Search results matching tags 'European Central Bank', 'Brazil', and 'Employment'

"Fat Fingers"?

ChuckButler — Fri, 07 May 2010 14:33:28 GMT

........But first a word from our sponsor.......
Strike while the metal's hot and the market risk none

Growing demand for gold, silver and platinum attracts many of today's leading investors. Is fear of market volatility and high costs keeping you from adding precious metals to your portfolio? Find out why the new EverBank® MarketSafe® Diversified Metals CD could be a safe and rewarding way to gain exposure to these three popular commodities.

100% deposited principal protection and a low minimum $1,500 deposit. Just what the smart investor looks for: high upside potential with no market risk.

Find out if this precious metals CD is right for you and apply for one today. Go to: http://www.everbank.com/001CertificatesMSDiversifiedMetals.aspx?referid=11808

EverBank is an Equal Housing Lender and Member FDIC.
................................................

In This Issue..

* Euro bounces off lows...
* Stocks bounce off lows too...
* Jobs Jamboree Friday!
* Canada's jobs soar!

And Now... Today's Pfennig!

"Fat Fingers"?

Good day... And a Happy Friday to one and all! A Fantastico Friday for me, as I head to a weekend from work in the first time in a month of Sundays! Big news came across my desk for all us EverBankers and friends... Our Marketing Guru, Jason Coots, saw the delivery of his brand new baby boy yesterday... Welcome Sam Coots!

OK... Front and Center this morning is all the hootin' and hollerin' about the stock market move yesterday... At one point it was down 1,000 points... That's right, I did not let my "fat fingers" mess that up... However, someone on Wall Street apparently did, as they meant to enter a trade to sell "millions" of shares of Procter & Gamble, but entered "Billions"... That's Billions with a capital "B", as Ronald Reagan used to say! Upon discovering the "fat fingers" error order was restored... However, the problem here is that stocks were down BIG TIME before the "fat fingers" error... It was a bad day a red rock for stocks...

And it was a bad day at red rock for the euro, and all the other currencies that it dragged through the 1,000 miles of broken glass... There were some exceptions, as Japanese yen and Swiss francs rallied along with the dollar... But the BIG WINNER on the day was Gold... The shiny metal kicked sand in the face of the dollar all day and night, climbing back to $1,200 an ounce... Gold is selling a bit this morning, but is still above $1,200!

I have to wonder where the "Gold price manipulators" were yesterday... Did they give up the ship? Did they throw in the towel, and go home with their bat and ball? I doubt it... You see, the pattern I notice, is this... They do not manipulate every day... And on a day like yesterday, it would have been suicide to step in front of that run-away train called Gold...

The markets went severely into this funk of selling yesterday after the European Central Bank (ECB) failed to calm the markets... The ECB indicated it was taking no further action to stop the Greek debt crisis from spreading to weaker euro-zone financial markets.

ECB President Jean-Claude Trichet said the central bank didn't discuss what the market calls the "nuclear option," a procedure that would involve the purchase of government bonds in the secondary market.

Now, don't get me wrong here... While the markets want the ECB to jump through hoops and do any thing and every thing to calm the markets, they have stuck to their guns, in hopes that the markets finally realize that a Central Bank can't be all things to all people... And to me... That's the right thing to do! But, I worry about the ECB, and this decision, and wonder how long their finger in the dike is going to hold back the wave of water that will cause them to head to higher ground... If the markets don't back off soon, The ECB is going to have egg all over their collective faces... And that's not a good feeling, as I've been there, done that, and bought the T-shirt!

OK... Well... As I was packing up and getting ready to leave for the day yesterday, I told the folks on the desk that it looked like the euro would lose the 1.26 figure, as it was falling like a rock off a cliff... But... The "oversold" levels must have kicked in, and as stocks began to recover from the "fat finger" error, the euro began to rally... And this was quite the rally, as it moved from the low 1.26 handle to 1.2788 in late trading, overnight trading and European trading... Not in one session did we see the rally stall, or get reversed...

Now... Does this mean that the all clear signal has sounded for the euro? Not Hardly! The euro isn't even close to getting out of the woods, folks... Should it be? Well in my opinion, the selling has been far too severe considering the fundamentals... Just this week, the euro had lost 4.2% before the turn-around yesterday afternoon... But... My opinion is... Well, it's my opinion, and doesn't move markets... Not one iota!

