front and Center this morning, Julia Gillard became Australia's first female prime minister after Kevin Rudd stepped aside as leader of the governing Labor Party, paving the way for the government to drop a controversial new 40% levy on mining profits that has damaged its standing in voter polls.

    ...
  • FOMC Day – 06/23/2010...

    In This Issue..

    * A tight trading range day...
    * High yielders underperform...
    * Franc at all-time high VS euro...
    * Gold gets back on rally tracks...

    Good day... And a Wonderful Wednesday to you! It's also a BIG DAY for the U.S. Men's soccer team... Yes, I know they call it football in all corners of the world but here... Our Soccer legend, Ty Keough, calls the U.S. version of football, 'the gridiron'! Any way, it's a Big Day for the Men's team... Win and they are assured of moving on.

    Yesterday, after the currencies had sold off in the overnight sessions, they traded throughout the U.S. session in a tight range, with a bias to move higher, but not being able to mount any kind of sustained move against the dollar....
  • Brazil Hikes Rates Again!

    In This Issue..

    * Currency rally holds on to gains...
    * Rate hikes begin to add up...
    * Trade & Budget Deficit monsters...
    * Canada posts a trade surplus!

    Good day... And a Happy Friday to one and all! Let's go on record right out of the starters' blocks this morning, and say this will be a Fantastico Friday, eh?

    Well... What a rally in the risk assets yesterday! And for once, when the rally fizzled out yesterday afternoon, profits weren't taken in the overnight markets... Instead we saw a consolidation, if you will, of the price gains on Thursday in the overnight markets. That's nice to see, eh? For it had been the pattern of recent times to just sell off any gains, and end up back on square one, or even lower than the starting level. So, like I said, this was very nice to see... I checked the levels last night before I went to bed, and noticed that there had not been any sell off, and thought, what a great Friday it would be tomorrow, if these can hold throughout the night... And they did!...
  • A Vote Of Confidence!

    In This Issue..

    * China boosts euros...
    * Chinese exports soar!
    * RBNZ hikes rates!
    * Bernanke on the "hill"!

    Good day... And a Tub Thumpin' Thursday to you! Well, we have a new Stanley Cup Champion, and plenty more to talk about today! The Mid-West has been in one of those weather patterns that sees the day heat up, then produce violent storms, and then clears up... Sometimes it seems as though this lasts forever!

    OK... Well, Front and Center this morning, the euro is pushing higher on some words from Asia... Seems that China is very much behind the euro, and made statements related to that thought, which really put some starch in the euro's shorts overnight. The thing I worry about right now, is the European Central Bank (ECB) meeting that's going on as I type my fat fingers to the bone... The ECB could crush this mini-rally in the euro in a heartbeat by saying the 'wrong thing' at their press conference that will be held after the ECB announces that rates will remain unchanged.

    ...
  • 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.

    ...
  • Abu Dhabi Provides $10 Billion Bailout...

    In This Issue..

    * A Huge Friday Sell off!
    * U.S. Retail Sales are strong...
    * Testing the risk waters again...
    * Norges Bank & Riksbank meet this week...

    Good day... And a Marvelous Monday to you! Friday turned out to be Fantastico, as I had hope for, and the weekend was for resting, as I was on my feed too much Friday night. It was NOT a Fantastico Friday for the non-dollar currencies, though... I'll get to that in a minute... First though, I want to crow a bit on the Dubai debt problems...

    It was announced this morning that Dubai's government received $10 Billion in financing from Abu Dhabi... Hmmm... You know, I read somewhere a couple of weeks ago, when this debt /loan repayment problem was announced, that in the end, the Abu Dhabi government would step in to bail out Dubai, for the people running the two governments are blood related, and even though there had been shots fired between the two, blood would run thick here... And voila that's exactly what happened!...
  • 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....
  • A New Year’s Jobs Jamboree Friday...

