- The dollar gets old yesterday but gains it right back overnight
- Here we go again…
Good Day… And a Tub Thumpin’ Thursday to one and all… Well, the Dodgers are in the NLCS and await the Brewers who beat the Padres … The San Diego crowds at the games were wild and loud… I remember when the Cardinals used to draw crowds like that back when they used to make the playoffs! I have to put this chemo cream (It’s what the doctor called it) on my head where they froze all the spots I have on my head… there’s a lot of them, so I have to apply it all over! 10CC greets me this morning with their song: Dreadlock Holiday…
Well the dollar didn’t get bought any further yesterday, in fact, the dollar got sold a bit with the BBDXY losing 2 index points… and end the day at 1,223 (the same level it was on Tuesday) I keep saying this and maybe someone will step up and notice.. .The dollar is so overbought in the RSI, that it would take 10 days of selling the dollar before it was brought back to neutral…
Gold/Silver saw those dastardly dudes back at the COMEX yesterday, and they were both short sold throughout the day… Gold lost $52 and Silver not only lost $2.19 but also lost the $60 level.. Aye, Aye, Aye… What the heck is going on here? The SPTs are laughing all the way to the bank… It would take an executive order to stop them… and since there’s nothing coming there, the SPT’s control Silver… UGH!
The price of Oil slid a bit yesterday and finished the day at $89… Gas that you put in your car hasn’t really budged, for the price setters are waiting for a move either way that’s more than buck or two…
And the 10-year Treasury saw its yield subjected to some Fed Head buying after it had climbed to 5.33%… the 10-year closed yesterday trading with a 5.30% yield…
In the overnight markets last night…. The dollar got bought… UGH! I sorta thought that yesterday’s slippage was going to lead to more selling in the dollar, but I was wrong to think that… The BBDXY gained back the 2 index points it lost yesterday, and sits this morning at 1,225.
Gold is up a bit this morning $11, but Silver continues to get sold… This morning it’s $1.02 as it fell through the $59 handle and sits this morning with a $58 handle… The SPTs haven’t taken any prisoners with the precious metals… Only Copper seems to go through this gauntlet unscathed..
The price of Oil bounced higher overnight by $3 as an oil tanker was attacked in the Gulf… signs that things have not changed,,, Here we go again! the 10-year Treasury’s yield saw a slight upward move to 5.34%…
Well, I read last night that traders are betting that there’s going to be a downward movement in interest rates… I then received an email from the Fed/ St. Louis, telling me that there will be 3 more rate hikes… I tend to not believe the Fed / St. Louis because, they are the Fed/ Cabal/ Cartel and they have been wrong so many times that it’s beginning to be funny…
The FOMC’s meeting minutes said that they most likely will hike rates again before year-end… That’s 12/9 the next FOMC meeting…
But, that’s a strange idea isn’t it? That is of rate cuts… They had better cut rates or else our bond servicing (interest) will go through the roof! And besides as Bill Bonner told us yesterday and I’ve been saying for decades now. That the Gov’t wants higher inflation to make our debt not seem so bad… They would make $20 turn into $10 and we’ll see what happens then…
The euro lost the 1.12 figure Tuesday and hasn’t climbed back to 1.12 just yet…And all the other currencies have been sent to their respective sick beds and told to remain there for everyone to figure out that the dollar is overbought! Warning: Broken Record being played here; There’s just one currency holding its ground VS the dollar and it’s the Chinese renminbi..
The yields on bonds Globally are moving higher and here at home we’re seeing them reach 25 years highs… And the idea going around is that no one wants to be long Treasuries…. They can buy Gov’t bonds elsewhere and be able to sleep at night… So, here in the U.S., buying bonds has been tricky… You buy them and lock in the yield for whatever maturity… And then the next day, the yield on the bond goes up some more.. .Now you have a loss (bond yields move in opposite of price, when the yield goes higher the bond price goes down)
Try selling the bond down the road cause you need the cash for something else… it won’t be worth the money you paid for it… Uh-Oh!
And regarding the dollar, I believe that when something gets a ton of cash spent on it, there’s going to be problems…
Look at Gold… at the start of this year, Gold was on everybody’s to buy list.. Shoot Rudy, even taxi drivers were talking about at what price they bought Gold… And then one day, Gold’s price stopped going higher, and it began to lose ground… I was told as a young man that a star burns the brightest right before it burns out… And it played in the sandbox well with Gold… So, I see the same thing happening with the dollar… Don’t you? If so….
You should be looking for more currencies to buy… I remember Ty Keough on the trading desk tell a customer, “Yes, the currencies are cheaper which means you can buy more of the currency” And when he got off the phone, I told him, Great explanation Ty…. Good job!
The U.S. Data Cupboard saw the Consumer Credit (read debt) and it actually printed when is was scheduled! The August reading here was interesting because it was only $8.3 Billion when the previous month it was $15 Billion… this could mean one of two things… The first is that we as consumers spent less because we wanted to… or second, we as consumers have run out of room on our Credit Cards and didn’t have enough cash in the bank…. I suspect that it is the latter of the two… But then I’m jaded…
To recap… The buying of the dollar ended yesterday as the dollar saw some selling and the BBDXY lost 2 index points to 1,223… The euro has fallen below the 1.12 handle… and it’s not because things are so bad in the Eurozone, but because the dollar has been on everyone’s mind… I can imagine traders waking up and singing: When I woke up this morning, the dollar was on Mind, and the dollar was on my mind….
For What It’s Worth…. Well one thing that the rising 10-year brings up are higher mortgage rates… And that’s what this article is all about, and it can be found here: From 3-Year Lows To 3-Year Highs In Nine Months: Mortgage Rates Surge To 7.49% As Bond Rout Hits Main Street | ZeroHedge
Or, here’s your snippet: “Last December, we wrote that mortgage rates had dipped to 3-year lows. Nine months, one Middle East war and one global bond rout later, they are at 3-year highs.
According to the latest weekly data from the Mortgage Bankers Association, the average 30-year fixed-rate mortgage jumped another 19bps to 7.49% in the week ended October 2, the highest since November 2023, and up from 7.30% the week before, which itself was a fresh 3-year high.
The culprit is not exactly a mystery. Mortgage rates track the 10Y Treasury, and the 10Y just had its biggest quarterly jump since 1994, hitting 5.34% last week, the highest since 2002. And with the long end leading the latest leg of the selloff, this morning the 30Y climbed to 5.70%, also the highest since 2002, while the 10Y was trading around 5.32%.
Below we look at why the bond rout has finally landed on Main Street, what it is doing to housing (spoiler: nothing good), and why the sell-side’s perennial “yields will fall from here” call is now 0 for 9.
Follow The 10Y (Then Add A War)
As Reuters notes, home borrowing rates are up about 1.4 percentage points since US-Israeli strikes against Iran began in late February, closely tracking the jump in the 10Y yield, which was back above 5.3% on Monday. The drivers are the usual suspects: inflation fears from triple-digit oil (Brent was back above $101 this morning as Iran stepped up attacks on Hormuz tankers), surprisingly resilient growth, a Fed that is now hiking, and a bond market that has to absorb record Treasury supply and the AI debt binge at the same time.
And it’s not just a US story. On Monday, we put out this chart showing that global 10Y+ bond yields are now the highest since 2002.”
Chuck again… This is going to stop home buying sooner or later, and I would bet on sooner…
Market Prices 10/8/2026: American Style: A$ .6939, kiwi .5584, C$ .7065, euro 1.1178, sterling 1.3196, Swiss $1.1998, European Style: rand 16.6889, krone 9.5887, SEK 10.0237, forint 328.17, zloty 3.9176, koruna 21.8360, RUB 85.30, yen 158.20, sing 1.2825, HKD 7.8475, INR 96.78, China 6.7038, peso 18.05, BRL 5.0160, BBDXY 1,225, Dollar Index 102.43, Oil $92.67, 10-year 5.34%, Silver $58.92, Platinum $1,652.00, Palladium $1,151.00, copper $6.62, and Gold… $4,123
That’s it for today… Well, my luncheon wasn at a great place and I had great company… we sat for a long time after the food was cleared and swapped stories… It was a lot of fun! The Dodgers and Brewers are the same teams that vied for the NL crown last year… Do they play baseball in the American League? Just kidding… The White Sox are the surprise team so far in that League…. I was treated by my wife who cooked up a steak filet, cheesy potatoes and made a salad for me for dinner last night… Yummmmmmmmm I would rather I cooked the steak out on the Blackstone grill, but it was still good the way she did it… The Mamas and the Papas take up to the finish line with their great 60’s song: California Dreamin’… (I used to be able to play that song on my guitar, but I don’t recall the chords now) I hope you have a Tub Thumpin’ Thursday today and Please Be Good To Yourself!
Chuck Butler