While stocks & euros were falling yesterday I wondered to myself... is this a "race to the bottom"? I certainly hope not!

So... We're a good way toward the end here, and I haven't talked about the Big Kahuna this morning... The Jobs Jamboree! Yes, the first Friday of each month brings us the Jobs Jamboree, which the forecasters say we'll see an increase of jobs created by 190K... Remember, what I told you yesterday... About 125K are Gov't census workers... So, while 70K jobs created is better than the -500K jobs lost each month a year ago, I'm sorry to say that it's not enough to feed an economy that wants to be strong...

When things in the Jobs Jamboree get all crazy, like now, I revert to my original thoughts on the subject, which is to ignore the jobs created, for there is not one indication in the report, what kind of jobs were created... Instead, I prefer to stick with inflation indicators of Average Earnings, and Average Weekly Hours. There's still not a lot of wage inflation going on folks... The workers that have jobs have their heads down and are not thinking of raises... But if you're asking for raises, no surprises they're giving none away...

Speaking of working harder, longer hours... The stupid Productivity data confirmed that we are doing just that! And... The Weekly Initial Jobless Claims were just about bang on the forecast of 440,000 printing at 444,000... The Continuing Claims continue to be a real problem, folks... People are not going back to work, as fast, as the media and Gov't would have you believe!

In Canada, jobs are recovering too... The latest jobs data showed more jobs added than forecast last month... April's increase was 108,700 new jobs, VS March's increase of just 17,900.. (and the markets thought that number was good, then!) Add this data to the roster of reasons that the Bank of Canada should be the first G-7 member country to raise rates! And, oh! The Canadian dollar / loonie loved the data, and the fact that the euro recovered a bit to come back strong on the day/ night...

The poor pound sterling... It has not been allowed to come out and play with the euro and other currencies rallying overnight... You see the U.K. elections came out just like I said they would... A hung parliament... And when there are questions about country leadership, that country's currency gets deep sixed... In a heartbeat!

Another currency that's just like a trip through the Wild West, the Brazilian real has really demonstrated the "Emerging Markets Shuffle" this week... After climbing to 1.7260 on Monday, it has fallen to 1.8950 before recovering along with the euro to 1.8550 this morning. I think what we saw was the usual selling of Emerging Markets whenever there are problems in the world, and... Probably the Brazilian Central Bank looking at this sell-off as an opportunity to weaken the real even further, and most likely added their own sells, thus explaining the HUGE loss of the real this week...

But you know what? The real has been a real trooper the past couple of years, and has, in the past, come back strong, whenever it sees these wild swings... So, if that pattern were to hold true, one would think that these levels would be bargain basement levels... But, if there's more selling of the euro, things could even get more rough for the real going forward... But, think about this before you pick up the phone and put in an order in to sell your reals... The real pays you a "risk premium" in interest... You can't get interest paid to you any higher than the real pays any where around the world...

I sure would like to see the markets calm down a bit today going into the weekend... I guess the Jobs Jamboree will have a lot to say about that!

Then there was this... You know... Yesterday's stock market sell-off may have been attributed to the "fat fingers" error... But think about this before you let the selling slide... Stocks were already down big time, so there was, if you will, a 3-1 count with the stocks pitching to Albert Pujols... Chances are the outcome isn't going to be good for the pitcher... And so it was with stocks... No... They wouldn't have sold off 1,000 points, but the fact remains they were already down, BIG, and... Their fundamentals are awful...

To recap... The BIG Sell off of stocks was caused by a "fat fingers" error yesterday, and as stock recovered, so did the euro, and the other currencies so affected by the euro's decline... Today is a Jobs Jamboree Friday... Canada's Jobs data was quite strong at 108,700 jobs added in April. And the European Central Bank left the markets hanging out on a line yesterday, as they failed (by markets' requests) to calm the markets with some kind of announcement that they would jump through hoops to save Greece...

