Search results matching tags 'Employment' and 'Norway'

US consumer confidence on the rise...

ChuckButler — Wed, 31 Mar 2010 15:34:00 GMT

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In This Issue..

* US consumer confidence on the rise...

* Improved labor markets could bring higher US rates...

* Norway has a good day...

* Frank heads to Vancouver and begins his blog...

And Now... Today's Pfennig!

US consumer confidence on the rise...

Good day, the last day of March is finally here. March was a good month, but I like the sound of April as it brings us warmer weather and the opening day of the baseball season. While there was a lot of talk about the fall of the Euro during the past month, March actually turned out to be a good month for currency investors. The Euro was down slightly (.58% v.s the US$) but it was only one of 4 currencies which dropped vs. the dollar. The biggest loser in March was the Japanese yen, which was down 4.52%; but none of the other 4 currencies were down more than .6%. The top performers were the high yielders of the South African rand and Mexican Peso, both of which were over 3% higher vs. the US$ during past month. March was also a good month for the commodity based currencies of Canada, Australia, and New Zealand.

Investors had a lot to digest during the past month, but stayed amazingly up beat in spite of it all. Confidence in the global recovery continues to strengthen, as shown by the Conference Board's confidence index which rose to 52.5, exceeding the forecasts of most economists. The report, released late yesterday morning, sent the stock markets higher and the dollar lower. We have settled back into the 'carry trade' pattern which pushes the dollar lower whenever we get good data in the US. As I have explained, international investors have 'parked' funds in dollars while the try and figure out what is going on. Good news from the World's leading economy calms their fears, and these investors go looking for higher yields, selling their dollars.

Global investors will be looking at today's release of ADP Employment change for a clue on where the labor market in the US is heading. Economists predict the report will show a 40k gain in the number of jobs created, and will use this figure as an indication of what the monthly jobs numbers will look like when they are released Friday morning. If the ADP numbers are positive (and that is a pretty big IF), it will be the first increase since January of 2008. Economists are also predicting a big move higher in Friday's numbers, with the median forecast expecting an increase of 185k jobs for the month of March, the most in three years.

Bernanke and his cronies at the FOMC have said an improvement in the labor market is all they are waiting on to start increasing rates. So if the data comes in as projected, the expectations of higher interest rates in the US will rule the markets. With the EU locked in a struggle to rescue some of their weaker members, increased odds of an early interest rate rise in the US will push the dollar higher vs. the euro and other 'lower' yielding currencies.

But with all of these VERY rosy projections, the risk to the markets is that these numbers disappoint. We continue to feel the US recovery will be a slow one, and don't expect the labor markets to quickly recover. Without stronger jobs data, the FOMC will leave rates low in order to ensure the recovery. But that is just my opinion, and if the jobs data does show a strong move higher in new jobs, the markets will probably take the dollar higher.

Data released in Europe this morning showed consumer prices increased 1.5% in March from a year earlier, after a .9% gain in February. That is the highest inflation rate since December of 2008 and topped the economists' forecasts. A separate report showed the unemployment rose to 10 percent in February, the highest since August 1998. The combination of these two reports is a bit troubling for Europe, as they would appear to be risking a move toward stagflation, with a bad combination of high unemployment and high inflation rates. It continues to be a race to the bottom for the US and Europe, and right now it looks as if Europe is pulling ahead.

But not all of Europe is stagnating. The Swiss franc rose overnight as the nation's leading economic indicators rose in March to the highest level since November of 2007. The indicators aim to predict the Swiss economy's direction about six months ahead, and increased to 1.93 from a revised 1.9 in February.

The markets also got some good news from Norway with the release of retail sales for February. Norwegian retail sales rose .3% after falling in the previous month. Norway is one of our favorite currencies because of their strong commodity based economy and their solid fundamentals. Norway is the world's second richest country per capita and was able to pull through the global economic crisis with a milder recession than many of its industrialized rivals. Unemployment in Norway fell to 3.1 percent in March and consumer confidence is at the highest level since the first quarter of 2008.

This morning's news pushed the krone higher, topping off a nearly 1% increase vs. the US$ over the past 24 hours. The krone is still down 2.5% on the year, so investors still have the opportunity to add it to your currency portfolios at relatively good levels.

I was reading the latest edition of Chuck's 'Currency Capitali$t' newsletter last night, and enjoyed seeing a long article on Norway by my former co-worker Ashish Advani. In the article, Ashish points out that Norway continues to run a budget surplus, and also has a fully funded pension system. He also stresses the fact that Norway is not part of the EU and is therefore shielded from the problems or potential problems with the PIIGS. If you haven't checked out the Currency Capitalist, I would encourage you to give it a look: www.worldcurrencywatch.com .

But back to Norway. The central bank was first to start raising rates in the Northern hemisphere, but kept its benchmark rate unchanged last week. We expect the Norges bank to resume interest rate increases at their next meeting, and the recent data lends support to this thought. With a solid economy, and rising interest rates, the Norwegian krone could be one of the stars of 2010.

Gold had a volatile 24 hours, dropping $10 dollars through the trading day yesterday but rallying back up in early European trading. The market perception that US interest rates will be rising held down demand for gold yesterday. Gold is still seen as a hedge against inflation, and higher interest rates will keep inflation in check so gold is not as sought after. The higher rates also make gold more 'expensive' as there is a cost of carry for gold which does not generate any interest income.

Precious metals is an important part of portfolio diversification, and we encourage investors to hold at least some of the metals. The recent volatility in the markets could give you an opportunity to add to your holdings at what will eventually be seen as cheap levels.

Jennifer, who has been handling all of our trading with Chuck out; just informed me that today is the last day for 'unallocated' gold trades until next Monday. So if you plan on making a move into or out of our Gold or Silver accounts, I would encourage you to call today, or you will have to wait until after the Easter weekend.

I'll end today's Pfennig with a note I got from the big boss, Frank Trotter last night:

I'll be heading out to the MoneyShow in Vancouver next week to give two speeches - if you are in the neighborhood stop by to see Kristin or Kathleen or me on Wednesday and Thursday. As longtime readers know both Chuck and I think that Vancouver is one of the most beautiful cities around and I am excited to be there at least twice this year.

One of the things I'll talk about is the distribution of money in the USA and how that will likely impact future government policy in a negative way - at least for the US dollar. This is a moral hazard where many families believe (key word "believe", they don't "think") that they don't need to save, are incented by the government to spend, and anyway if they don't save they'll get a bailout down the road. This spells more government spending in the future for me, and a further deterioration of fiscal policy at the national, state, and local level from either side of the aisle.

I have added a short article on this in my http://www.FrankatEverBank.com blog under the thrilling title of "Investable Asset Distribution Declines". FrankatEverbank and the associated Twitter handle of the same name has just been launched and I wanted the loyal Pfennig readers to see it first. This is not a replacement for, nor a competitor to the Pfennig - I'll still be reading that every day and you should too. It is a place where I can comment on a number of broader topics in banking, the economy, security, and building wealth. Along those lines if you have particular questions you want to see addressed there is a "Have a question?" section on the blog or just reply to this email; I won't hit every topic but this is sure to spur some conversation you can carry out within the blog. Now go save some money!

I have worked with Frank for over twenty years now, and I have always valued the opportunity to sit down and discuss current events with him. He is one of the smartest guys I have ever met, and I'm not just saying that because I work for him! Now all of you can pick his brain also. I look forward to seeing where the discussions on his blog take us. Now on to the currency wrapup:

Currencies today 3/31/10: American Style: A$ .9168, kiwi .7097, C$ .9851, euro 1.3482, sterling 1.5163, Swiss .9442, European Style: rand 7.3368, krone 5.942, SEK 7.2038, forint 197.33, zloty 2.8637, koruna 18.8661, RUB 29.458, yen 93.37, sing 1.3992, HKD 7.7641, INR 44.9163, China 6.8259, pesos 12.3554, BRL 1.7898, dollar index 81.48, Oil $82.90, 10-year 3.86%, Silver $17.512, and Gold... $1,110.15

That's it for today... That is it for me this week, I think Mike Meyer will be brining you the Pfennig tomorrow and Chuck should be back in the saddle on Friday. I have really enjoyed brining you the Pfennig over the past month, thanks to Chuck for letting me Pfill in! The weather man says today is going to feel a bit like summer here in St. Louis. I took my daughter, Lauren to the Blues game last night and we got to see a rare home win! They still have a statistical chance of making the playoffs, but will be needing some help from the teams in front of them. I hope everyone has a Wonderful Wednesday and great Easter weekend!! I'm outta here!!

Chris Gaffney, CFA

Vice President

EverBank World Markets

1-800-926-4922

1-314-647-3837

Dollar continues it’s slide...

ChuckButler — Fri, 31 Jul 2009 14:45:32 GMT

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In This Issue..

* Dollar continues to slide...
* US GDP contracts but not as fast...
* Nordic currencies outperform...
* Japanese yen continues to fall...

And Now... Today's Pfennig!

Dollar continues to slide...

Good day... The last day of July is upon us. Time just seems to keep moving faster as it seems summer just got started. The fall of the dollar also accelerated yesterday as investors moved back out of the 'safe haven' of US$ and continued to shop for more yield. The greenback tried to stage a bit of a rally in early European trading, but has fallen back off again as I sit down to write the Pfennig.

I got a call from a Reuters reporter yesterday mid morning to ask why the dollar was rallying at the same time stocks were moving higher. I quickly paged through my Bloomberg looking for some sign why both were heading higher. The trading pattern which has been established over the last few months has these two asset classes moving in opposite directions; good news for the US economy sends stocks higher and the dollar lower as investors retreat from defensive 'safe haven' positions in the US$. The opposite occurs whenever there is data which shows the global economic recovery is faltering, stocks move lower and the dollar rallies with safe haven buying.

But yesterday morning, for a short period both were moving up. I first looked at the jobs data to see if they held any clues. The Initial Jobless claims came in slightly higher than expected, confirming our calls that the labor market will continue to be a drag on the US economy. But the reporter pointed out the continuing claims has dropped. I explained to her that the continuing claims were dropping because people are falling off the rolls. Drops in continuing claims are not due to people going back to work, but are due to people being out of work longer than the labor department's records. So I didn't see anything in the jobs data which would cause stocks to rally.

Unable to find anything in the data to support the short term market movements, I moved the conversation to the longer term trends which I feel much more comfortable speaking about. And by the time the conversation was over, the quick rally in the dollar had subsided, and the dollar index was moving back down. The short term market movements are very hard to call, as the currency and equity markets can move on emotion and rumor for short spans of time. But they will always move back toward the underlying trend line. Right now, the trend is for the US$ to weaken vs. the major currencies; as investors begin to look for currencies with higher yields and better underlying fundamentals.

So the dollar continued to fall vs. every currency except the Japanese yen. The Nordic currencies of Sweden and Norway led the charge vs. the US$ with Sweden moving up over 1.5% and Norway appreciating just under 1%. As I wrote yesterday, the Swedish krona has been one of the best performers recently as their economy has begun to recover ahead of mainland Europe. Sweden's central bank, the Riksbank, was more aggressive with rate cuts than the ECB, so they will now have more room to increase them as the global economy recovers. Like Norway, Sweden went into the global recession in a fundamentally solid position, with a good trade surplus and low national debt. But Norway seems to be a bit better positioned going forward, as they rely on commodity based exports and while Sweden is geared more toward manufacturing. Both should continue to move higher vs. the US$.

The focus today will be on the 2 quarter GDP report which will be released this morning. GDP is expected to have contracted 1.5% after a 5.5% contraction in the first quarter. If the number comes in as expected, the dollar will likely sell off as investors move back into riskier assets. But as I mentioned earlier, the currency markets have started to show signs of moving away from the safe haven / risk aversion pattern recently. Investor's focus will eventually shift toward interest rate differentials. But I still think it is a bit too early for this shift to occur, and a stronger GDP figure will likely cause a further drop in the US$.

We will also see Personal consumption data for the second quarter which is expected to show US consumers are continuing to increase savings. Consumption is expected to have fallen .5% after rising 1.4% during the 1st quarter. In spite of government efforts to stimulate spending, US consumers are worried by rising unemployment and won't likely loosen their tight grip on their wallets anytime soon. Finally, we will end a busy week of data releases with the Chicago Purchasing Manager's index which is expected to show a slight increase to 43 from 39.9 reported last week. This would be a second consecutive monthly increase, a sign that the manufacturing sector is bottoming out. Even though the number continues to move higher, any number below 50 is seen as a negative indication for the economy. Even with inventories near record low levels, manufacturers will likely wait for consumers to start spending again before increasing production.

The pound sterling continued to rise against the dollar after a report showed British consumer confidence held at the highest level since April of last year. It seems the pound sterling has moved to a upward trend, after dropping most of last year.

The Japanese yen continues to fall vs. the US$ as investors sell the currency and move to higher yielding assets elsewhere. Japan's unemployment rate rose to a six year high in June and consumer prices fell at a record pace. The Japanese economy continues to be stuck in a stagnant deflationary state and will be dependent on a global economic recovery to spark exports. Increasing growth in other Asian nations (mainly China) has sparked production increases by Japanese manufacturers. This has been the one positive sign out of Japan recently, but this one piece of data couldn't halt the selling of the Japanese yen.

Elections in Japan will be held at the end of next month, and the opposition party is all but guaranteed to win. The ruling Liberal Democratic Party is in a shambles, and has produced 4 prime ministers in the last 4 years. The new government is expected to increase spending on government programs, but like the US administration, no one has figured out how to pay for these increases. The opposition's spending proposals add up to 3.5% of GDP, and the party has ruled out raising Japan's 5% consumption tax for at least 4 years. Much of the funding for the new programs will come from cutting 'waste' in existing spending programs (sound familiar?). Gross national debt in Japan is currently 180% of GDP and rising as the stimulus packages kick in.

Many factors in the Japanese economy are eerily similar to those in the US, and neither looks to recover quickly. Both the US$ and the Japanese yen will continue to be sold as investors move into currencies of countries with much better economic potential. The short and medium term prospects for these two currencies certainly look negative.

Two currencies which seem to be on a much different path than the Japanese yen are the Australian and New Zealand dollars. Both are headed for their longest set of monthly gains since 2004. With interest rates expected to start rising, and China continuing to consume commodities which both produce, these currencies should continue to perform well. Barclays Capital raised their forecasts for both currencies saying rising risk appetite will boost demand for them in the short term. "A better than expected US GDP result would be the final icing on the cake for July and would provide great opportunity for the Australian dollar to retest 83.38 cents," according to the report.
Currencies today 7/31/09: A$ .8284, kiwi .6561, C$ .9269, euro 1.4139, sterling 1.6552, Swiss .9231, rand 7.804, krone 6.1628, SEK 7.2825, forint 187.92, zloty 2.9328, koruna 18.089, yen 95.70, sing 1.4405, HKD 7.7500, INR 47.935, China 6.8321, pesos 13.2126, BRL 1.883, dollar index 78.966, Oil $66.81, 10-year 3.61%, Silver $13.63, and Gold... $938.42

That's it for today... The EverBank kickball team played or final regular season games last night and ended up victorious in both. More importantly, we were able to make it through both games without an injury! We finished in third place, so we will have a pretty good seed going into the end of season tourney. Happy Birthday to Ann Hopkins today! I have worked with Ann off and on since I started in the banking industry back in the late 80's, and she is a real treat to have on the desk. Hope everyone has a Fantastic Friday, and a wonderful weekend!!

Chris Gaffney, CFA
Vice President
EverBank World Markets
1-800-926-4922
1-314-647-3837

Currencies Continue to Rally...

ChuckButler — Fri, 24 Apr 2009 16:08:07 GMT

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In This Issue..

* An auction announcement...
* Euro soars!
* Gold back to $900...
* Who's telling the truth?

And Now... Today's Pfennig!

Currencies Rally...

Good day... And a Happy Friday to you! A Fantastico Friday to boot! I leave for Bermuda very early tomorrow morning, so no late night shenanigans for me tonight! HA! I'm still trying to make sure I've beaten that pneumonia, and being a "good boy"!

Well... Front and center this morning, we have a Big currency rally going on... Recall yesterday, I told you of the beginning of the rally... Well, it really got legs as the day went on, and once again, it was not sold off overnight, but added to! Here's what I believe, and you won't see this anywhere else, my friends, is moving these currencies so violently higher VS the dollar...

First, let me set the stage... I've been carrying on about how the Deficit Spending here in the U.S. was going to require a TON of Treasuries to be sold to finance that Deficit Spending... I even told you the other day that the U.K. Gilts were getting clobbered because of the largest Budget Deficit in the U.K. since World War II, and that what happened in the U.K. had been carrying over to the U.S.... OK... Got the picture, right?

Well... Yesterday morning the U.S. announced that they would sell Treasuries in these amounts, and tenors... $40 Billion 2-year, $35 Billion 5-year and $26 Billion 7-year next Monday, Tuesday, and Wednesday respectively... OMG! That's over $100 Billion in new Treasury issuance that the markets are going to have to digest... Is it the straw that breaks the proverbial camel's back? Are the markets saying, "we don't believe you will be able to successfully auction that amount without aggressively raising the yield?" I think so... Now, see if CNBC, MSNBC, FBN, CNN or any of the other media stations run this story!

There's nothing else THAT BIG that could have moved the euro like this... Oh! I haven't even told you where the single unit is trading this morning! My Bad! 1.3230! That's right... It skipped to my Lou right through the 1.31 handle, like a hot knife goes through margarine! The euro did get an additional boost this morning when it was announced that German Business Confidence, as measured by the think tank IFO, rebounded from a 26-year low this month...

So... Let's slow down, those beginning paragraphs have me out of breath! OK, I'm calmed down now... So, let's look around the horn to see what the other currencies are doing, now that the BIG DOG, euro has left the porch to chase the dollar down the street. Well, the usual suspects like the euro-alternative currencies like Norway, Sweden, Switzerland are all much stronger VS the dollar this morning... And a look to the High Yielders, shows that they too have moved in step with the Big Dog.. Aussie, kiwi, rand, and real are all taking liberties VS the dollar.

There's another high yielder that I don't talk about all the time, and the last time I did, I gave it the kiss of death, watching it fall a couple percent after I mentioned it... The Indian rupee... Well... The rupee is on the rally tracks again, and this time, someone other than me is noticing... The folks over at Reliance Equities International have noticed that the Indian stock market has risen for 7 straight weeks, and believe that they will see additional flow into this market... Therefore they believe the rupee may be in store to gain 6.7% in the coming weeks... Now, for you big swingers out there... 6.7% probably doesn't even show up on your radar... But for all the rest of us, worried more about the "Return of Capital, rather than the Return on Capital" these days... That doesn't sound too shabby!

On the data front yesterday we had the Initial Weekly Jobless Claims, which came in as expected, which doesn't make it any better! The total of unemployed people filing claims last week totaled 640,000! Something that most people don't look at, but I've trained the folks here to do, as Chris Gaffney yelled out yesterday morning... "Continuing Claims are awful, they have risen to 6,137,000!"

Existing Home Sales continued to show the housing markets is still in search of a bottom... Existing Home Sales fell 3%, and the home prices continue to fall with the median price down 12% from a year ago... The other day, I made a statement that I should have been taken to the woodshed for... I said that with interest rates this low, people should be taking advantage of them and buying those houses now... But... As I keep saying, home prices will continue to fall... So why buy now if you can get it cheaper tomorrow? Sorry... What I should have said was to refinance now is a very good idea!

In Canada yesterday... The Bank of Canada (BOC) explained the details of Quantitative Easing "should they need it"... That was HUGE for the loonie, as the BOC hasn't implemented this monetary policy yet... They just have it ready and on the shelf should they need it... Good plan!

Another item that has helped to boost the loonie (Canadian dollar) was a report yesterday that showed Retail Sales unexpectedly rose .2% in February... Geez Louise, can't they get this data on a more timely basis? February seems like a month of Sundays ago to me! Any way, the Canadian economy does have a pulse... And that's a good thing!

Gold didn't like the color of the Treasury Auction announcement yesterday either, and the shiny metal pushed back over $900 once again. Oh... And here's a story that just hit the news wires this morning... It is reported that China has increased their Gold holdings 76% to the 5th Biggest Country (of Gold holdings). China increased their holdings from 454 Tons to 1,054 Tons... For those of you keeping score at home that's $31 Billion dollars worth of Gold!

OK... Before we head to the Big Finish today... Have you heard or seen the story going around about Bank of America's (BOA) purchase of Merrill Lynch (Merrill)? OMG! This is HUGE! BOA's CEO, Ken Lewis testified this week and said that Fed Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America to not discuss its increasingly troubled plan to buy Merrill Lynch -- a deal that later triggered a government bailout of BOA... Now, all my licenses in the brokerage business tell me that that's a HUGE NO-NO! A Company is supposed to alert their shareholders of any materially significant financial hits... If I were a shareholder of BOA, I would be steaming mad right now! As a market participant it still ticks me off!

Now... Here's the latest from the Wall Street Journal this morning... "The Federal Reserve didn't advise Bank of America or CEO Ken Lewis "on any questions of disclosure," a spokeswoman for Fed Chairman Ben Bernanke said."

Oh Great! Now we have a "he said - no he didn't" scenario! That's their plan folks... Attempt to confuse the masses, throw up smoke screens, and maybe it all goes away... Not on my watch! We need to know who's telling the truth!

And one of the things they will use to direct everyone's attention away from this awful thing, is... Drum roll please.............. The Stress Tests! That's right! They are supposed to be talked about today... I still hold to my beliefs that we won't really be told the truth about these 19 largest banks... I can only hope to be wrong!

Oh, and one more thing... A reader asked me why I never talked about Silver, always choosing to talk about Gold... Hmmm... I guess it's sort of like the Paris Hilton thing... Or let's see what else could I compare it to.... Any way, I don't mean to short change Silver, when I talk about Gold you can believe that it includes Silver... Imagine my poor fat fingers if I had to type Gold and Silver every time I talked about Gold and Silver...

And... On that note... Time to go to the Big Finish!

Currencies today 4/24/09: A$ .7185, kiwi .5680, C$ .8225, euro 1.3250, sterling 1.4625, Swiss .8775, rand 8.8550, krone 6.5650, SEK 8.20, forint 223.40, zloty 3.4150, koruna 20.1950, yen 96.88, sing 1.49, HKD 7.75, INR 49.88, China 6.8272, pesos 13.12, BRL 2.2050, dollar index 84.78, Oil $49.91, Silver $12.82, and Gold... $911

That's it for today... And for me for the next week! Chris Gaffney will have the conn on the Pfennig next week. I'm very excited about going to Bermuda, although it looks like the good folks at the Sovereign Society are going to keep me busy! Cardinals sweep the Mets! Wow! That has a great sound to it... The Cubs come to town tonight, it sure would be sweet to sweep them too! But that's getting greedy, I would be giddy with 2 of 3! Tomorrow is the draft for the NFL, the Rams have the second pick... Memo to the Rams... Don't blow it! An absolutely beautiful day here yesterday... My dad used to say to me when it would be blue skies, sunny, warm days... He would say... "Chuck, they don't have days like this in the Soviet Union"... I use that saying with my kids, and they look at me like I should be wrapped in a white suit! OK... Time to go... Hope all's well with everyone, and you have a Fantastico Friday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837

A Horrific Jobs Report!

ChuckButler — Mon, 09 Mar 2009 14:47:02 GMT

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In This Issue..

* 651K jobs lost in Feb...
* Dec. and Jan Job losses revised up...
* Talking Norway, Canada, Australia...
* Brazil stealthlike for 3 months...

And Now... Today's Pfennig!

A Horrific Jobs Report!

Good day... And a Marvelous Monday to you! A wonderful weekend here in St. Louis, a taste of spring was in the air. I got to spend some time with some of my closest friends on Friday night, a good time was had by all!

Well... Our Fantastico Friday was interrupted by that horrific Jobs Jamboree number that printed Friday morning... 651K jobs were lost in February, which let me remind you is a couple of days shorter than other months. So, it could have been worse! Hard to believe that could be the case, but it's true. The unemployment rate rose to 8.1%, from 7.6% in January. The jobless rate is the highest since 1983. The economy has now shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone.

Remember a year ago, when I kept harping that we had entered a recession, but the NBER hadn't announced one yet, nor were the Un-dynamic duo of Paulson and Bernanke agreeing with me, as they kept denying what was right in front of them, for if little old me, could see that we had entered a recession, then why couldn't these two? Oh, well, we now know that the recession began in December 2007... And now we know that 4.4 million jobs have been lost since that time. Of course if the Bureau of Labor Statistics (BLS) didn't add jobs throughout the year that didn't exist, we would be even more worse, so I don't know whether to thank the BLS or curse them...

