The Dollar Gets Ambushed Overnight!

November 1, 2022

* Currencies & metals get sold on Monday… 

* But the overnight markets are a different story… 

Good Day… And a Tom Terrific Tuesday to you! And welcome to November, my most despised month of the year… I’m wishin’ and hopin’ and thinkin’ and prayin’ (Dusty Springfield) that this November will not be like previous Novembers… When I used to work, I had an assistant, named Christine, who was married to a high school basketball coach, and she and I would commiserate together about the start of the month of November… Hey! Christine! I still feel the same way about November, do you?  Our Blues have taken the road to ruins… They lost again last night 5-1!. On home ice no less! This ship is going in the wrong direction, what’s it going to take to get is steered correctly?  The late great, Leon Russell greets me this morning with his song: Tight Rope… 

I’m up on a tight rope, one side’s hate and the other is hope…  Those are lyrics to the Leon Russell song… And that’s what it feels like to me, in the markets these days… There’s hate that Jerome Powell is hiking rates, on one hand, and there’s hope that he’s going to defeat Inflation on the other hand.. .And to me, there’s no hope on either case.. But at least he’s trying, right?  Or, as some people would think, he’s bringing the U.S. economy to its knees on purpose, so that the dark side can then institute their new economy on all of us… OK, Ok, I said it was “some people”… I didn’t say it was a given thought!

So, we ended the month of Rocktober yesterday, on the same note that it was brought in, and that is with the dollar being bought, with no regard what-so-ever, that this dollar strength is making life difficult for countries overseas…  Dollar traders are like, “so what?, that’s their problem to deal with, not mine”… And they’re correct… So, we move on… The dollar got bought hand over fist again yesterday, and the BBDXY gained 9 index points on the day! The euro fell further below parity, and the other currencies all followed the Big Dog euro down… 

Gold lost $18 yesterday, in yet another engineered takedown, of the shiny metal. Silver also lost on the day, this time it lost $10-cents… Gold closed at $1,634.60, and Silver closed at $19.24…  I said yesterday, that with the FOMC meeting this week, and most likely announcing another 75 Basis Points rate hike, and then in the press conference calling for another aggressive rate hike in December, that the dollar would be the currency du jour this week, and when that happens, Gold, Silver and stocks get whacked!

The price of Oil remained trading with an $86 handle throughout the day yesterday… Our friends (NOT!) at OPEC will be finalizing their output cut of Oil in the next day or two, and that should underpin the price of Oil if you ask me… The OPEC members are looking for a $90 price in Oil… It remains to be seen if they achieve that or not… And Bonds… I’m telling you now, so listen to me later, that the price action in Bonds is very weird… I just don’t get it… Yesterday the 10-year’s yield dropped 2 Basis Points to yield 4.02%… That means investors were in buying bonds… Wait, What? Yes, they were buying the 10-year, with the FOMC waiting on deck to hike rates…  Tell me that’s just not weird!

In the overnight markets last night..  the dollar got sold… and yesterday’s gains for the dollar were wiped out. It was like yesterday didn’t happen… The BBDXY lost 9 Index points overnight, and Gold is up $22 in the early trading today… I can’t find anything out there that gives the reason for the buying during the day and the selling overnight…  Silver is up 70-cents this morning, the price of Oil is up to an $88 handle, and bonds… well, that’s another story… Somebody came in an bought tons of bonds last night, as the yield on the 10-year slipped below 4%, to 3.92%…  I’m scratching my bald head over that move…

The two best performing currencies overnight were the A$ and kiwi… kiwi, I get, and have a little feeling for the A$… So, it was about time, in my humble opinion for these two to get off their duffs and move higher! 

So, it was the witching hours for the dollar last night, and we start the ugly month of November, with the dollar getting sold, and Gold moving higher… Now that’s something I can get behind, and if it’s the chill winds of November that brings it on, then I’ll change my mind about November… No wait, no I won’t, those feelings toward November are here to stay for me!

I went pretty long yesterday with the Pfennig, and that will happen when I’m at a loss of things to do / watch, etc. and I start reading articles on the markets… You know, that back in the day, I had gathered quite a list of currency dealers that I talked to all the time… We knew each other’s wives name, kids, etc. and they would supply me with notes they received so that I could see what the traders were thinking… Many of these thoughts would appear in the Pfennig… But when I left EverBank, all those contacts, disappeared… I tell you this so that you know that I no longer have any inside information on the markets, but rely instead on articles online…  

Of course, all of my rants, are usually, just me thinking that things have gotten totally out of hand… 

Back at EverBank, whenever I went deep into something, I would get a call to Frank’s office, and he would tell me that I went too far… Then he would wink at me, and I knew that he was told he had to tell me I went too far, but he didn’t really want to have to tell me that. 