Currencies today 5/7/10: American Style: A$ .8910, kiwi .7150, C$ .9640, euro 1.2780, sterling 1.4676, Swiss .9020... European Style: rand 7.6980, krone 6.2150, SEK 7.66, forint 220.25, zloty 3.2450, koruna 20.34, RUB 30.43, yen 92.50, sing 1.3935, HKD 7.78, INR 45.47, China 6.8258, pesos 12.89, BRL 1.8545, dollar index 84.47, Oil $77.80, 10-year 3.47%, Silver $17.70, and Gold... $1,200

That's it for today... Well... It's Friday! YAHOO! I made it a whole week! I wish I could say that for my beloved Cardinals that limped out of Philly... UGH! I was helping Chris Gaffney with his presentations for next week's Las Vegas Money Show... Last year, we learned that the Money Show would move to Caesar's Palace from Mandalay Bay, and I was all happy about that, for my fave restaurant, Bobby Flay's Mesa Grill, is in Caesar's... But, now I'm not going! UGH! I hope Chris makes certain to stop there for lunch and dinner! Honey, you've been here, and I've been there, and we haven't had no time to drink that beer... Well, we'll take of that today, as we'll get together today after work... Something we used to do all the time when we didn't have so many co-workers, but that should be no excuse! So, this should be fun! I hope you have a Fantastico Friday, and Wonderful Weekend! Sunday is Mother's Day! Let's make certain that she has a simply marvelous Day!

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

Aussie Jobs Soar!

ChuckButler — Thu, 14 Jan 2010 15:19:00 GMT

.........But First, A Word From Our Sponsor..........
Chuck Butler Will Help You Create Your Own "Dollar Oasis" in Just One Weekend

This February 25 to 27, Chuck Butler is partnering up with The Sovereign Society to hold an intensive, 2-1/2-day currency boot camp in Scottsdale, Arizona.

Why are we doing this?

Simple - to give you the tools to protect your investments from the perils of Wall Street and the destruction of the dollar, and to grow your wealth no matter what happens in the stock market.

Visit http://www.worldcurrencywatchfxu.com/main/ for more information.
......................................................

In This Issue..

* A back-n-forth day in currencies...
* Aussies create 3X more jobs than forecast!
* Euro to remain alternative reserve currency...
* Brazilian Sov. Wealth Fund achieves weaker real...

And Now... Today's Pfennig!

Aussie Jobs Soar!

Good day... And a Tub Thumpin' Thursday to you! The daytime temperature reached 49 yesterday... As our little Christine would say... "get the sharts out!" HAHAHA!

Today, we're chock-full-o-stuff to look for, starting with a European Central Bank (ECB) meeting, and going through the morning here in the U.S. there'll be more "stuff" for us to look for, like Retail Sales, and since it's a Thursday, the Weekly Initial Jobless Claims will also print. The Fed's Beige Book printed yesterday afternoon, and we've got that to discuss this morning too... So, let's get this Tub Thumpin' Thursday going, eh?

Front and Center this morning... The Australian Jobs report printed yesterday afternoon, and it looks like we'll be able to put another mark in the "pro" column for an Aussie rate hike in Feb... Here's the skinny... Australian employment soared for a 4th straight month, as jobs created were 3 times more than economists estimated! The total jobs created was 35,200, and the jobless rate fell to 5.5% (from 5.6%)...

So... The economists or "experts" if you will, got this one completely wrong... Their estimate was for jobs created to be 10,000... This is very strong employment growth for Australia, and once again places the spotlight on the Aussie dollar (A$) as one of the best yielding currencies with a prospect of even higher yields as soon as February!

OK... This report doesn't "seal the deal" in any shape or form, but it does "nudge" the Reserve Bank of Australia (RBA) in that general direction, for sure!

Traders took notice, right away, and began buying Aussie dollars, pushing the A$ past 93-cents on the night...

The interest rate spread / yield differential between the U.S. and Australia really was put up on top of the desk and asked to dance when U.S. Fed Head, Dudley, said that short term interest rates may remain low for at least 6 months and "possibly for as long as two years"!

Hmmm... Ok, Dudley said that it all "depended on how the economy develops"... WOW! A new MR. Obvious! No dookie! You mean, the Fed is going to react to how the economy develops? WOW, what a novel idea!

OK... I'm sorry, I got carried away there... Since he mentioned it, we might as well take a look at the Fed's Beige Book that printed yesterday afternoon...

The Fed's Beige Book, which is a report on the pulse of the economy from each Fed region, showed that while the economy is slightly better, it continues to operate below capacity, or in their words... " the economy continues to operate at "low levels"...

The Fed Heads also noted that holiday spending in 2009 was "slightly better than in 2008, but still far below 2007 levels... In fact, it was added that the 2009 improvement was so small it did not really represent a shift in trend...