    * Will the ADP report be a good indicator? * China to slow treasury purchases? * Gold as a store of wealth... * Dealing with the devil... ** A Jobs Jamboree Friday... Good day... And a Happy Friday to one and all! A Fantastico Friday, as it is forecast to get to 50 degrees today here in St. Louis. Never mind that tomorrow's high will be 29! It doesn't take away from today! What a trading day in the currencies yesterday... Whew! It's a Jobs Jamboree Friday, so let's not beat around the bush... It's time to Jamboree! Today is the day the Gov't prints the December Jobs Jamboree, and if Wednesday's ADP report did what they said it was going to, and that is change their methodology to mirror the BLS (Bureau of Labor Statistics) then this morning's Jobs Jamboree will be a nightmare. Of course not the kind of nightmare that the over 2.5 million people that lost jobs in 2008 had! I was once in those numbers, as our old Bank, Mark Twain Bank, was bought by a bigger bank, Mercantile Bank, and Mercantile decided after a few months to perform ethnic cleansing of Mark Twain employees... I called it "my retirement" but with a 3 year old at home and on my lap most of the day, "retirement" couldn't last too long! My point is that you don't know the emptiness and failure you feel when they show you the door... So my thoughts are always with those that lose their jobs......
  • Dollar bounces back up...

    * Dollar bounces back up... * Paulson heads back to congress... * BOJ cuts rates to below the US... * China to continue increasing the value of the Renminbi... ** Dollar bounces back up... Good day... The currencies took a breather overnight as the dollar bounced back up. When we left last night, the Euro was still holding above $1.42, but the single unit dropped 3 cents overnight and is now hovering around the $1.39 level. This move back down was to be expected, and serves as an excellent opportunity for investors who were afraid they had missed out on getting back into the currency market. I have searched the news wires this morning and can't find any good reasons for the dollar's turn around other than it had simply gone too far too fast. Mike Meyer and I were talking about this yesterday morning, as we were looking at the trading screens in amazement. The dollar's move down over the past two weeks was even faster than the move up earlier this year. Chuck had warned readers all during the dollar rally that the strength was only temporary, but the reversal was just too quick. This move back up is healthy for the markets, and will allow investors another opportunity to move back in....
  • Santa rally for the currencies...

    * A Santa Rally for the currencies?... * Waiting for the FOMC... * AUD and NZD rally... * China to try and keep growth above 8%... ** Santa rally for the currencies... Good day...It was actually a Great day for the currencies yesterday as the dollar index dropped another full point. The Euro moved past $1.35 and then blew through $1.36 to end the day over $1.37. And the Euro wasn't even the best performer, as the New Zealand dollar rallied over 2.1% vs. the US$ to take the title of best performing currency against the greenback. The South African rand was the only currency turning in a negative performance yesterday with the other commodity driven currencies of Norway and Brazil just barely holding their ground vs. the US$....
  • Spending More Money...

    * Turn back the clocks to 1950... * Currencies rally on the day... * Bank of Canada to cut rates today... * Fed Funds to zero? ** Spending More Money... Good day... And a Terrific Tuesday to you! It's raining like cats and dogs outside, and that rain is supposed to turn to snow tonight, so we've got that going for us! Always love that rain to snow bit, as it puts a nice layer of ice under the snow! Well... It looks like the new president wants to spend more money... Yes, President-elect Obama, presented his economic plan yesterday, and before doing so, issued a warning that the economy is going to get a lot worse before it gets better. His plan calls for a pledge to spend the most on infrastructure since the 1950's... Now, let me say this... The Big Boss, Frank Trotter, and I talk about this all the time... To spend money on Financial Institutions and things that don't get used more than once like bullets and bombs, isn't our "fave" way to spend money... But building something that could be used over and over again, well, that makes sense... However, this spending could be coming at the absolute most awful timing, as the Deficits are exploding in front of our eyes, and it certainly isn't as appealing as watching the fireworks display in Vancouver!...
  • 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....
  • It's All About The Jobs Jamboree...

    * Currencies rally then fall back... * Rate slashers! * Following Japan? Let's hope not! * Canada's woes mount... ** It's All About The Jobs Jamboree... Good day... And a Happy Friday to one and all! A Fantastico Friday! A Jobs Jamboree Friday! Anything else, Chuck? No, I don't think so, I'll stop there... It's all about the Jobs Jamboree today. It's all about finding out just how badly the rot on the labor vine has gotten... The Weekly Initial Jobless Claims, yesterday, remained above 500K per week, which doesn't bode well for next month's data... But first... November's Jobs Jamboree on the docket! The "experts" have forecast a -335K drop in jobs for November... But, your old Pfennig writer believes that this forecast is low. I think it will be closer to -375K... The reason I say that is the employment piece of the ISM report that printed the other day... The employment index of that report showed some real serious rot on the labor vine... I read a report last night, where an economist was attempting to show how the report should read -750K... As bad as -375K is, I don't think the Bureau of Labor Statistics (BLS) would have anything to do with printing a -750K report!...