- The dollar gets sold on good news
- China’s GDP surprises on the upside
Good Day… And a Marvelous Monday to you! Boy, oh boy, did the data late last week do something to the dollar? It was a chili weekend here in the Midwest… The first of the fall… I’ve said this before, but I think this is the best whether we get here… The mornings are chili, but not cold, and day’s warm up to where you shed that sweater you had on earlier… And the sun seems to shine more… Oh, well, I know you didn’t sign on to get a weather update… The great Al Stewart greets me this morning with his song: Year of the Cat…
Well, the dollar stopped gaining on Thursday and hasn’t paused in its decline since then… The BBDXY is 1,222 this morning and if Thursday and Friday’s action leads into today’s, the BBDXY has further to decline… I’ll go over the data later, but for now, just know that sentiment changed on Thursday.
Gold/Silver took the dollar’s problems and ran with them. Gold gained to end the week at $4,164, and Silver… Well, it gained more than $2 over the two days but only to see a $56.87 a figure to go into the weekend. Silver had been beaten down so much that that to have a good day, only meant that it was not down so much… Not that Silver is running hot….
The price of Oil reached $100 again… all it took was for the fighting to pick up a bit… The price of Oil went into the weekend at $101.47, and the 10-year Treasury saw major buying the last two days of the week and its yield fell to 5.08%
In the overnight markets last night… the dollar has continued to get sold and starts today at the aforementioned 1,222 in the BBDXY… It was so overbought that this is taking the shine off of the dollar and bringing it back to earth.. Gold is flat to down 20-cents to start the day, and Silver is up 56-cents…
The price of Oil has slipped a buck overnight at starts today/week at $100, still quite the run up for the price of Oil, don’t you think? A couple of weeks ago there were people saying that the price of Oil was going back to pre-war levels… I hope they got caught with their pants down…
And the ten-year got back to task at hand overnight as its yield gained 2 bps to 5.10%…
Well, China really threw a cat among the pigeons overnight when they reported that their GDP grew at 4.75%… This is a faster rate of growth that the observers had predicted for China… I was told by a smart fellow that lived and worked in China for years that you should only expect ½ of whatever they report… Believe what you want, the Chinese allowed a big revalue of the renminbi and this morning it trades with a 6.67 handle… That’s a dinger for those of you keeping score at home…
The data last Thursday and Friday saw the U.S. data very strong… So why the selling of the dollar? Well, the dollar got bought on weak data, so I guess this is an opposite reaction to the weak data… That’s all I can think of right now. For the data all pointed to a FOMC rate hike in December… But the dollar got sold… To think about this rate hike possibility is to whack your head against the wall… But, after doing that you come to the realization that another rate hike is just what the bond servicing needs…
Oh, it was reported late last week in the fiscal year of 2026, our debt was $1.99 Trillion… just a hop, skip and jump from $2.0 Trillion a year… At this rate it will only take a few less years to reach $50 Trillion in current debt… And for once in a blue moon, it appears that everyone is looking at the dollar’s future and trading it accordingly….
So, the data was strong, eh? Yes, it was things like the STUPID CPI that threw a spanner if the works… The SUPID CPI showed that it had grown to 3.7% , and a rate hike was on the way… Then Retail Sales showed that consumers are not out of ways they can pay for things… Retail Sales for Sept. Were up .8% following Aug’s. 1.2%… so, when we get the consumer credit (read debt) report it should be a doozy…
Then on Friday we saw the Capacity Utilization report for Sept, and it showed an increase of .07%… That’s better than the August report that showed a flat figure… So, all-in-all, the data pointed to a rate hike in December… On that while the Fed Heads think will help with inflation, but they are wrong, will only make the country’s fiscal situation worse!
To recap… The dollar is on the run from a rate hike.. I know that sounds strange on the outside, but looking at it from the inside, you see that our cost of bond servicing is only going higher and our debt will suffer more than you see what I mean… China’s GDP surprises on the upside, and our fiscal sheet shows that we booked another $1.99 Deficit…
For What It’s Worth… This article is about how inflation is the downwind of CPI, like I’ve always told you, and will difficult to reign it and it can be found here: Inflation Is ‘Broadening Out’ As Producer Prices Soar Most In 4 Years | ZeroHedge
Or, here’s your snippet: “After yesterday’s accelerating CPI scare, this morning analysts expected a concomitant surge in producer prices – the big question remains whether it’s all energy… or are price-hikes ‘broadening out’ making The Fed’s job harder.
Headline PPI exploded higher in September, rising 1.3% MoM (more than double the 0.6% expected and biggest monthly jump since March 2022), dragging producer prices up 6.3% YoY (+5.4% exp) – the highest since Dec 2022…
Energy dominated the surge in prices…
Final demand goods: Prices for final demand goods advanced 2.6%, in September, the largest increase since data were first calculated in December 2009. Over 80 percent of the broad-based rise in September is attributable to the index for final demand energy, which jumped 10.8 percent. Prices for final demand foods and for final demand goods less foods and energy advanced 1.2 percent and 0.3 percent, respectively.
Product detail: Half of the September increase in the index for final demand goods can be traced to prices for gasoline, which jumped 20.3%. The indexes for diesel fuel, fresh and dry vegetables, jet fuel, residential electric power, and crude petroleum also rose. In contrast, prices for chicken eggs dropped 39.7 percent. The indexes for thermoplastic resins and materials and for commercial electric power also declined.
Final demand services: Prices for final demand services moved up 0.8% in September, the largest rise since advancing 0.8% in April. Nearly half of the broad-based September increase can be attributed to a 1.4-percent rise in margins for final demand trade services. The indexes for final demand transportation and warehousing services and for final demand services less trade, transportation, and warehousing also advanced, 3.4 percent and 0.3 percent, respectively.”
Chuck again… The article is very long and you can read it is its entirety by clicking the link above…
Market Prices 10/19/2026: American Style: A$.6983, kiwi .5669, C$.7090, euro 1.1214, sterling 1.3315, Swiss $1.2108. European Style: rand 16.4397, krone 9.4126, SEK 9.9037, forint 323.28, zloty 3.8974, koruna 21.7027, RUB 82.63, yen 158.36, sing 1.2798, HKD 7.8483, INR 94.92, China 6.6796, peso 18.40, BRL 5.0503, BBDXY 1,222, Dollar Index 100.43, Oil $100.83, 10-year 5.10%, Silver $57.68, Platinum $1,656.00, Palladium $1,152, Copper $65.20, and Gold… $4,165
That’s it for today… Well, tomorrow is my annual health check, so no Pfennig tomorrow…My head and forehead look like I stuck my head in a buzzsaw… I hope this is the beginning of it all healing… But I kind of doubt it… And it keeps me up at night, with the itching that it causes… I don’t scratch it, just rub it… But, it does no good… UGH! Wear a hat when you’re out if the sun, folks… I wish I had as a young man… Stevie Guitar Miller takes us to the finish line today with this song: Living in the USA… I hope you have a Marvelous Monday today, and Please be Good To Yourself!
Chuck Butler