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  • 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...

    ...
  • The Markets Ignore Bernanke...

    In This Issue..

    * The dollar continues to get bought...
    * German Investor Confidence weakens...
    * The Carry Trade shifts to Japan again...
    * More deficit spending...

    Good day... And a Terrific Tuesday to you! Not a Terrific Tuesday for the non-dollar currencies though, as the overnight markets have marked them down once again, and favored the dollar... More on that in a minute... I got a chance to meet up with some old friends and co-workers last night, at a holiday party... I had to leave early though, my leg couldn't stand that long... UGH!

    OK... The daily noise, has the bias to buy going toward the dollar this morning... For some unknown reason, and I emphasize this here... The markets are not listening to Big Ben Bernanke, when he says that current near zero interest rates will remain for 'some time to come'... You see, the markets are under the impression that he's giving us a head fake, and will raise rates aggressively very soon, for the data that has printed recently is of the "need to raise interest rates before inflation takes the economy hostage" kind of stuff......
  • Blood in the streets.....

    In This Issue..

    * Red ink flows...
    * Japan suggests diversification for their reserves...
    * Commodity currencies rebound...
    * Data galore for the rest of the week...

    Good day... Chuck had a late night down at the ballpark watching the home run derby, so he asked me to take the helm of the Pfennig this morning. I'm going to try to get this one out a bit earlier than I did last Friday, so I'll get right to it.

    The biggest news to hit the markets yesterday was the Treasury Department's report that the deficit in June totaled $94.3 billion. This monthly deficit pushed the deficit for the fiscal year to over $1 trillion dollars for the first time, and we still have another quarter to go until the fiscal year ends in September. It comes as no surprise to readers that the deficit is above $1 trillion, but what is a bit unnerving is the speed at which the red ink is flowing....
  • 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....
  • Auction Week!

    * Currencies have a mini-rally... * Deficits do matter, eh? * Turning Japanese... * Gold fails to respond... ** Auction Week! Good day... And a Terrific Tuesday to you! Sometimes I'm right, and I can be wrong, my own beliefs are in a song... I just heard that great old song on the radio, and thought, that's a great credo to live by... Oh, well... That's just me I guess... Let's go to work! The currencies, led by the euro, made a valiant effort during the trading day in the U.S. yesterday to mount a rally, and they did! They have gained even more ground in the overnight markets, with the euro trading with a 1.27 handle... OK, I hear you saying... But, Chuck, tell us what pushed the currencies higher yesterday? Ahhh... Grasshopper... Of course I'll tell you that! Let me first set the table with the background story, then lead into the real meat with a building crescendo!...
  • Another Jobs Jamboree Friday!

    * A zero rate conspiracy? * Weekly jobless claims head toward 500K... * Turning Japanese... I really think so! * Mr. Yen speaks! ** Jobs Jamboree Friday! Good day... And a Happy Friday to one and all! I hope it turns into a Fantastico Friday, because it's not starting out that way. Technical difficulties would be the term used to describe my morning so far... I don't know if the Pfennig will go out on time this morning, as those "technical difficulties" have me working offline right now. But we'll see, eh? Well, it's a Jobs Jamboree Friday too! This should be quite the Jobs Jamboree too, as the ADP Employment report suggested the other day that this data could be even worse than the forecast -200K job losses for October. There have been more job losses in 2008, than you can shake a stick at, but yet the beat goes on for the dollar. Coming To America is the theme playing out in the currencies... Of which, I've explained over and over again, until I sound like a broken record....