It’s Just Short-Term Trading..

February 23, 2018

* Retail Sales in Canada falter…

* Dollar buying ends in the overnight markets…    

Good Day…  And a Happy Friday to one and all! A much better night’s sleep for your truly last night, has me ready to go this morning! Go where? Nowhere in particular, but once my fat fingers begin flying across the keyboard, only the Shadow knows where they will take us! How about that U.S. Men’s Curling Team? My adopted team for this Olympics, have stormed back from a rocky start and will be in the Gold Medal Game on Saturday! WOW! Tom Petty & the Heartbreakers greet me this morning with what should be my theme song… I Won’t Back Down..  

Another day of very little data here in the U.S. or for that matter around the world… Canada did print their December Retail Sales, and loonie traders wished that the report had not printed! Canadian Retail Sales for December dropped by -0.08%…  That report finished out the 4th QTR, for the Canadian economy, and left it with a sour taste in its mouth, for sure! Especially when a 0.2% increase was expected! This is the worst Retail Sales report since March of 2016, and really points to something that I’ve been warning the Bank of Canada (BOC) about for a couple of years now…  

And that’s the Housing Bubble in Toronto and Vancouver, and how the BOC needed to hiking rates a long time ago… How does this tie in to the awful print of Retail Sales?  Well, look at like this… Home values keep rising, and home owners kept taking equity out of those homes, and spending it, but there comes a time when there’s no more blood in the turnip, right? Well, it looks like this is the time, and if the BOC had nipped the housing bubble in the bud when it had the opportunity, then all this wouldn’t be happening!  

Needless to say the loonie got whacked on the data print, as it should have, and opposite of how the U.S. dollar bugs traded the dollar after the U.S. printed its own negative Retail Sales figure last week! 

Well, the dollar buying ended in the overnight markets last night, and the currencies are attempting to rebound… They’ll need Paul Silas to grad a strong rebound though, as we’re ending the week of not much news, and I get the feeling that traders just want to do their 8 and get out of there today… 

The euro has gotten up off the canvas and climbed back to 1.23 this morning, and the Dollar Index has fallen back below 90 again… Gold saw trading yesterday that it hasn’t seen in a while. The trading volume was 188,000 contracts! That’s it! And without all the short Gold paper trades, Gold saw a rise in its price of $7.40 on the day…  Where were the short paper traders? Maybe they all had to attend continuing education classes yesterday, HA! But I don’t care where they went, and I would hope that wherever they went, that they stay there! They don’t have to go away mad… They just have to go away!   

The price of Oil got a boost yesterday, when the Oil supplies data showed an unexpected drop for last week. But Oil’s rise in price hasn’t helped the Petrol Currencies this morning. I think the Petrol Currency Traders have finally figured out just what the heck is going on here and they aren’t going to be caught going back and forth with the price of Oil any longer!

I would hope that they finally saw the trees in the forest here! I never said that they were rocket scientists!  

In Russia overnight, they printed their latest PMI (manufacturing index), and even with the economic sanctions that the U.S. and Eurozone have placed on Russia, their Feb PMI number gained! The Feb PMI was 52.1 VS 51.6 in January… Remember.. any number above 50 indicates expansion of the manufacturing sector… I’m just thoroughly impresses with the Russian economy given the obstacles it’s had to face… I’m telling you once again that the Central Bank of Russia (CBR) Gov. Elvira Nabiullina is the best Central Banker out there… And that goes a long way toward how the economy reacts, the currency trades and the overall outlook for the country improves!  

Not like the shenanigans that go on in Japan, and the U.S. with our Central Bankers, that’s for sure! 

OK… back to the euro…  It would seem, that if you just looked at this week’s trading that the dollar is once again on top and the euro is getting sold…  But those are short-term moves folks… The upward trajectory of the Eurozone’s economy is still in place, and in my humble opinion, the pricing of the removal of stimulus by the European Central Bank (ECB) hasn’t really begun to set it, which would be a HUGE boost for the euro when it does. 

So, what I’m saying is this… Don’t get your shorts all bunched up over what’s happened this week… It’s short-term trading, and has nothing to do with the new weak dollar trend that’s been in place since the middle of last year.  So, what does this week’s trading present us with? Buying at cheaper levels that’s what!    

So, I’m ending this a little short today, as I can’t make up stuff to write about, and the markets just aren’t giving me anything!  Besides, I’ve got a real treat for you in the FWIW section today… It’s Dennis Miller with some jaw-dropping information on Social Security for us!  

To recap…  The dollar buying ended overnight, and the currencies are attempting a rebound this morning. The euro has climbed back to 1.23, and Gold gained $7.40 yesterday.  Canadian Retail Sales were awful in December, and Chuck points to the root reason why. The loonie got whacked as it should!   No data, no news, a shorter than usual Pfennig today…  

For What It’s Worth… Longtime readers know that I have a good friend, named Dennis Miller, the Retirementor. Dennis writes a letter that’s geared to retirees or investors that are thinking about retiring.  He writes about things that are so important, and when he does, I highlight his writing as I’m doing today…  Please check out     Today’s letter is about Social Security.. 

And here’s your snippet: “Did I achieve a journalistic milestone? I got my first tip from an insider. What I learned is darn important for our readers.

Our article “The Social (IN)Security Charade”, discussed how the government gave us a COLA increase and took it right back by increasing medical premiums.

The tipster confirmed I was spot on – however, I barely scratched the surface. While I prefer interviewing the experts, he politely declined, wishing to remain anonymous (now John Doe).

John’s concerned; all generations need to know the facts, so they can plan accordingly. After following his research suggestions, I’ve come to a conclusion about social security.”  

Chuck Again… This is important stuff folks… please check it out, and while your there, sign up for Dennis’ letter, I think you’ll be glad you did!   

Currencies today 2/23/18… American Style: A$ .7815, kiwi .7292, C$ .7869, euro 1.23, sterling 1.3948, Swiss $1.0703, … European Style: rand 11.6040, krone 7.8656, SEK 8.1612, forint 254.29, zloty 3.3893, koruna 20.5518, RUB 56.64, yen 106.82, sing 1.3223, HKD 7.8222, INR 64.84, China 6.3508, peso 18.59, BRL 3.2603, Dollar Index 89.93, Oil $62.39, 10-year 2.89%, Silver $16.59, Platinum $ 993.75, Palladium $1,037.41, and Gold… $1,331.50   

That’s it for today…  Well, February is winding down next week, and that brings us to March, one of my fave months! As tradition calls for, I’ll be on be on vacation from writing for two weeks in March… I’ll miss you each day, but you can be assured that I’m recharging my batteries for the future!  The Number 1 recruit in basketball last year was Michael Porter, Jr. and he chose to play at my beloved Mizzou! He then got hurt in the first game, had back surgery, and is now cleared to play again! Watch out SEC! And with that, Melvin and the Blue Notes takes us to the finish line today with their song: If You Don’t Know Me By Now…   I hope you can make this a Fantastico Friday, and Be Good To Yourself!  

Chuck Butler