- The dollar sees some buying overnight
- Our Debt, the gift that keeps on giving…
Good Day… And a Marvelous Monday to you! Well, did your 4th of July celebration go well, without injuries and stuff? I sure hope so! Mine was low key, as it has been for the last 5 years… I really wanted to go out and celebrate, but my body said no way, Jose! I overslept last Thursday, thus the reason for the late Pfennig that day… Stevie Wonder greets me this morning with his song: I Wish…
And I wish, that all this debt would go away… Oh, the things we wish for… I was really mad on Thursday morning last week, first for waking up late, and second for my not knowing what caused the selloff of the dollar… But there it was right before my eye!
Right before my eye, and I had even mentioned it! The BLS surprise labor report that showed 57,000 jobs created in May, was THE reason… As, traders all saw that and said, “no way they can hike rates now”… of course, we all know it was a knee-jerk reaction to the news, of which could be changed next month for sure!
OK, enough of all that… Now onto what happened going into the weekend… But first I want to mention that previous month’s jobs totals were downward revised… See? I told you they would get revised downward, but no one will notice and just move along…
The dollar held its ground going into the weekend, and the BBDXY went into Friday’s close at 1,219. The euro remained trading above the 1.14 figure, so the dollar wasn’t getting any love, just not any hate either! The currencies, as I’ve explained many times in the past, follow the lead of the euro, so as long as the euro is getting bought, the rest of the currencies are seeing some attention too…
The price of Gold ended the week at $4,176 as it was up $52 on Friday… It seems to me that Gold has seen the depths for this cycle of wash, rinse, repeat from the STPs… I said last week that I wasn’t going to go out on a limb again and call for the selling of Gold to have stopped… But this I 3 days in a row that Gold has closed up, so that has to be worth something!
Silver also went in the weekend with a gain of $1.43 and a close of $62.52…
The price of Oil ended the week trading with a $68 handle. But I do expect the price of Oil to be on a downward movement, as the Oil flows out of the Gulf are starting… At least that’s what I read!
And the 10-year Treasury ended the week with a 4.49% yield… I read this past weekend that the 6-year Treasury hit 4% yield last week, that’s quite high for the bond in quite a few years! I think that the bond boys are telling the Fed Heads to get on with a rate hike or two, and ask them what are they waiting for?
In the overnight markets last night… The dollar is in the driver’s seat this morning as the BBDXY starts the day/week at 1,221…. I guess the selling due to the rotten as tomatoes labor report last week, has worn off… Fickle currency traders… That’s all I have to say about that!
Gold / Silver are starting the day/week getting sold a bit. Gold is down $23 and Silver is down 20-cents… It’s as if currency traders thought that Gold & Silver needed to be sold, but not by a lot… Those are easily turned around red figures, so that’s what I’m expecting today…
The price of Oil remained trading with a $68 handle overnight, and the 10-year saw some yield control by the Fed Heads and with that the yield on the bond dropped to 4.46% to start our day today…
The Japanese yen returned to the 162 handle overnight… I guess the Bank of Japan (BOJ) will be entertaining thoughts of wasting more money buying yen only to have the markets bring the currency back to where they believe it should be….
And the Brazilian real continues to hang tough VS dollar strength… while the Euro Wannabes (zloty, koruna and Czech) are still in rally mode, which indicates to me that the dollar buying will be short-lived…
I found this on Yahoo Finance on Saturday…”Some 720,000 people left the labor force in June, helping the jobless rate edge down.
Of particular concern: The labor force participation rate for those in their prime working years fell to 83.3% in June, suggesting the trend wasn’t driven solely by people aging out of the workforce. “
Chuck again… The other thing that was weird about the BLS’s labor report was that those folks that have been unemployed for more than 27 weeks remains at 27% of the total number of jobless people… and the 720,000 number above isn’t just retiring baby boomers… put that in your tea!
Our debt continues to grow… This is really becoming a chase to the bottom, as each month we print a higher than the previous month’s debt total… We can’t escape it… When the debt was around $10 Trillion there was hope that higher inflation would help bring that back down, but now with our debt days away from becoming $40 Trillion we can forget about that!
Above, I talked about all this debt… and then I was reading Bill Bonner’s letter and he explained the problem much better than I… here’s Bill: “Today, an 8% interest charge on $40 trillion in debt would mean an interest hit of $3.2 trillion. As a percentage of GDP that is actually lower than the Volcker shock. But in raw numbers, it is much bigger…and it would be striking an economy that is much more brittle. Federal debt is only about a third of the whole credit load.”
Chuck Again… yes, he was talking about how Volcker raised the Fed Funds rate to 20% to combat 10% inflation… That’s how he got the 8% interest rate as our inflation supposedly is 4%…
And to top things off I read this weekend that Money Supply is soaring! And it has been growing since Rocktober last year… At the end of May it was in dollar terms of $23 Billion… And what have I taught you over and over again about Money Supply? That Money Supply leads right into inflation… So, the Fed Heads may hike interest rates, but that will only increase the yield on T-Bills and short T-Notes, and as long as Money Supply keeps rising, the inflation isn’t going anywhere but up….
The U.S. Data Cupboard doesn’t have anything real to look at until Wednesday this week, and then it’s Consumer Credit (read debt) and the FOMC’s meeting minutes… So, nothing to help the dollar out of its malaise right now, and the only thing the dollar can hope for is for the War to pick up…
To recap… The dollar held on to its level on Friday, as the selling of the dollar abated… Gold /Silver went into the weekend on good terms for the first time in some time for the two… Chuck is all up in arms about our debt again…. And the unemployment numbers were weird….
For What It’s Worth… I spent some time on the BLS’s labor report and then this report just said, “print me” and so I did, and it can be found here: June jobs report shows just 57,000 payrolls, well below expectations
Or, here’s your snippet: “The U.S. economy added just 57,000 nonfarm payroll jobs in June, the Bureau of Labor Statistics said Thursday, falling well short of analysts’ expectations. Analysts polled by The Wall Street Journal had expected 115,000 new jobs. The unemployment rate dipped slightly to 4.2%.
Downward revisions to prior months darkened the picture further. April’s count was cut by 31,000 to 148,000, while May’s was trimmed by 43,000 to 129,000, leaving the two-month combined total 74,000 short of what had originally been reported.
Analysts had anticipated the jobless rate would remain at 4.3% for a fourth straight month, so the dip to 4.2% was a mild surprise — though it was driven in part by workers stepping back from the labor market. Participation slipped 0.3 percentage point to 61.5%, and the employment-population ratio edged down 0.2 percentage point to 59.0%. The number of unemployed people held at 7.1 million.
Average hourly earnings for private nonfarm payroll employees rose 13 cents, or 0.3%, to $37.64 in June. Over the past year, wages are up 3.5%.
The June figure is roughly in line with the average monthly job gain over the prior 12 months, which stood at 36,000, the BLS said.
Federal Reserve officials are next scheduled to meet at the end of July. The report leaves Fed officials with little additional guidance as they continue to debate the direction of interest rates.”
Chuck again… Just thought we would get the Jobs jamboree out of our system today…
Market Prices 7/6/2026: American Style: A$ .6936, kiwi .5696, C$ .7032, euro 1.1416, sterling 1.3344, Swiss $1.2403, European Style: rand 16.2226, krone 9.8385, SEK 9.6500, forint 309.63, zloty 3.7564, koruna 21.1550, RUB 77.65, yen 162.35, sing 1.2935, HKD 7.8426, INR 95.42, China 6.7958, peso 17.47, BRL 5.1693, BBDXY 1,221, Dollar Index 101.06, Oil $68.56, 10-year 4.46%, Silver $62.22, Platinum $1,645.00, Palladium $1,302.00, Copper $6.22, and Gold… $4,153
That’s it for today… Well, on the 4th, I fired up the Big Green Egg and smoked some pork steaks (a St. Louis tradition) and boy were they yummy! My wife even complemented me on how good the pork steaks came out! We are getting near my annual traditional summer vacation… I will last write on July 15th and then return on July 30th…. So, mark your calendars! Sat & Sun I had just gotten finished cooking outside when a rainstorm came on and chased me inside… Emerson, Lake and Palmer take us to the finish line today with their song: Still Your Turn Me On… I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler