- Currencies and metals rally on Friday and overnight
- U.S. Treasury to issue a boat load of bonds this week…
Good Day… And a Marvelous Monday to you! Well, my beloved Mizzou Tigers laid an egg on Saturday and lost badly… They are now officially out of the College Playoffs, as if they really had an opportunity to get there anyway… Went to dinner with some friends Saturday night, yummy! Things seem to be more crowded at this time of year down here, I can only fear when the snowbirds all arrive… Of course, I’m a snowbird, but I’ve been doing it for a long time now, whereas these snowbirds from up East, are newcomers, and have really driven up the price of everything down here… I’m just saying… The Cornelius Brothers and Sister Rose greet me this morning with their song: Too Late To Turn Back Now…
Well, the dollar buying stopped late last week, and on Friday, the day we should have gotten the results of the BLS’s Jobs Report, but didn’t because of the Gov’t Shutdown, the dollar saw 2 index points shaved from the BBDXY and the euro climb back above the 1.15 handle… The BBDXY ended the week at 1,223…
Gold was kept below the $4,000 figure on Friday, and ended the week up $23 at $3,999… The SPTs made sure that Gold didn’t close above $4,000 so that everyone would see that figure over the weekend. Silver gained 28-cents on the day, and ended the week at $48.22… It will be interesting to see if the physical buyers of Gold are strong enough this week to overcome the SPTs, and Gold gets back above $4,000 for more than just one day…
The Fed observers changed their sentiment late last week, and started to believe that no matter what the ADP Employment Report showed them, the Fed Heads will go ahead and cut rates again in their December meeting… That meeting in December will be December 10th… So, we have a month to read and hear about what people think about the meeting… UGH!
The change in sentiment was the reason for the slippage in the dollar, and the gains in the metals… Fundamentals no longer have a say about the direction of these things, it’s all about sentiment… And quite frankly, I don’t get their sentiment very often… But que sera, sera… Whatever will be, will be…
The price of Oil ended the week trading with a $59 handle… And the 10-year Treasury saw the selling of the bond end, for now, and its yield drop to end the week at 4.10%… (Change of sentiment played here too)
In the overnight markets last night… get this… The Gov’t shutdown might be coming to an end… And the dollar is getting sold! Strange, but follow along… The ending of the shutdown would mean a return to the Fed/ Cabal/ Cartel and what they might be doing at their December meeting… And that has led traders to think that the FOMC will cut rates and that has the dollar getting sold this morning to the tune of 4 index points in the BBDXY…
We start our day/ week with the BBDXY at 1,219… Gold is starting the day/ week getting bought and is up $83 this morning, while Silver is getting bought too, and is up $1.20 this morning… Silver is back to $50 and the STPs must be chewing their fingers nails to the cusp… The SPTs made it clear two weeks ago, that they were not going to let Silver trade above $50 and after the selling was over, they tried to keep below $40, but that dog wouldn’t hunt, so they settled on keeping it below $50…
But look where we are this morning… Over $50! Gold is back over $4,000 and that was quite the tipping point for the SPTs… They can’t stand to see Gold over $4,000, but here we are again… This time, I think that both Gold & Silver will be able to hold onto their new levels and even add to them… So, did you take advantage of the cheaper levels in Gold & Silver when I pointed them out to you? hmmm…
The price of Oil remained trading with a $59 handle, and the bond boys are thinking like everyone else now that the FOMC will cut rates again in December, and therefore the ratchet the yield of the 10-year higher. The 10-year sits this morning at 4.12% yield.
The U.S. Treasury will auction new three-, 10-, and 30-year debt and this week’s refunding will total $125 billion… Do you think that foreign investors will take the current yields on those bonds and say, Thank you, may I have another, please?…. Well, if you do, I have a bridge to sell you… Rather, I think that foreigners will demand higher yields to buy our debt…
That means that mortgage rates, which had slipped a bit lately, are going to ratchet back upward… You know, I was thinking the other day about Housing… And how the lower mortgage rates wouldn’t help Housing Sales, because the mean price of Housing has gone through the roof! Houses are so expensive that the middle class has to pass on buying Houses these days… I can’t put my finger on the report to give you the actual numbers, but the difference between 1990 and 2020 in home ownership of younger folks was amazing… 2020 showed that home ownership had fallen by a great percentage…
In keeping with the change in sentiment thought, I found this on CNBC.com ““U.S. Challenger jobs data indicated a spike in U.S. job cuts, suggesting a possible cooling in U.S. labor market conditions,” Westpac wrote in a research report.
Traders ramped up bets on a rate cut even as Chicago Federal Reserve President Austan Goolsbee said on Thursday the lack of official data on inflation during the government shutdown “accentuates” his caution about cutting interest rates further.”
Chuck again.. Yeah, the Fed Head Goolsbee is attempting to cool down the calls for another rate hike there… That’s all, don’t get caught up in the Fed Speak!
Did you hear the hub bub about Chat GPI’s CEO mentioning that the Gov’t should look to bail out the company? Let’s see Chat GPI has taken on $1 trillion in deals (while still managing to lose $11.5 billion) but no bail out for you! David Sacks who’s now the White House AI and crypto czar, said “There will be no bailout of AI…”
Chuck again, Whew! I thought the Gov’t had gone loco (more than usual) here and would entertain the idea!
Ok, back to other stuff… The U.S. Treasury told everyone on Friday that they are going to increase the size of Treasury issuance… No really? You mean the Country is going to spend more and need additional funding? I would have never imagined that could happen? Did you? HA! Just another reason that you should only be buying 3 years and in on Treasury maturities… I’m just saying…
The long end of the bond curve is much more volatile and subject to rate cuts… so, use your head here…
Remember when I told you that the bond boys at Deutsche Bank were shorting the 10-year Treasury back at the beginning of the year? Well, they are still at it… FYI… And if the yield of the 10-year does climb higher, like I talked above, then they made the right trade…
The Gov’t might be ending their temper tantrums and the Gov’t Shutdown… Just think of all those travelers since Friday, and that had their flights cancelled and had to rebook a flight…. I think that was the straw that broke the camel’s back, folks… I’m just saying…
The U.S. Data Cupboard is still empty but there was news on prices this year. This weekend, consumer’s attention began to focus on Thanksgiving… And that’s where they found the price of Turkeys is up 75% this year from last year… Factors like disease problems and production shortages are shaping market dynamics—and ultimately, the price of your Thanksgiving turkey. So, shop early for deals… I’m just saying…
To recap… The dollar buying appears to be over, with the dollar getting sold a bit on Friday, and then a lot overnight… The BDDXY is down 7 index points from where it sat on 11/4 (1,226) Gold & Silver are back above levels that had brought the SPTs out previously… The Treasury will issue $125 Billion of new bonds this week… What will become of their yields? That’s the question of the week… And The Gov’t Shutdown might be ending… keep your fingers crossed!
For What It’s Worth… I came across this last Friday and saved it for today’s FWIW article. It’s about how investors should take steps to protect their portfolios from a dollar collapse and it can be found here: Dollar Faces Risk of 2000s’ Boom-and-Bust 40% Decline, RBC Warns – Bloomberg
Or, here’s your snippet: “Traders should take cover from a protracted selloff in the dollar that could mirror the boom-and-bust cycle of the Internet bubble once the drivers that are supporting the currency turn into headwinds, according to RBC Capital Markets.
The greenback has already been hit hard this year by the uncertainty associated with President Donald Trump’s policies. But it found support from a soaring stock market and US asset allocations from global investors, chief among them mammoth, passive investment funds.
Over the last two decades, these global players have favored increasingly-expensive US assets, particularly stocks, with flows in turn favoring the dollar, RBC currency strategist Richard Cochinos, said.
“This concentration worked well in the past 15 years but poses risks in the current environment,” Cochinos wrote in a note. “A measurable change in demand (and relative performance) can have profound implications in FX.”
Once capital diversifies out of a shock, as it happened after the Internet bubble deflated in 2000, it would presage a deep downturn in the greenback — similar in scope to the US currency’s 40% peak-to-trough decline from 2001 to 2008, he wrote.
Cochinos also listed high valuations, changing trade paradigms and shifting safe havens among challenges for the dollar over the next few years, noting that “longer-term tail risk management should be top of mind as we move into 2026.”
To hedge against a longer-term decline in the dollar’s value, RBC recommends traders tap a range of strategies — from synthetic call options on the ICE US Dollar Index to bullish binary options on the euro and yen.”
Chuck Again… Funny, he doesn’t mention a foreign CD that can be held in U.S. Bank… Like Battle Bank… You know the ones I used to be in charge of at EverBank… You choose the currency, you deposit dollars, and they convert them to that currency and put them into a CD that pays interest. The foreign exchange isn’t FDIC insured, but your dollar value in the foreign currency is… Tim Smith, my old metals guru at EverBank, now heads the currency desk at Battle Bank, I suggest you visit their website and get on their waiting list, it won’t be long now before they begin to take deposits and open accounts!
Market Prices 11/10/2025: American Style: A$ .6531, kiwi .5640, C$ .7133, euro 1.1560, sterling 1.3162, Swiss $1.2406, European Style: rand 17.6969, krone 10.1064, SEK 9.5126, forint 331.63, zloty 3.3163, koruna 21.0118, RUB 81.02, yen 154.16, sing 1.3032, HKD 7.7732, INR 88.69, China 7.1200, peso 18.30, BRL 5.3342, BBDXY 1,219, Dollar Index 99.64, Oil $59.86, 10-year 4.12%, Silver $50.12, Platinum $1,583.00, Palladium $1,434.00, Copper $5.03, and Gold… $4,082
That’s it for today… Ok, this might turn into a good week for everything, except I’m going home on Wednesday… And that reminds me to tell you that there will be no Pfennig on Wednesday as I will be on a plane bright and early! But I’ll be here tomorrow! Veteran’s Day is tomorrow… make sure you thank a Vet for their service at all times, but especially on Veteran’s Day… I read almost a whole book yesterday sitting on the balcony reading… I got up to go to the bathroom and that’s it… I was riveted to the pages of the book, and couldn’t put it down… The Moody Blues take us to the finish line today with their song: The Story In Your Eyes… I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler