Daily Pfennig

A free, quick-reading daily e-letter on world currencies, economic trends, and the occasional baseball score.

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  • Bias To Buy Dollars Remains In Place...

    In This Issue..

    * Some healing in the currencies...
    * What's a dead cross?
    * Norway, S. Africa and Norway rally...
    * U.S. deficit spending continues...

    Good day... And a Terrific Tuesday to you! I'm Back! Boy, was that ever a great idea that our little Christine had a couple of weeks ago, when she heard my schedule... 'you should take off that Monday'... Yes sirree Bob! That was the best idea I've heard in a month of Sundays! So... As you can see, or will see soon, I'm full of you know what and vinegar this morning... Let's get going on this Terrific Tuesday!

    Well... Front and Center this morning, the non-dollar currencies have seen some healing... Some, not much, but some... But these mini-rallies are on tenterhooks folks, they can be reversed in a New York Minute... And, now that I look back at the screens, that's exactly what's happening! UGH! These turn-arounds are beginning to give me a rash!...

  • The dollar holds on..

    In This Issue..

    * The Dollar holds on...
    * Pimco is buying Brazilian bonds...
    * Surprising data from the Economist...
    * Chuck's thoughts from Orlando...

    Good day... Chuck spent an extra day in Florida, so he stayed home to recuperate today. I made it home Saturday night, and was a bit shocked by all of the ice and snow which covered my truck at the airport. I heard so much about the winter storm which rocked the east coast that I forgot to check the weather here at home. I am a bit behind this morning, as I stayed up a bit celebrating the Saints victory with friends.

    The dollar bulls were celebrating again on Friday, as the dollar rally continued. The recent strength in the US$ will probably continue this week, as it looks like it will be fairly uneventful as far as data releases. We won't have any reports out in the US today, and tomorrow will only bring the wholesale inventory number. Wednesday we will see December's trade balance along with the monthly budget statement for January. Both of these numbers will likely reflect an ever-growing deficit here in the US, with a 50 billion dollar monthly budget deficit, and a trade deficit just below 35 billion....
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  • Weekly Job Losses Continue To Pile Up!

    In This Issue..

    * Back to the 'safe haven' trades...
    * The dollar hammers the euro!
    * It's a Jobs Jamboree Friday!
    * The SNB sells francs...

    Good day... And a Happy Friday to one and all! It's a draggin' the line Friday for me, but I'll make every attempt to turn it into a Fantastico Friday for sure! The Big Stock Sell off that I've warned about since probably June of last year, looks like it has finally arrived... Bringing with it, my biggest fears, that the link between all the risk assets, had not been broken completely, and this link has turned into a bloodletting on currencies and commodities...

    OK... So I got that out of the way, front and center this morning! You know... Ever since I began writing about a Big stock sell off, I told you that, should the link remain in place, and the currencies and commodities have adverse reactions, then we would come to the fork in the road... The people that bought currencies and commodities to keep up with their neighbors, in hopes of being able to brag about their returns at the next bar-b-que, will panic and sell, making the sell off even worse... The people that bought these risk assets for the 'right reason', which was to diversify their investment portfolios, so that not all their investments were denominated in dollars, and to provide a hedge against further potential losses by the dollar, and to reduce their overall risk for their investment portfolio, will just batten down the hatches, hunker down, and ride this out... And... If any thing, look to pick up more of these risk assets at cheaper levels as we go along......

  • Global Growth Takes A Hit!

    In This Issue..

    * Back to the 'safe haven' trades...
    * The dollar hammers the euro!
    * ECB & BOE meet today...
    * Brazilian games with the real...

    Good day... And a Tub Thumpin' Thursday to you! On one hand it's tub Thumpin' because I'm here in what was sunny Florida yesterday... And on the other hand, it's not tub Thumpin' because I'm here in Florida! Yeah, writing on the road is not one of my fave things to do, but I'll struggle through it...

    Well... The news that Chris brought to you yesterday, regarding the mini-rally in the currencies, led by the euro climbing back to 1.40, was completely washed out by the time the wheels on his plane touched down here in Orlando yesterday afternoon. Chris had said as he signed off that the dollar was being bought right then, and he was right... And that buying of the dollar lasted all day!...

  • Euro moves back over $1.40...

    In This Issue..

    * Euro moves back over $1.40...
    * Norges bank to hold steady...
    * Pound moves up...
    * Investors move toward high yields...

    Good day...And a Wonderful Wednesday to everyone. It is another Great Day at EverBank! I am heading out to Orlando with Kristin later this morning, and still have a lot to get done before I head out the door, so I'll keep this pretty short and sweet.

    The Euro moved back above the $1.40 handle overnight after it was announced the EU would back Greece's plans to cut its budget deficit. European Commission President Jose Barroso said the EU is endorsing the Greek program and relayed confidence in the Greek authorities. The move came after the Greek government announced more measures to reduce the shortfall. The EU will demand monthly updates from Greece on its progress in cutting their deficit from the current 12.7% of GDP down to the EU's 3% limit by 2012. The approval of the plan by the EU does not mean the union will be backing Greek debt with loans and does not insure against a default, but only allows Greece to continue to be part of the EU despite their large deficits....

  • Governor Stevens and the RBA surprises the markets...

    In This Issue..

    * Dollar slides as risk returns...
    * RBA surprises the markets...
    * Gold moves higher...
    * Obama offers up record deficits...

    Good day... And a happy Ground Hog day to everyone! Yes, today is the day Phil decides if we are going to have more winter weather or a quick spring. While I can find something to like during all of the seasons, I do find myself hoping we see a quick end to the cold weather as we turn the calendar over to February. Unfortunately, the folks who make a living predicting the weather don't believe we will get an early spring this year, but their record is about as good as Groundhog Phil's, so we will just have to wait to see what Mother Nature brings us. Kristin and I will be joining Chuck down in Orlando tomorrow, so hopefully a few days of warm weather will hold me over until April....

  • 5.7% Growth In The U.S.?

    In This Issue..

    * Currencies get sold VS the dollar...
    * A Budget Deficit of 10.6% of GDP!
    * 4 Central Bank meetings this week...
    * A lost decade of employment...

    Good day... And a Marvelous Monday to you! In addition, welcome to February! The looooonnnnngggg month of January finally came to an end yesterday. We'll begin to see the daylight last a little longer each day in February, and that's a good thing! I've got trips to Orlando and Arizona this month, so that should break the month up, and hopefully it will be March before we know it!

    Well... According to the U.S. Gov't statistics, we have nothing to fear any longer with regards to our economy, inflation, deficit spending, interest rates, etc., for you see, the 4th QTR GDP had a preliminary print of +5.7%! It's all seashells and balloons for us now folks... That's what the cable news guys said, and that's what's all over the news wires... Forget about saving, go out and spend, everybody's doing it, they say! Just fork over those Gold coins, there's no reason to buy them any longer, for everything is fine here in the U.S.... There's nothing to see here, move along......

  • 3 Million Foreclosures Forecast For 2010!

    In This Issue..

    * Dollar is in the drivers seat on rate forecasts...
    * And I'll debunk those forecasts!
    * Bernanke gets re-confirmed...
    * The PPT revisited...

    Good day... And a Happy Friday to one and all! A Fabulous Friday in my book so far... The wind is blowing so hard outside that the door to the building wouldn't open for it was opening against the wind! Have I told you all recently how much I dislike cold weather? I gotta go where it's warm! And... Hopefully I will next week, when I head to Orlando for the Money Show... Last year, it was cold there too, so I was very disappointed! But back in the day when Alex was young, we used to go early, and spend a few days at Disney World, we always had warm weather then...

    OK... Another day, another day of listening to dolts talk about rate hikes coming in the near future for the U.S. I'm going to go into the reasons, and please notice, I have an "s" at the end of reason, in a bit, for why I think these people are showing their doltness...

    ...

  • 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!...

  • FOMC Day Today!

    In This Issue..

    * Markets in 'lock-down' mode...
    * Aussie Consumer inflation rises...
    * Brazilian Central Bank meets today...
    * David Galland and Bill Bonner together!

    Good day... And a Wonderful Wednesday to you! We're back to the frigid temps here in St. Louis, but, Shoot Rudy, IT IS January! So, I'm going to warm you up today with a collection of thoughts, not only mine, but a couple of my fave writers... David Galland, and Bill Bonner! WOW! A Dynamic Duo of writers if there ever was one! So... Let's get to the goings on in the currencies and then hit the collection of thoughts!

    When I signed off yesterday, the dollar was swinging the hammer, and all the non-dollar currencies, except Japanese yen, were getting nailed... That hammer swinging ended in the morning session here in the U.S., and the currencies did rebound a bit VS the dollar as I headed out the door for home... Overnight, we've seen no movement at all... Nothing, nada, zero, zilch, a great big goose egg, for currency movement......

  • The Mini-Rally For Currencies Continues...

    In This Issue..

    * Euro takes baby steps higher...
    * Canadian Retail Sales disappoint...
    * Oil price plunge hurts petrol currencies...
    * Brazilian real drop on Wealth Fund selling...

    Good day... And a Marvelous Monday to you! Well... We made it through the weekend, here at the Butler house, just Alex and me. Had some visitors (friends) stop by Friday night, but after that, it was just us two. Good games yesterday, eh? I had all the snacks out on the table, and thought the older kids would stop by to watch games with us, but, that was a wasted effort on my part, as they did not, and then I had to clean all that up!

    Well... On Friday, the currencies kept with their mini-rebound VS the dollar, for the most part, as the Big Dog, euro crept higher and higher, but in tiny, baby steps for sure! It's as if traders are wanting to take the euro higher, and sell the dollar, but they just aren't sure, right now...

    Stocks got hammered on Friday in reaction to the President's proposed ban on proprietary trading in Banks... You know, it occurred to me that the Gov't does this, the media does this, and now I've gotten too lazy and do it... And that's to say 'Banks'... What they mean here are the investment Banks, like the Goldmans and the Morgan Stanleys... And yes it does include 'real' banks, but for the most part they are the ones that do more on the investment side than they do on the deposit side......
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  • Beating Up The Banks...

    In This Issue..

    * Risk is back on!
    * Another plan by the President to punish banks...
    * Foreigners to back away from U.S. assets/ dollars...
    * Eurozone Industrial orders rise 1.6%!

    Good day... And a Happy Friday to one and all! Let's see if we can make it a Fantastico Friday! Of course last Friday will be a tough one to top for a long time, given it was pay-day, a Friday, the start of a 3-day weekend, and the temperature went above freezing! But, today is a Friday, so I'll do my best to make it a Fantastico Friday! It will be difficult while I'm writing today though, because, our Gov't just keeps shooting themselves in the foot, and it just ticks me off that they don't say, 'hey, I/we caused this, and we'll fix it', instead opting to find someone to blame, or 'deflect' the problem... I'll explain as we go along today...

    Well... Front and Center this morning, we saw the Risk Aversion that had held a tight grip on the currencies and commodities for about a week, fade a bit as the day went on yesterday, and the dollar selling has carried through the overnight and morning sessions overseas... What caused this 'turn-around?' I hear you asking... Ahhh grasshopper, come sit, and put away the sharp objects!

    ...

  • China's GDP Soars 10.7%!

    In This Issue..

    * China has strong 4th QTR growth...
    * Time to let the renminbi gain VS the dollar...
    * Debt Ceiling is getting raised $1.9 Trillion...
    * Russian Central Bank is buying loonies...

    Good day... And a Tub Thumpin' Thursday to you! Another day of dollar strength, in this switch from risk assets to dollar denominated assets... Again, I question the mental giants behind all this, for the U.S. is what caused this problem... And now traders turn to the U.S.???? Oh well, sure seems like it would be different if I were in charge! Of course, a LOT of things would be different if I were in charge! But that's a discussion for another day!

    Yesterday's Pfennig could set a record for the length, I think! So, I promise I won't go that long today!

    Front and Center this morning, we have the news overnight from China that their 4th QTR GDP accelerated to the fastest level since 2007... Chinese GDP for the 4th QTR was +10.7%!!!!! Talk about 'nailing' that call! The annual figure for China comes in at +8.7%, but in reality, who cares about the 1st QTR, when in the 4th and most recent quarter, growth was kicking tail and taking names later! In addition, China posted a higher consumer inflation figure than expected at +2%... And Retail Sales in China soared 16.9%! WOW!...

  • China Puts The Brakes On!

    In This Issue..

    * Risk Aversion sets in, on China's moves...
    * Now, we know what's going on with the TIC's!
    * Germany to step in to save Greece?
    * Honkers losing value VS the dollar...


    Good day... And a Wonderful Wednesday to you! As I understand it, we are in for some Monsoon like rain today and the next couple of days... Living in a little river town, and having a creek at the back of my property, lends itself to cause me to worry when I hear things like Monsoon like rains expected... But... It's mother nature, I can't do a thing to stop it, so, I carry on... But worrying while I carry on!

    The rain is falling on the currencies too... The dollar has rebounded very quickly the past few days, and there are no roadblocks right now. The risk takers in the markets are running for safety again, sent running by China's decision to curb lending and attempt to slow growth before their economy overheats......

  • German Investor Confidence Fades...

    In This Issue..

    * The dollar rallies on weak German data...
    * Stronger overall data for the U.S. last week...
    * JAL files bankruptcy and yen rallies...
    * Bank of Canada meets today...

    Good day... And a Terrific Tuesday to you! I hope you all had the opportunity to enjoy a 3-day weekend... I realize that not everyone has the opportunity, so I don't want to sound like I'm rubbing it in... It's really foggy outside this morning. I live in a little river town outside of St. Louis, and we get fog there all the time, but once I cross the river, it dissipates quickly... But not this morning, the fog was with me all the way to work! Something right out of an old-time horror movie with Lon Chaney...

    Well... Yesterday, I was doing quite a bit of reading, after suffering 'football overload', which by the way, were not very good games... Sure, good for the winning teams' fans, but I didn't have a dog in any of those fights, so I just wanted to see a good game, only to be disappointed... OK, now back to my reading...

    I was reading a good, thoughtful story about how currency swings could be dying down, as we return to fundamentals... You know, me... I jumped from my chair, and click my heels together in joy! OK, no, I'm not physically able to do that any longer, so I did it in my mind! But a return to fundamentals? I'm all over that like a cheap suit! One of the fundamentals that the story highlighted that would be taken into consideration by traders, would be interest rate differentials... Which, I've always considered to be a strong reason to own a currency, but not the 'end-all'......
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