One thing to not let slip by you, is the fact that the previous months' totals of -577K and -598K were revised upward by large amounts to -681K and -655K respectively... So, you've now got to ask yourself if the Feb figure will be revised to -700K... Of course it's my opinion that the BLS would never dare print that figure on a first run printing, but only as a revision, that can be swept under the rug.

So... The currencies reacted a bit differently on Friday than we had seen recently when bad news printed in the U.S. Recall, that the Trading Theme that rewarded the dollar, whenever bad economic data printed, had held a grip on the markets for some time... But Friday morning, I mentioned that the trading looked different, with no Trading Theme in place, and that carried on even after the Jobs data printed.

The euro was stronger for most of the day on Friday, but as I left the office at the end of the day, it was beginning to look a little worn around the edges, and as I turn the currency screens on this morning, I see that the single unit has given back some ground.

I got a kick out a story that a reader sent me over the weekend... It was a story that appeared on the Bloomie regarding rate cuts... I told him, "yes, this is the stuff I keep harping on about how it's not the cost of the credit that keeps banks from making loans, so why keep cutting interest rates?" So... Here's a snippet of the report so you can see what it is that I'm talking about...

"European Central Bank Executive Board member Juergen Stark said cutting interest rates won't remedy the financial crisis and pushing them too low may backfire. The financial crisis can't be solved with rate cuts, Stark said in an interview to be published in Luxembourg's Tageblatt newspaper on March 9. Too low a rate level can even be counter-productive."

Hmmm... Finaly a Central Banker with the intestinal fortitude to stand up and say the right thing! Of course, that didn't stop the European Central Bank (ECB) from cutting 50 BPS last week! UGH!

Recall last week I was talking about how fundamentally speaking, Australia was looking healthier than other countries, but then they posted a contraction in their GDP the next day... Some egg on my face with that one, but Hey! I still think they are poised to pull out of this global financil meltdown on the fast track. Apparently, I'm not the only person that thinks that... Derivatives show that the worst is over for the Aussie dollar... And the Royal Bank of Canada (RBC) is telling their customers to buy the Aussie dollar VS Canadian dollars / loonies... I read that this morning, you don't think I make this stuff up do you? It was there in on the screen...

I mentioned to Chris Gaffney last week, that I had been seeing more yen selling coming across the trading desk than I had seen in a long time. I said that these people, if they had held it long enough, were probably taking profits. And why not? In this day an age with deflationary pricing pushing most assets downward, when you see a profit, you take it!

The guy known as "Mr. Yen", Sakakibara, told the press last night that he believed yen may rise to a record 70 VS the dollar... WOW! He also said that it would range trade between 100 and 70... He believes that the yen will be afforded the same kind of love the dollar has received since the financial crisis began in the U.S. With Japan posting a large economic contraction last week, Mr. Yen, is of the opinion that it will help the currency gain to 70.

Hmmm... I just don't know about all that... For one, I'm not convinced the flight to safety that has underpinned the dollar with buying of Treasuries, will be duplicated in Japan... And two... The only thing I saw pushing the yen stronger in 2008 was the unwinding of the Carry Trade, which I said had come to end about a month ago. So... There you have it... I don't like yen's chances to go to 70, but do agree that it could hold 100... It's darn close to 99 as I type...

Recall last week I told you about my neighbor that stopped me in the driveway and was all concerned about what he had heard on the radio that day, regarding the FDIC going broke... I said then, not to worry about it, as the Fed will print more money and keep the FDIC from failing... If they kept AIG from failing, they certainly would do the same with the FDIC... Well, on Friday I saw this... "the FDIC wants a permanent increase in its line of credit with the Treasury Department to $100 billion from the current $30 billion. FDIC Chairwoman, Sheila Bair told key lawmakers in letters Thursday that such an increase "would leave no doubt that the FDIC will have the resources necessary to address future contingencies and seamlessly fulfill the government's commitment to protect insured depositors against loss."

OK... I told you on Friday morning about Gold's rebound to $940, but it failed to add to that figure even after the horrific jobs data. I guess you would have to say that Gold traders had "priced in the jobs data already", eh? Gold is off by about $4 this morning, as it gets pulled down by a report regarding global inflation... The Economic Cycle Research institute assesses that U.S. inflation pressures are at their lowest since 1958, and likely to decline further...

But for every report attempting to pull Gold down, there's one attempting to push it higher... What I'm talking about here is the report that our friends, NOT! At OPEC are going to maintain their 13% cuts in production put in place since September 2008. They may consider more cuts. Oil is trading higher this morning at almost $47, and oil traders believe it will be back to $50 within two months...

Quietly making noise for the past 3 months has been the Brazilian real... The real has gained 4% in the past 3 months, as investors around the world look for yield... And Brazil's interest rates have had the allure of the Sea Hag's song to Pop-Eye! But... There's word out of Brazil that the Central Bank will look to cut rates by 100 BPS / 1% when they meet, later this week. That's too bad, but Shoot Rudy, Brazil's rates will still remain higher than you can get in most ports of call... And... Their GDP will be positive.... And... If traders and investors reward the real for cutting rates aggressively like they did over currencies, then the real has nothing to worry about, eh?

OK... So, for the past month I've given you my ideas for the countries / currencies that could be on the fast track to recovery, given their ability to remain off the rosters of countries with failing banks. Norway leads the pack, with Canada, and Australia close behind... I even told you about how Paul Volcker thought we should shift to the way Canadian Banks operate. Well... It's always nice to see someone else follow up on my ideas, not that they read the Pfennig and said, "Hey! Let's write about what Chuck wrote about"... Nah... That wouldn't happen... HA! But, seriously, BNP Paribas' research team has issued a report advising their clients to buy... You guessed it... Norway, Canada and Australia...

BNP said, "we remain friendly on commodity currencies like Norway, Canada, and Australia, and view today's oil price rally as an indication for other commodities to follow. We are bullish on the Canadian dollar, Norwegian krone, and Australian dollar, but unlike last week we like trading these currencies long against the dollar."

So... There you go! It's not just me!

There is no scheduled data to print today, but the rest of the week is chock-full-0-data. On Wednesday, when I board a plane to Florida, we'll see the Monthly Budget Deficit... That should be a doozy! On Thursday, we get the usual Weekly Initial Jobless Claims, and Retail Sales for Feb... I can tell you right now, that the BHI (Butler Household Index) tells me this report for Retail Sales is going to be very disappointing! Friday the 13th, we'll see the Trade Deficit, Import Prices, and U. of Michigan Confidence. There are other 2nd Tier reports sprinkled in all week...

I really do think that the Retail Sales for Feb, is going to be bad... And that may weigh on the dollar, that is, if the Trading Theme keeps to the back of the room!

OK, as I head to the Big Finish, I see the euro has lost more ground than when I first came in... It just can't stand prosperity!

Currencies today 3/9/09: A$ .6360, kiwi .4980, C$ .7735, euro 1.2590, sterling 1.3890, Swiss .8595, rand 10.5930, krone 7.1125, SEK 9.2050, forint 247.90, zloty 3.77, koruna 22.02, yen 99.15, sing 1.5515, HKD 7.7550, INR 51.88, China 6.8410, pesos 15.28, BRL 2.3750, dollar index 89.20, Oil $46.74, Silver $13.22, and Gold... $937.90

That's it for today... Well.. The Butler boys made it through the 5 days on our own... No probs... My beautiful bride returned home last night, but too late for me to see her, as I was in ZZZZZZ-land when she got home. I believe a good time was had by all though, given the messages/ texts I received... I head to Jacksonville on Wednesday, for a corporate event, then drive down to Jupiter on Friday... My family joins me in Jupiter Friday night, and by Saturday, I'll be in heaven... No, I mean, Roger Dean Stadium, watching my beloved Cardinals! Sure hope the weather is warm, to get the "frost" out of my system! I will celebrate my birthday in Jupiter, like I have for the past 7 years... After the events of almost two years ago, I do "celebrate" my birthday now more than ever. OK... I hope you remembered to set your clocks ahead this weekend. This is the second year of doing it this early, so eventually we'll get used to it, of course by then they'll change it again! UGH! Got to get this tied up and out of here, so I hope your Monday is Marvelous!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837