- Currencies & metals rally on Monday (without interference)
- GDP will show another downward revision….
Good Day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals were playing better, sweeping the Orioles and Cubs, but reverted to their non-ability to hit the ball and lost to the Reds yesterday… I sure hope that was just a case of them not getting to Cincy until 4 in the morning, and then have a day game… Our plans for a big celebration this past weekend got cancelled… Kathy’s mom had to go the hospital, and now Kathy is ill… I told them all to stay away from me! It’s now less than two weeks until my heart operation… I received my instructions from the doctor, and I’m ready! The Moody Blues greet me this morning with their song: The Other Side Of Life…
Well, the week ended last week, ahead of the 3-day holiday weekend, with the dollar getting sold… The selling of the dollar began on Thursday, and continued on Friday… The BBDXY ended the week at 1,246, down over 4 index points total… Gold ended the week up $4 at $2,3333.30, and Silver ended the week up 25-cents at $31.31… It was an ugly week for these metals, shoot Rudy, even Copper got ugly too… The short paper traders had the con on the trading last week, until they didn’t on Thursday…
Yesterday, with the short paper traders at home on their patios with their Weber grills going, Gold gained $17, and Silver gained $1.30 I have a friend that lives in Canada, and he sent me a note yesterday, letting me now that Gold & Silver were rallying… (thanks Craig!) I responded, “Yeah, the short paper traders are at home today!” Gold closed at $2,351.50 yesterday, and silver closed at $31.80…
The price of Oil saw its biggest one-day drop in a month of Sundays last week, and fell to a $75 handle, but calmer heads came back on Friday and the price of Oil closed the week with a $76 handle… And the yield on the 10-year rose late last week to close the week with a 4.47% yield…
In the overnight markets last night…The dollar drifted around, but didn’t move decisively one way or the other and trades in the same clothes as it wore on Monday, you know the ones that show that the dollar is 1,246 in the BBDXY… Gold is up a buck to start the day, and Silver is down 7-cents to start the day… No biggie, and easily turned around for Silver, so if you’re going to buy today, make sure you do it early, while Silver is off a bit… I have to say that I am impressed at how Gold & Silver put together the pieces after the short paper traders made a mess of them early last week… These two metals are heading to their lofty figures of two weeks ago.
The metal that has been taken to the woodshed over and over again in recent trading sessions is Copper… Copper had traded over $5 before the short paper traders sent Copper to the woodshed… I look at this way, Copper was booking gains every day, and when that happens, you step aside and wait for the next bus… Now that Copper has backed off a bit, it’s time to board that bus and head downtown!
The price of Oil gained another buck overnight and trades this morning with a $79 handle… Don’t know what Oil traders were thinking last week, taking Oil down to $75… But it’s water under the bridge now.. Look there, I just mixed Oil and water, and they say it can’t be done! HAHAHAHA!
The 10-year’s yield is 4.47% to start the day/ week this morning… It will be interesting to see if the bond boys want to take this rise in yield further, or not…
So what caused the weakness in the dollar and bonds late last week? Well, it seems that for once, the markets looked under the hood and saw quite a different picture than what the Gov’t was trying to show them… it all came with the Durable Goods Orders… April Durable Goods orders surgied 0.7% MoM (vs. -0.8% MoM expected). However, March’s +2.6% MoM surge in orders was revised down to a +0.8% MoM rise. This is the third month in a row of MoM gains for durable goods new orders.
With the markets finally noticing that something fishy was going on with this Gov’t Report, the took the viewpoint of: The economy is not doing as good as the Gov’t would have us believe, and therefore we could very well see a rate cut in the coming months… And bonds got mixed up in the dollar selling, as treasuries were sold, as the vessel to get the dollar lower…
I even read a report this past weekend where the writer was calling for 5 rate cuts this year! Wait, What? Yes, he truly believed that the Fed Heads will go all in on saving stocks for the elites… Here’s the headline: “Fed will cut five times this year, driving gold to $3000 by H1 2025 – Citigroup’s Max Layton” Well, I’m from Missouri, and I’m going to need the proof before I believe that… But the markets believe it, and that’s all you need to get the dollar sold, and gold to rise… I’m just saying…
I read a report this past weekend about Commercial loans at Banks… and how they are really beginning to become real problems for the banks that hold them… Pretty soon, I think that the Fed Heads will have no other choice but to print tons of money to help the banks… We all know what all that printing led to previously, right? Yep… inflate or die…
Either choice will bring about the end of the U.S. Empire… It’s already cracking around the edges, and just needs one major setback of any kind to bring about the end… This is definitely a case of this being quite Evident, but not Imminent… right now that is…
You know every time I begin to think that the dollar has seen its best days, the PPT arrives with their arms full of cash and buys dollars and sells the currencies to protect the dollar… But sooner or later this will all come to an end, and then the dollar will be on its own, and I don’t like its chances…
Here’s Bloomberg.com with their take on the dollar : ” Bullish sentiment on the dollar is rapidly receding amid signs the US economy is cooling, with a group of investors holding a net short position for the first time in six weeks.
While leveraged funds still held bullish wagers on the greenback last week, they were dwarfed by increased net dollar shorts owned by asset managers, Commodity Futures Trading Commission data show. “
What will it take to get the “leveraged funds” to turn to the dark side with the asset managers? Well, they need to take some major losses in their shorts, and then they will turn to the dark side…
I say the dark side, because it’s anti American dollar… But here’s the thing, if you simply take the “American” out of it, and just say it’s the dollar and then look at the fundamentals around the dollar… I’m just saying…
The euro, the offset currency to the dollar, after treading water to keep its head above the water line in the early part of last week, was back to booking gains VS the dollar later in the week. The Big Dog, euro, is once again within’ spittin’ distance of the 1.09 figure… And remember when I told you about the short traders in Aussie dollars a few weeks ago? Well, they continue to get their shorts handed to them as the A$ continues to inch higher…
And we all know that what’s good for the goose is good for the gander, right… Well, what’s good for the A$ is also good for the New Zealand dollar/ kiwi…. And don’t forget that kiwi also enjoys the one of the highest interest rates in the industrialized world…
The best performing currency the last couple of trading sessions has been the Russian ruble… There were reports this last weekend that the Russian leader was open to ending the war… So… to me this is how I view it, we have one war probably about to end, and another in Taiwan about to start… Geesh, when will they ever learn? I shake my head in disgust at the war mongers…
The U.S. Data Cupboard doesn’t really have much for us to start the week, and will end the week with the Fed Heads fave inflation calculation… The PCE (personal consumption expenditures) and it will print on Friday this week… Before then we will see a 1st revision to the 1st QTR GDP, which was already revised down to 1.7%, and this revision is thought to be another downward revision to 1.2%… Shoot Rudy, by the time they get finished revising this GDP downward, it’ll be less than 1%… Now this is where I’ll remind you all that when the first GDP print came out, I said that it would be revised downward, and not to take the lofty print then, as gospel…
To recap… After an ugly first part of the week, the currencies and metals fought back and ended the week on a high note… yesterday, of course, saw the short paper traders at home, and so Gold & Silver were able to rally strongly, without interference! Chuck talks about the Empire coming to its end, and could we really see 5 rate cuts this year?
For What It’s Worth… Well, to me it was only a matter of time before Russia played the game that the Western countries played with their funds… This outcome can be found here: Russia Confiscates €800 Million From Deutsche Bank, Unicredit And Commerzbank | ZeroHedge
Or, here’s your snippet: “After two years of being on the receiving end of a weaponized global reserve currency, getting booted from SWIFT, countless (toothless) sanctions and watching some $350 billion of its assets be frozen and soon confiscated, Moscow has had enough, and over the weekend the FT reported that a St. Petersburg court seized around €800 million worth of assets belonging to three western banks – Deutsche Bank, Commerzbank and UniCredit.
The seizure marks one of the largest moves against western lenders since Moscow’s invasion of Ukraine prompted most international lenders to withdraw or wind down their businesses in Russia. It comes after the ECB told Eurozone lenders with operations in the country to speed up their exit plans.
According to court documents, the court seized €463 million-worth of assets belonging to Italy’s UniCredit, equivalent to about 4.5% of its assets in the country, according to the latest financial statement from the bank’s main Russian subsidiary.
Frozen assets include shares in subsidiaries of UniCredit in Russia as well as stocks and funds it owned, according to the court decision that was dated May 16 and was published in the Russian registrar on Friday.
According to another decision on the same date, the court seized €238.6mn-worth of Deutsche Bank’s assets, including property and holdings in its accounts in Russia. The court also ruled that the bank cannot sell its business in Russia; it would already require the approval of Vladimir Putin to do so. The court agreed with Rukhimallians that the measures were necessary because the bank was “taking measures aimed at alienating its property in Russia”.
Finally, on Friday, the court also decided to seize Commerzbank assets, but the details have not yet been made public so the value of the seizure is not known. Ruskhimalliance asked the court to freeze up to €94.9mn-worth of the lender’s assets, and it is safe to assume that the final amount will be in the range.
Altogether, some €800 million in Western bank assets will be confiscated.”
Chuck again… what did I say above about what’s good for the goose? it applies here for sure!
Market Prices 5/28/2024: American Style: A$ .6667, kiwi .6165, C$ .7341, euro 1.0878, sterling 1.2792, Swiss $1.1004, European Style: rand 18.3038, krone 10.4731, SEK 10.5288, forint 352.75, zloty 3.9087, koruna 22.66.07, RUB 88.48, yen 156.69, sing 1.3472, HKD 7.8106, INR 83.18, China 7.2450, peso 16.66, BRL 5.1438, BBDXY 1,246.22, Dollar Index 104.39, Oil $79.13, 10-year 4.47%, Silver $31.73, Platinum $1,050.00, Palladium $975.00, Copper $4.83, and Gold… $2,354.34
That’s it for today… I have nothing on my agenda for this week! YAHOO! kind of… That means I have no where to go, no one to see, now that’s sad… Oh well.. This week we’ll begin June, and in June I’ve got plenty of things going on so I’ve got that going for me! HA! And then the month of July will go by so fast, because the first part of it I’m cruising, and the second part of it I’m back in Florida with my son’s family… Just laying the groundwork here so that it doesn’t come as a surprise to you when I’m not going to be writing… Bob Marley and the Wailers take us to the finish line today with their song: Get Up, Stand Up! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler