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  • Brazil To Benefit From New Carry Trade?

    In This Issue..

    * The dollar fights back...
    * Government deficit spending deep sixes us...
    * Brazilian rate hikes on the table...
    * Round Two of the PPT thoughts...

    Good day... And a Thunderin' Thursday to you! Well... It's not really Thunderin' outside, but it is snowing, with about 3-4 inches on the ground already, and the snow coming down so thick that seeing is difficult. I made it here, but then I drive a car that was made to go in stuff like this! Pretty soon, my phone will begin to ring, with colleagues calling to ask me how the roads were...

    Well... We had more probing higher in the non-dollar currencies only to see the gains wipe away at the end of the day yesterday. Still, as I told a radio audience in Oregon yesterday, traders, investors, etc. still believe the euro is worth more than the dollar by quite a bit... Gold also gave back some gains overnight......
  • It’s A Jobs Jamboree Friday for 12/04/2009!

    In This Issue..

    * Commodity Currencies rebound...
    * Gold sees profit taking...
    * Canary in a coal mine...
    * It's Moving Day!

    Good day... And a Happy Friday to one and all! It's Moving Day for us here in the EverBank St. Louis office, as we will pick up our belongings and walk next door, to a larger, space, with some incredible views! We moved into this space 5 years ago, and we've been busting at the seams, with the threads holding on to dear life, for over a year now... So, this move is welcomed. Like I said the other day, in 1999, I sat in an office that we rented from the kind folks at Paylinx, and that was the beginning... From that tiny office to this! WOW!

    ...
  • The ECB Clash Over Policy Again...

    In This Issue..

    * Initial Jobless Claims rise...
    * PPI does too!
    * Euros get hung out on a line...
    * Gold makes a comeback!

    Good day... And a Thunderin' Thursday to you! It may not be Thunderin' where you are, but apparently it was yesterday in my little river town, as I heard we had some shingles blow off... And... It certainly is Thunderin' over in the Eurozone this morning, I'll tell you why in a minute. So, let's get going don't want to get caught in any of that Thunder!

    I finished the last of my 3 presentations yesterday, and called it quits, as far as walking back and forth to the Conference Center. They'll just have to do without me at the booth! But the presentation was good, I think, and I made some very important points. None of which, were brand new to Pfennig readers!...
  • Awful Data!

    In This Issue..

    * Weber opens Pandora's Box...
    * A record low for Capacity Utilization!
    * Do I hear a Chicken?
    * China's economy grows 6.1%

    Good day... And a Thunderin' Thursday to you! The 'Day After' Tax Day... It still hurts! And to think, one of these days, I'll be paying even more, thanks to the direction of our country... And you will be too! There's no two ways about it, the Deficit in funding in Washington D.C. which will be a result of all the spending, is going to require greater revenue... Where does the Gov't get the revenue? From taxes... Of course if it wasn't a debtor nation, it would not have to pay out the large sums of interest on the Treasuries it issues... But, that... Is a discussion for another day.

    The currencies saw more dollar strength yesterday, but it wasn't a result of anything the dollar had going for it... In fact, the results of the data yesterday was all dollar negative... No, this time it came from the Eurozone. Right about the time I was hitting the send button yesterday, European Central Bank (ECB) minister, Axel Weber Opened Pandora's Box of questions regarding future direction of the ECB... Let's go to the tape!...
  • Bad news for GM and Chrysler rallies the US$...

    In This Issue..

    * Bad news for car makers rallies the US$...
    * Yen comes back strong...
    * Singapore to devalue?...
    * German Chancellor Merkel gives warning...

    Good day... And good Monday morning to all of you. I can't believe March is nearly over, it seems as though it just started. March will end up being a pretty good month for the currency markets, as investors exited the safety of US treasuries and started moving funds back into higher yielding assets. But the markets continue to be volatile, and news released on Friday and over the weekend has sent these investors rushing back to the safe haven of the US dollar.

    The Japanese Yen and US dollar benefited after a US Government official said Friday that bankruptcy may be the best option for GM and Chrysler. The dollar continued to gain strength this morning after US Treasury Secretary Geithner warned yesterday that some financial institutions will need 'large amounts' of aid. When the Treasury Secretary says large amounts, you know it is going to be billions or trillions! Geithner was making the rounds of Sunday morning talk shows to try and justify the money already spent and prepare the taxpayers for another request of funds....
  • 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....
  • A Jobs Disaster!

    * Retail Jobs are cut in December! * Dollar rallies on renewed Trading Theme... * Looking for the Obama bounce... * High yielders get sold... ** A Jobs Disaster! Good day... And a Marvelous Monday to you! A grand weekend for yours truly with time spent resting, watching football, Alex play basketball, dinner with friends, and finally a wonderful dinner with my kids as we celebrated my oldest son, Andrew's, birthday. Whew! I'm at work about an hour earlier than usual this morning, as I couldn't sleep, and just decided to get up and come in... UGH! OK... Well, the big news this morning, is that the Jobs Jamboree was just awful, but "not as bad as some forecast" and therefore the dollar rallied. OK, I'm shaking my head in disgust too, but that's what the headlines reported later in the day on Friday, as the reason for the dollar rally. But let's get to the meat of the Jobs report... First of all, jobs lost in December were -525K, which was bang on the forecasts. But here's the two things I found to be very scary in the report... First of all, November's awful print of -533K was revised downward to -584K (recall, I questioned a month ago if it would reach -600K on the revision)... And here's the really scary number... -67K Retail jobs were cut in December... That's right, December! The month when retailers are supposed to be on fire!...
  • 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!...
  • 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!...
  • 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....
  • ECB to change dollar's direction?...

    * ECB to change dollar's direction?... * BOE leaves rates unchanged... * The worst is not over in US housing... * Japan's government signals expansion is over.. ** ECB to change dollar's direction?... Good day...The dollar continued its assault on the world's currencies yesterday as the dollar index moved above the 74 handle. I pulled a chart off the Bloomberg on my way out the door last night, and it showed the only major currency which was up vs. the US$ yesterday was the Swedish krona, which managed a .07% increase. This dollar rally has legs, but I still question the fundamentals behind the dollars surge. Today may be the day we see the dollar finally make a turn, as the ECB will be announcing their rate decision. It is not that I expect Trichet to raise rates, but I do expect him to sound hawkish and refocus the markets attention on Eurozone inflation and away from worries about growth. Two reports out of Germany this morning will bolster Trichet's hawkish stance. German exports rose more than economists expected in June, defying a stronger euro and pushing the trade surplus to a record. Exports increased 4.2% from may, the most since September 2006. German industrial production also increased for the first time in four months with output rising 1.7% from a year earlier. The IMF last month rose its forecast for German economic growth this year and said the global slowdown linked to the US financial crisis was less severe than it expected....
  • Fundamentals Rule!

    * Stocks fall 358 points! * Japan's inflation problem... * Profit taking in reals... * Buffett warns of stagflation... ** Fundamentals Rule! Good day... And a Happy Friday to one and all! Hopefully a Fantastico Friday too! It's the last Friday of June... Where did the month go? WOW! Next Friday, we'll be celebrating our nation's birthday... Can you believe that? The 4th of July? It just finally warmed up here in St. Louis, and it's already the going to be the 4th! Amazing... How the time flies when you're having fun! And Fun is what I'm having... With every day that passes, I get a little stronger, and another day further from the pain and problems of last summer... How could I not be having fun? OK... Well... Recall yesterday when I told you a Big Bank's chartist said the euro would top out at 1.5726, and that I hoped it would fly right by that? It did! It did! It did fly right past that! I love it when fundamentals rule! The euro has climbed to 1.5765 this morning as I write after spending most of the day yesterday taking liberties with the dollar. Another chartist said yesterday that the euro would re-visit the 1.60 level if it breached 1.5785... So, we've got that going for us, eh?...
  • Markets May be Saving it up for Today...

    * Consumption rose...* Inflation fell... * Swedish surplus... * Euro setting the tone......
  • Trichet Dashes Hopes of ECB Rate Cut...

    * Trichet dashes hope of rate cut... * Monster payroll numbers... * Japan leaves rates and appoints a new central bank head... * Game off for carry trade......