OK... So... Now, looky here! We have December Retail Sales printing this morning! Front and Center, Retail Sales is expected to rise for this period, by .5%, a moderate rise, and one that's disappointing, I would think, when talking about the month of December! And off quite a bit from November's rise of 1.3%...

Now... This paragraph is going to border on boring for I will be describing things in Retail Sales data, so if that doesn't float your boat, go ahead and skip ahead... OK, those of you still with me... I read a great description of what was going on in that 1.3% gain in Retail Sales from November, and thought it would be good to share... A lion's share of the increase reflected a price-related 6.0% surge in gasoline station receipts. As well, the earlier-reported rise in unit motor vehicle sales was reflected in a 1.6% increase in sales at auto dealerships. Excluding these two components, retail sales rose a relatively robust 0.6%...

OK, it's safe to come back now... We'll also see the Weekly Initial Jobless Claims, which will remain above +400,000, for sure...

As I said above, the European Central Bank (ECB) is meeting as I type my fat fingers to the bone... What do you get when you work your fingers to the bone? Well... You get bony fingers! HA!

The ECB will keep rates steady Eddie this morning, but will probably announce more stimulus removal... Recall, that last week I told you how the ECB had already removed a large chunk of stimulus, while the Fed continues to supply the monetary candy to the U.S. economy...

The euro spent yesterday going back and forth, above and below the 1.45 figure... This morning, the single unit has already been above 1.45 and now it's back below that figure! There's just no conviction to take the single unit much higher right now... And that's because, there's nothing coming from the ECB... That will change this morning, hopefully!

The boys and girls over at Government Sachs, OOOPS did I say that out loud? I mean Goldman Sachs believe the euro will remain supported by its status as the dollar's sole rival for currency diversification by Central Banks... "Given the Eurozone is pretty stable overall, although not overly attractive either, swings in dollar sentiment will likely be reflected in the extremely deep and liquid euro/ dollar cross."

Yesterday, I did a video and talked about why the euro, even with all the problems in Greece, Spain, Italy, etc. is far more valuable than the dollar... I noted all sorts of things, but said, that "The euro's problems can't be as bad as those in the U.S. with California, New York, Michigan, Illinois, etc." Then later in the day, it was announced that Standard & Poor's (S&P) cut California's credit rating for the second time in less than a year... Now... That's going to be a problem for the state of California, when it comes time to issuing Municipal bonds, given the rating cut... It will make it more expensive to the issuer for sure!

OK... I came in this morning, and turned on the TV's... And there on one of the TV's there was a discussion about foreclosures in the U.S. There was a guy from RealtyTrac, the people that count the beans in the housing sector... He was talking about how there had been 300,000 plus foreclosures in December... Now that's rotten! Foreclosing on someone in December? That's cold Willis! Ok, I digress, let's see what else RealtyTrac had to say... How's this for size? Nearly 3 million households received at least one foreclosure notice in 2009... That's one in every 45 homes that were in default... That's a 21% increase over 2008...

I understand that there are so many foreclosures that some are delayed simply because there are delays in processing delinquent loans!

OK... Now... You have to understand that this is something that I find to be disgusting, people losing their homes... But... You can go back to 2006, when I was banging the drum and saying there was a housing bubble... I can remember talking to some Home Loan guys back then, and telling them about the housing bubble, and them telling me that I was loony toons!

The reason I talk about this is to illustrate the problems the Fed will have in removing stimulus... And... Add to all this the fact that there are still millions of loans that will re-set later this year into next year... If the Fed moves rates higher, those loans will be at a huge risk of default...

Let's talk about something else... Yeah, right here, right now, we can talk about Brazilian Retail Sales, which printed this morning... Brazilian Retail sales soared 8.7% in November VS the previous year... OK, let me take you back to December, when I wrote about how traders in Brazil were trading on thoughts that holiday sales would be brisk... I said then that all this confirms domestic demand... So, if November's Retail Sales were this strong, one can only imagine December's bounty!

One has to believe that the Brazilian Central Bank (BCB) will have to entertain thoughts about raising interest rates soon, given this strong domestic demand... I'm going to go out on the limb here, and say that the BCB will raise rates by the end of April... Probably 50 BPS (1/2%) So, go ahead and mark it down, and see if I nailed it, or fell on my face...

I have to say that I'm impressed by the Brazilian Sovereign Wealth Fund's ability to move the real weaker... They've been in the markets buying dollars by the truck load, and pushing the real weaker... Hmmm... Think about this for a minute... The Gov't announces a Sovereign Wealth Fund that will buy dollars... And the BCB is probably about ready to raise rates, which would make the real more attractive... You don't think these two opposite pulling forces on the real were done as a package deal by the Gov't do you? Nah... That couldn't happen... NOT! I personally truly believe that the Gov't knew the economy was soaring and that they would have to raise interest rates aggressively at some time in the near future, so why not introduce a way to keep the real from soaring at the same time? Pretty darn smart on their part... But then, what happens with the Wealth Fund runs out of money?

Gold found a way to add about $5 to its figure yesterday... (it's given back $4 this morning though! UGH!) I saw a headline story on Gold the other day shoot across the Bloomie, that said... "Gold may increase to $5,000"... I laughed out loud and said, these claims by people are crazy! I mean, I could say, "Gold may increase to $10,000" It's just a guess folks... That's all these people that spout this, that and the other thing about the price for Gold, are just guessing... And... Probably attempting to get rid of their inventory! HA! The thing I always come back to when talking about Gold at $2,000, $3,000, $5,000, whatever is this... For Gold holders, $2,000 Gold or what ever price, would be nice... But stop for a minute and think about that... Think about what the economy must look like if Gold is at $2,000 or above... That's a scary sight right there folks...

Then there was this... Yesterday, I gave you a link to a story in Business Week about how the Gov't might look to our IRA's and 401K's to fund annuities for a "steady stream of Income for us"... Yeah, right! That's the same lie they told us about Social Security... Of which didn't they spend all those funds? Of course they did! It's my opinion, that the Gov't will need a chunk of change to pay the interest on Debt in the future, and where's that chunk of change? It's our retirement accounts, that's where!

Well... A reader sent me a report from May of 2008, where a Washington Think Tank came up with this idea of taking a piece of our pie... Oh boy! That's just great! NOT! Now, if you didn't read the story yesterday, I bet you'll want to now!

To recap... The currencies traded in a very tight range yesterday, with Gold adding $5. The ECB meets today, with no rate movement expected, but maybe an announcement of more stimulus removal. U.S. Retail Sales holds the key to the markets today, and U.S. foreclosures were 21% higher in 2009 than 2008! UGH!

Currencies today 1/14/10: American Style: A$ .93, kiwi .7425, C$ .97, euro 1.45, sterling 1.6265, Swiss .9795, European Style: rand 7.44, krone 5.6350, SEK 7.0180, forint 184.25, zloty 2.80, koruna 17.95, RUB 6.8272, yen 91.80, sing 1.3880, HKD 7.7565, INR 45.62, China 6.8272, pesos 12.74, BRL 1.7680, dollar index 77, Oil $79.77, 10-year 3.77%, Silver $18.53, and Gold... $1,134.20

That's it for today... Remember in the fall of 2007, when I did the "Currency Tours"? I traveled with other speakers to 8 different cities in two weeks to give talks as a part of FX University, a business under the Sovereign Society. That was something! Well, this year, we decided that all that travel was crazy, and that we would do a 3 day FX University gig in Arizona... I've been running ads for this at the top for some time now, but wanted to make certain everyone that wanted to go, knew about it, so go back to top and check it out!

Not much going on at the Butler house these days, after the great times of December, it's always a let down to get to January... But shoot Rudy, pitchers and catchers report in just 4 weeks! That's what I keep my focus on in January, to keep my mind off the cold! I leave March 11th for spring training... That's just 55 days away! Alrighty then... Mike's here, so it's time to get this out the door... I hope your Thursday is Tub Thumpin' for sure!

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

Jobs Disappoint...

ChuckButler — Mon, 05 Oct 2009 17:23:26 GMT

...But First, A Word From Our Sponsor...
Gain exposure to currencies of emerging BRIC countries-and don't lose a dime on market risk

Don't let market risk get in the way of potentially rewarding exposure to the BRIC currencies. Our 3-year MarketSafe® BRIC CD shields you from any market risk and provides 100% principal protection on deposits held until maturity.

* 4 BRIC currencies: Brazilian real, Russian ruble, Indian rupee, Chinese renminbi
* High upside potential
* No market risk to deposited principal
* Low $1,500 minimum deposit

Some experts believe these 4 countries may become economic powerhouses in coming years. Now could be the right time to add these currencies to your portfolio. And you can do so-safely-with the U.S. denominated MarketSafe BRIC CD.

Don't miss this unique opportunity. Deadline to buy the BRIC MarketSafe CD is Oct. 13, 2009. Apply today or learn more at http://www.everbank.com/001CertificatesMSBRIC.aspx?referId=11808

In This Issue..

* September job losses soar to 263,000...
* G-7 does not make statement on currencies...
* RBA meets tonight...
* India & Brazil pull the right strings...

And Now... Today's Pfennig!

Jobs Disappoint...

Good day... And a Marvelous Monday to you! The Regular Season for Baseball is over, except... The Tigers and Twins have to play a one-game playoff today! Talk about exciting! And that's just to see who gets to go the playoffs!

Well... Friday's Jobs Jamboree did disappoint as I had the feeling they would, printing a disappointing -263,000 jobs lost in September. The Unemployment Rate also rose to 9.8%... Now we all know that when all the people that are truly unemployed are counted, that the Unemployment Rate goes to 16%, but the Bureau of Labor Statistics (BLS) will have none of that so-called counting ACTUAL Unemployed people!

On a sidebar, a reader sent me a note and said that I need to remember that the difference between the weekly initial jobless claims, and the Jobs Jamboree is that the Jobs Jamboree "nets" out the jobs created to the ones lost, while the Weekly Claims only counts jobs lost... And that's fair... I truly understand... The point I've tried to make and probably didn't do such a good job at, was to say... The BLS could use the Weekly Claims as their starting point... But they don't... They use a "survey" instead... Dolts all of them!

So, the non-dollar currencies acted a little strangely on Friday after the Jobs report... The trading pattern for 9 months now has been to reward the non-dollar currencies whenever the data was good for the U.S. (one realizes that this is the exact opposite of what currencies trading on fundamentals would do). However, on Friday... When the disappointing jobs report printed, the currencies reacted as they SHOULD! The rallied against the dollar! Holy Cow Batman, are we returning to Fundamentals? I don't know, folks... But we did on Friday...

Then this past weekend the G-7 Finance Ministers met and left... Without a word about the currencies... So, the rumor going 'round on Friday morning that G-7 was going to hand over the currency watchdog duties to G-20, must be true... The thing that a lot of traders are looking at right now, is the fact that G-7 hasn't said that they were handing over their currency watchdog duties, and they ended their meeting with no statement whatsoever that they were concerned with dollar weakness...

So... Traders not willing to believe the rumors, and still thinking that G-7 is the currency watchdog until otherwise stated, believe that G-7 was giving the green light to further dollar weakness... For, if it's not a concern of the G-7 Finance Ministers, then why should it be a concern of those wanting to take the dollar lower?

And take it lower they have... But, not by leaps and bounds mind you... No, this has been a 1/2-cent move... It's as though the traders are "testing the waters" to see if their thoughts on G-7 are correct or not...

The euro also breathed a sigh of relief when the results of the Lisbon Treaty vote in Ireland printed yesterday... In a substantially decided vote (67% to 33%) the Irish voted in favor of the Treaty, which now goes to Poland and Czech Republic, who are the only two left to ratify the Treaty... There are some rumors going around that the Czech Republic (CR) might hold it up, causing a delay, which could deep six the whole thing...

Speaking of the euro... The European Central Bank (ECB) meets this Thursday... Look for rates to remain unchanged.... However, recently, ECB President, Trichet has been propping up the dollar with statements about dollar strength here and there... Remember, he HAS TO DO THIS! He can not be seen banging the drum for a stronger euro... That could deep six the dollar in a heartbeat... So...on Thursday this week, the markets will be listening to Trichet's statement following the rate announcement to see if he "props up the dollar" again...

And speaking of rate announcements... The BIG ONE tonight is the Reserve Bank of Australia's (RBA) While I think that Rocktober is too early for a rate hike, what I'm looking for is any indication that November will be the month we see the first rate hike after the 2 years of rate cuts around the world. I'm going out on the limb here and saying that the RBA will hike rates 25 BPS next month! So... Put that in your calendar to see if I'm bang on or just plain whiffed at the pitch!

