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It Was Central Bank Intervention!

* Currencies add to their gains... * Industrial Production soars! * 2nd QTR GDP to be a one and done! * The Aden Sisters on Gold! ** It Was Central Bank Intervention! Good day... And a Tub Thumpin' Thursday to you! While I'm not out of the woods, I'm feeling more human this morning, and that's a good thing, considering where I've been earlier this week! So, I'm going to go out on a limb, and proclaim this will be a Tub Thumpin' Thursday! I've got my banana, and bottle of Gatorade at my side, so.... Let's get to the Pfennig! Front and Center this morning I have to talk about the blip that we're going to see that happened in the 2nd QTR due to the stimulus checks. It all goes back to the stimulus checks and the first sign of this came (besides Retail Sales) yesterday in the form of Industrial Production. Remember yesterday when I told you that Industrial Production is a second tier piece of data that gets ignored by the markets, but I think it's important so I talk about it? Well... Just like last week, when I described the bratty spoiled child throwing a tantrum on the floor of the grocery store as being something you can't avoid paying attention to... The growth in Industrial Production was the same......

Published Thu, Aug 08 2008 9:13 AM by Chuck Butler

Filed under: Currencies, Brazilian Real, Oil, Gold, Central Bank Intervention, G7, GDP, Industrial Production, Mexico

Fannie and Freddie Back In The News...

* Strange trading days... * U.K. Retail Sales surprise.... * Norway's GDP prints strong! * A CDO lesson... ** Fannie and Freddie Back In The News... Good day... And a Tub Thumpin' Thursday to you! Don't know why... I just felt like it should be a Tub Thumpin' Thursday! I hit the wall yesterday, as I went home, and fell asleep at 3 o'clock, and didn't wake up till night time! Watched a few innings of my beloved Cardinals, wanted desperately to stay up and watch the May-Walsh beach volleyball game, but went right back to bed! So... I should be rested, eh? One would think so, but with the treatments I take, they just simply wipe me out! But... Hey! I always said that sleep was the greatest thing... I just get to enjoy more of it, right? OK... Another day of strange trading... As I signed off yesterday, the euro had given up it's previous day's gains, but found some terra firma at 1.47 and then rallied in the afternoon... If you guess right, as I have not done so this week, you can catch a great price to sell, and buy, all in the same day!...

Published Thu, Aug 08 2008 8:09 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, Oil, Gold, Euro, Norway, Retail Sales, Renminbi, Fannie Mae, Freddie Mac, Collateralized Debt Obligation, I.O.U.S.A

Retail Sales Disappoint Again...

* Dollar rally continues... * U.S. data continues to be weak... * Gold and the A$... * Sterling melts away... ** Retail Sales Disappoint... Good day... And a Thunderin' Thursday to you! Michael Phelps didn't swim in any finals yesterday, so no Gold for the U.S! I'm just floored by this kid! My oldest son, Andrew, was a pretty good swimmer in his day, but my goodness, this kid is on a different planet! OK... Well, front and center this morning, we have a report that just printed that shows U.S. Home Foreclosures rose 55% in July. Bank seizures almost tripled according to RealtyTrac Inc. That's sad folks, simply sad... I look at this report and shake my head in disgust for Alan Greenspan. Yes, Big Al Greenspan is the root of all evil in the housing meltdown... Sure there were the greedy folks that booked loans that shouldn't have happened and all that, but down at the root of the meltdown you'll find Big Al's picture!...

Published Thu, Aug 08 2008 9:03 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, Inflation, Gold, European Central Bank, Retail Sales, Eurozone, Foreclosures, Consumer Debt

A week of interest rate decisions...

* A week of interest rate decisions... * Pound Sterling drops again... * Brazil and Mexico continue to dominate... * Gold and Silver fall... ** A week of interest rate decisions... Good day...The dollar stayed in the pretty tight range it has established over the weekend, gaining some strength over the weekend after losing some ground on Friday. Should be an exciting week as it is 'Interest Rate Decision' week as a number of central banks will be announcing their new rates. I think the rate announcements will reinforce my feelings that the world's economies are heading down divergent paths, with some economies heading down a recessionary path while others maintaining good growth rates. As expected, the US unemployment rose to the highest level in more than four years as employers cut jobs again in July. But the decrease in payrolls was slightly less than forecast, so some were saying 'it isn't as bad as we thought'....

Published Mon, Aug 08 2008 10:24 AM by Chuck Butler

Filed under: British Pound, Brazilian Real, Inflation, Silver, Gold, Interest Rates, The Fed, Peso

Don't be fooled by the US GDP...

* Don't be fooled by the US GDP... * Canada, Mexico, and Brazil rally... * Aussie dollar falls... * Japanese to keep rates unchanged... ** Don't be fooled by the US GDP... Good day...And welcome to the last day of July. The dollar held its ground through most of the trading day but started to sell off as the day wound down. The currency markets seem to be stuck in a summer doldrums, with few dramatic moves. With many of the head traders enjoying a summer break (ours included), currency desks are reluctant to take on large positions. And who can blame them as the recent global economic data has left investors wondering where to turn. As I have explained to several recent callers, the global economy is experiencing a slowdown as the high commodity prices and a slumping US economy has hurt growth. The economic releases have shown an overall slowdown in growth, and rising global inflation. But the overall slowdown will have differing effects on the currencies. Asia is slowing, but a slowdown from double digit growth in China and India is much different than a slowdown in the US where growth is around 2%. Also, the Asian countries have kept interest rates low to try and keep their currencies from appreciating too quickly. These countries are therefore in a much better position to combat inflation, and can allow currency appreciation to help combat rising prices....

Published Thu, Jul 07 2008 9:08 AM by Chuck Butler

Filed under: Australia, Dollar, Brazilian Real, Euro, Yen, Canada, Japan, GDP, Mexico, Peso

Budget gap to approach $500 billion...

* Budget gap to approach $500 billion... * Deficits lead to record borrowing by the US... * Commodity currencies take divergent paths... * India raises rates... ** Budget gap to approach $500 billion... Good day... The currency markets were mostly flat yesterday with all of the majors stuck in fairly tight trading ranges. With no economic data released, the trading desks were mostly dead. The story which dominated the screens yesterday was the announcement of a record $490 billion US budget gap. The Bush administration said the US budget deficit will widen to a record next year, leaving a deep budget hole. The bigger shortfall reflects dwindling tax receipts because of the US economic slowdown, the cost of the $168 billion economic stimulus package and spending on the wars in Iraq and Afghanistan. The shortfall reflects a deterioration of the budget over the past seven years. Bush inherited a budget surplus of $128 billion when he took office in 2001. The budget worsened almost immediately, because of recession, the Sept 11 attacks, the beginning of the war in Afghanistan and, later, the war in Iraq....

Published Tue, Jul 07 2008 9:38 AM by Chuck Butler

Filed under: Brazilian Real, Commodities, Recession, New Zealand, Deficit, India

Where There's Smoke...

* Fed Head Yellen comes clean! * $75 Billion in Capital needed? * Another risk even? * Higher inflation for Brazil... ** Where There's Smoke... Good day... And a Terrific Tuesday to you! I'm writing from home today as I have to deal with a catalytic converter this morning before heading into work. Writing from home is always a challenge in that I don't have my trading screens going with news scrolling continuously... But... I carry on despite my challenges! The euro recovered a bit yesterday after last Thursday's tailspin... And the recovery was smack dab in the face of some weak economic news from Germany! Here's what got the euro going and moving up once again yesterday......

Published Tue, Jul 07 2008 9:55 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, China, Recession, Euro, Consumer Confidence, Bank of England, Carry Trade, Janet Yellen

Profit Taking Dominates The Day...

* Dollar faces Dynamic Duo this week... * RBA leaves rates unchanged... * Comparing decades... * Tankan is somewhat positive... ** Profit Taking Dominates The Day... Good day... And a Terrific Tuesday to you! In keeping with Pfennig tradition, I begin each July with words from one of my fave bands of the 70's, Uriah Heep... There I was on a July morning... (I could go on, but you get the point.) Well, the profit taking that I talked about yesterday morning, continued for most of the morning yesterday, causing the euro to fall from the 1.5810 level I saw when I turned on the screens, to the low 1.57 area. It had to be profit taking because why would anyone buy dollars VS euros as a long time investment, with the dynamic duo of the Jobs Jamboree and an ECB rate decision staring the dollar bulls right in the face this week......

Published Tue, Jul 07 2008 8:12 AM by Chuck Butler

Filed under: Dollar, British Pound, Brazilian Real, Oil, Euro, European Central Bank, Consumer Debt

Removing Fed Rate Hike Bets...

* The euro rallies 1-cent! * U.S Data continues to be a drag... * Canada's Carney underpins the loonie... * RBS issues a warning! **Removing Fed Rate Hike Bets... Good day... And a Happy Friday to one and all! Looks like it could be a Fantastico Friday as traders are Finally coming around to Chuck's way of thinking regarding Fed rate hikes... And as traders remove their bets for aggressive Fed rate hikes, the luster begins to fade on the dollar rally. The meetings are over for this week (they start up again next week!), YAHOO! I get to spend the day on the trading desk... I've missed everyone! OK... Front and Center this morning, we have the euro trading 1-cent higher, knock, knock knocking on Heaven's Door, I mean, the 1.56 handle. As I said in the intro, it appears that traders don't have the stomach to hold on to their bets that the Fed will aggressively raise interest rates this year. Recall, the other day, I told you that the bets were ratcheting up and had reached 75 BPS of rate hikes this year... I doubt we have any... In fact, as I told you the other day too, I believe that when the dust settles on the fact that the Fed isn't going to raise rates, things will have gotten so bad here that the Fed will be entertaining thoughts of cutting rates again!...

Published Fri, Jun 06 2008 9:20 AM by Chuck Butler

Filed under: Brazilian Real, Oil, China, Euro, Carry Trade, FOMC, Bank of Canada, Royal Bank of Scotland