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  • ‘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.

    ...
  • Waiting On The RBNZ...

    In This Issue..

    * Currencies trade in a tight range...
    * Fed to keep rates unchanged till 2011?
    * Brazil GDP soars 9%!
    * Another glut of Treasuries to auction...

    Good day... And a Wonderful Wednesday to you! I had a first today on the way to work... I hit every green light! Now... I'm sure you are wondering why I would even have green lights at this hour of the morning... Me too! But they are there! And it was smooth sailing into work today... YAHOO!

    OK... Let's get serious, serious... The currencies traded in a tight range yesterday, with a brief mini-rally in euros, as the single unit rallied to 1.20, but that was short-lived. The rumor going around was that the Swiss National Bank (SNB) was intervening...

    ...
  • The Fed Keeps The "Extended Period" Wording...

    In This Issue..

    * Spain gets downgraded...
    * Fed keeps rates unchanged...
    * Interest rate differentials are back in play!
    * RBNZ keeps rates unchanged...

    Good day...And a Tub Thumpin' Thursday to you! What a great evening of jazz music last night, with my little buddy having two guitar solos in two of the 4 songs played...

    Well... No amount of soothing words from Germany was going to stop the tailspin of the euro yesterday, after S&P downgraded Spain's debt now... It's a European debt pandemic according to the people selling the euro like funnel cakes at a State Fair.

    The Euro states have to feel like they are getting treated like a red headed stepchild... (Ok, it's just a saying folks) by the ratings agencies... The PIIGS (Portugal, Italy, Ireland, Greece and Spain) are falling like dominoes that were all lined up......
  • Loose Lips, Sink Ships...

    In This Issue..

    * Greek PM stops currency rally...
    * Will Fed stop mortgage buying program?
    * Aussie jobs report is strong!
    * The history of a Pfennig For Your Thoughts...

    Good day... And a Terrific Tuesday to you! The monsoons are coming to the Midwest... I believe I saw the weather report for this area showing rain today and the rest of the week... I should leave my car outside, to get a 'wash'! HA!

    Well... During World War II, there was a saying, that, 'loose lips, sink ships'... I think Greek Prime Minister, George Papandreou, should have taken those words to heart yesterday... You see, the currencies, led by the beleaguered euro, were rallying, and the single unit was nearing 1.37, when Papandreou made a statement that sunk the rally's ship... He said that 'Greece's debt problems could soon spread to the rest of Europe and mean a weaker euro'...
  • Exceptionally Low For An Extended Period...

    In This Issue..

    * Old Trading Theme rises up again...
    * Currencies sell off then rebound overnight...
    * U.S. New Homes Sales Decline...
    * It's somebody's birthday today!

    Good day... And a Tub Thumpin' Thursday to you! Yes, it's me... I thought it best to cancel my San Antonio trip, so Jen can get to Florida to be with her family. This is the second time that I've backed out of speaking engagement with this private group, I sure hope they don't think I'm avoiding them!

    Front and Center this morning... It's Chris Gaffney's Birthday! So... This will be the 'Chris Gaffney Birthday Edition of the Pfennig'! Chris is 10 years younger than me, so yesterday when he said 'I'm an old man now' I about fell out of my chair! He's not even 50! Oh well...

    For Chris' Birthday, I'm going to buy him lunch, and... Talk briefly about the State of the Union Address, only to the extent of how it affected the currencies, and the FOMC statement yesterday, and other things... Just for Chris' Birthday! HA!...
  • Thin trading brings tight ranges...

    In This Issue..

    * Thin trading brings tight ranges...
    * Searching for the exits...
    * Mixed data in Europe...
    * Yen and Real make strange bedfellows...

    Good day...We had a pretty quiet 24 hours in the currency markets, with the majors all trading in a very narrow band vs. the US$. We will probably have a few more of these days during the next two weeks, as currency desks are manned by the backups and trading thins out. Many of the institutional investors will be moving to cash in order to preserve gains for their year end statements, and individual investors will have the holidays to take them away from the markets. Occasionally we will get a rogue piece of economic data which shoves the market one way or the other, but we typically won't see any long term positions being put on during the last two weeks of the year....
  • 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....
  • Riksbank Holds Off On QE...

    In This Issue..

    * Currencies trade in a tight range...
    * German Investor Confidence rises!
    * Thoughts from Jim Rogers...
    * Kohn on the economy...

    Good day... And a Terrific Tuesday to you! I'm staring at all this white space on the Pfennig template, and I absolutely drew a blank... I couldn't think of, or can't think of a thing to say! Whoa there partner! That can't happen! There's got to be something, anything, to talk about... OK! I'm back now, I really have no idea where that was going, it was an out of body experience! HAHAHAHA!

    OK... The currencies traded in a very tight range yesterday, after the dollar had ambushed them on Friday and in the Sunday night trading sessions. It's been a week since we saw currency strength, other than Japanese yen. So, we should be due for a bounce. There continues to be more whispering about the eventual dollar weakness, but for now, it's not enough to get us back to where the dollar should be trading on a fundamentals basis....
  • 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......
  • A New Year!

    * Currencies range trade... * With a bias to buy dollars... * Recession deepens in Eurozone... * India cuts rates... ** A New Year! Good day... Happy New Year! And a Happy Friday to one and all! A Fantastico Friday, I bet it will be, as most people are still on "holiday". I hope your New Year's celebration went well, mine did, spent with good friends, after a simply scrumptious dinner! Yesterday, we spent the day with friends again, as good friend Rick, had everyone and their brother to his new house to celebrate the New Year... I'm worn out! Good thing this is a quick shot work day, and then onto the weekend, because I'm spent! Well, enough of all that! The currencies traded in a very tight range on Wednesday, and I expect more of that today. The bias has been to buy dollars going into the year-end, and it looks as though that might be the case today, as there's been no data to speak of in the U.S., while the Eurozone printed a very weak manufacturing index report, indicating that the Eurozone's recession is deepening. Of course if we compared apples to apples the bias would be to buy euros, but since there hasn't been any "real" economic data in a couple of days from the U.S. this report from the Eurozone gets all the attention....
  • Fed brings rates down to near zero...

    * The Fed fires its last bullet... * Euro breaks back above $1.40... * AUD and NZD rally... * Happy Birthday Jen... ** Fed brings rates down to near zero... Good day... The 'noise' from the street which I wrote about yesterday turned out to be correct, as the FOMC cut 75 basis points to put the Fed Funds target at .25%. The US now has the lowest interest rates in the industrialized world, even below those in Japan. The dollar lost ground quickly after the announcement and continued to fall overnight to a 13 year low vs the yen and the weakest vs. the Euro in 4 months. With both Chuck and Frank out of the office, I fielded the calls from reporters after the FOMC cut, and the most popular question asked was what the near zero interest rates would mean for the man on the street. Well it was great news for those on Wall Street, but I told the reporters that the rate cut really wouldn't have much of an impact on US consumers. After all, interest rates at 1% weren't stimulating the banks to start lending so why would .25% rates cause any change?...
  • Waiting on the FOMC meeting...

    * FOMC to cut further... * Bernanke turns his back on inflation... * Kiwi and Australia rally... * Gold continues to shine... ** Waiting on the FOMC meeting... Good day...and welcome to another week, hopefully the currency markets can continue their assault on the dollar which began a few weeks ago. The dollar index peaked back on November 21, and with the exception of a few days around the beginning of December, the greenback has consistently fallen vs. most of the major currencies. Friday was no exception, and the dollar continued to give back gains over the weekend with the Euro climbing back over $1.35 for the first time in two months....
  • 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....