Recall, that at one time it looked as though Norway's Norges Bank would be the first to raise rates, but the RBA has edged in front now... But, that's not that bad of thing to be the first loser, or 2nd place as most people call it, as long as the Norges Bank comes through on the rate hike... Right now, it looks as though the Norges Bank will wait until December...

Rate differentials can and should go a very long way toward currency strength... It's not the end-all, as the Japanese yen can attest to... But, for the most part, it carries a lot of weight in currency valuation... And that's the reason I make such a big deal out of the RBA And Norges Bank being the first Central Banks to raise rates... They already enjoy a rate differential to the dollar... And rate hikes will simply widen that differential...

So, when investors around the world want to find yield... They will look for countries that have rate differentials to the base rate in their country... And the wider the better!

Well, that is, as long as we're not talking about a country that is whacked out, corrupt, politically unstable, or unable to attract foreign investment, so they hike rates up to levels that stand out like a man with a hatchet in his head!

So... Back to Australia for a moment... The A$ really recovered nicely after the G-7 "no-statement" I'm sure some traders are taking a flyer that the RBA would spring a surprise rate hike tonight... So, the downside risk for the A$ tomorrow is there, slightly... But today, it's all seashells and balloons for the A$!

Gold remained above $1,000 overnight... It sure looks to me, as though the price of Gold is simply forming a new base at $1,000, before moving on to higher levels... But, that's just me... I don't have a crystal ball, and I don't read tea leaves! Just an opinion on what it looks like to me... Which is why I've changed my line... Remember, 6-9 months ago, when I would say that I thought it to be a good idea to look to buy on the dips below $900? Well, I'm changing that to look to buy on the dips below $1,000...

Not that I want to "jinx" the Indian rupee, but I've noticed the past couple of weeks, how the rupee has been gaining VS the dollar... Inch by inch, the moves aren't anything to shake the earth, but they are positive moves VS the dollar nonetheless! So... Good show rupee!

You know... Over the past couple of years, you've got to have noticed how the once "fringe countries" like India, and Brazil, are the ones doing all the right things and pulling the right strings with their economies, while the U.S. continues to walk the plank of catastrophe!

Well, after last week's data deluge, the data cupboard takes a break today and tomorrow, coming back on Wednesday with the Monthly Budget Statement... The Budget Deficit in the U.S. has become the focal point of dollar bears... The Budget Deficit continues to grow, as the deficit spending continues to go on and on, like the Energizer Bunny! The rest of the week is pretty low-key with regards to data. Friday, we'll see the latest Trade Deficit... So, the "Twin Deficits" on display this week...

So... To recap, the Jobs Jamboree was very disappointing with job losses shooting up to 263,000 in September. G-7 did not make any statement about the currencies, so traders have taken that to mean they don't care about how weak the dollar is... The RBA meets tonight, and I'm looking for them to raise rates next month, not tonight. And Gold is back above $1,000...

Currencies today 10/5/09: A$ .8745, kiwi .7205, C$ .9310, euro 1.4625, sterling 1.5940, Swiss .9675, rand 7.6090, krone 5.7770, SEK 7.04, forint 182.85, zloty 2.8840, koruna 17.3870, RUB 30.08, yen 89.90, sing 1.4105, HKD 7.75, INR 47.55, China 6.8264, pesos 13.60, BRL 1.7815, dollar index 76.86, Oil $69.16, 10-year 3.20%, Silver $16.23, and Gold... $1,004

That's it for today... Well... Chicago was turned down as an Olympic site for the 2016 Summer Olympics... It will be held in South America for the first time, so that's OK... The Cardinals begin their playoffs in Los Angeles on Wednesday night. So that means, I won't be able to watch the games. UGH! The Lambs, I mean the Rams lost again... But our St. Louis Blues started their hockey season with back-to-back wins VS Detroit! WOW! Calm down, Chris Gaffney, it's only 2 games into the season... But still, plenty to be excited about, for sure! Got to spend some time with old neighbors Saturday, and see Madison Ave, and Allison Road again! And Little Delaney Grace was over yesterday, she sang "you are my sunshine" 1st and 2nd verse to me... HOW CUTE! OK... Time to get on the road, I've got a presentation to do today, and it's a Monday! I hope yours is Marvelous!

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