Ok, I digress, here, sorry..  in news of the weird…  the good folks at GATA sent me this from Reuters yesterday, “Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council said today.

Demand for gold was also strong from jewelers and buyers of gold bars and coins, the gold council said in its latest quarterly report, but exchange traded funds storing bullion for investors shrank.”

Now here’s the weird part… in the 3rd QTR of 2022, Gold lost $144 in price… So, how could that be, if there was increased physical buying of Gold by Central Banks in the 3rd QTR?  Riddle me this Batman… how does that happen?

Well, we all know how that happened… Price manipulators made sure that the demand from physical buying didn’t push the Gold price higher, as it should have. I’m going to say this one more time for all of you reading at home… This is the time to load up on Gold.. The price manipulators have made the price of Gold very cheap… And even if you’re not buying Gold to trade it at a higher price like a commodity, and not hold it like a store of wealth, then this is a great opportunity to buy it cheap…  I’ll not got through this again, so here it is, take it for what you went to … and leave the rest!

There are several Central Banks meetings this week, with not just the FOMC Meeting on the docket, the Bank of England (BOE) and the Bank of Japan (BOJ) will also meet this week… I expect rate hikes from 2 of the 3.. with the BOJ being the outlier…

The Bank of Japan (BOJ) has repeatedly said that they will keep their current Monetary Policy in place, and that means negative yields, and bond buying… They are the only Central Bank that everyone watches that has not taken their yields out of negative territory. And the yen has suffered for this transgression… I wouldn’t touch the Japanese yen with your ten-foot pole right now… So there!

Today’s Data Cupboard has the Job Openings and Job Quits, for Sept. and the ISM manufacturing index for Rocktober… I expect the ISM to fall below 50…. we’ll see if the powers that be allow that to happen…

To recap… The dollar got bought by the bushelful yesterday, and the BBDXY gained 9 index points on the day. The euro fell further below parity, and the other currencies all followed the Big Dog euro down…  Yen is back on the selling blocks after being bought last week in a bout of intervention by the BOJ, Gold can’t find a bid again… And Oil could be ready for takeoff after the OPEC announcement of a rate cut in Oil production.

For What It’s Worth…  I’ve been leaving out talk about Central Bank Digital Currencies (CBDC’s) lately, because there’s been little news to talk about, and my spider sense is telling me that’s how the powers that be want it, so it’s out of the minds of people, and when they’re ready to spring it on us, it’s a surprise, shock and awe, and no one is able to mount a challenge. This article brings us up to date, and it an be found here: CBDCs – The Pied Piper – International Man

Or, here’s your snippet: “We all know the story: The Pied Piper has a magic flute that, when played by the piper, saves the people of Hamelin from a rat epidemic. When the townspeople fail to pay him for his services, he uses the flute to attract their children away.

In modern nomenclature, a pied piper is described as “a metaphor for a person who attracts a following through charisma or false promises.”

And that leads us to a discussion of Central Bank Digital Currencies, or CBDCs.

As recently as ten years ago, when writing on the possibility of digital currencies being introduced, the idea was so novel (or perhaps so abhorrent) that my predictions on the subject were considered to be fanciful. Yet, by 2016, announcements were being made by governments that digital currencies were “under consideration.”

And in the brief time since, the concept has caught on worldwide. Eleven countries have now launched them, and another eighty-seven are either researching them or developing them.

But why is it that bank depositors would accept the introduction of CBDCs?

Well, on paper, they sound great. No more trips to the ATM. No more need for credit cards. No more worrying about carrying around cash. No more purse snatchers – you can carry all your savings on a cell phone and do so safely. All crime could end, as any criminal would leave a trail of transactions for banks to monitor.

And these, of course, are the promises that are being touted by the latter-day Pied Piper – the “false promises” mentioned in the definition above.”

Chuck again… the snippet doesn’t do the actual long article justice, so if you have the time to read it all, click the link above, and enjoy! Well, not enjoy, because it’s not a good story to enjoy…

Market Prices 11/1/2022: American Style: A$ .6463, kiwi .5897, C$ .7389, euro .9942, sterling 1.1561, Swiss $1.0007, European Style: rand 18.0934, krone 10.2409, SEK 10.9415, forint 408.97, zloty 4.7322, koruna 24.6092, RUB 61.47, yen 147.09, sing 1.4099, HKD 7.8498, INR 82.70, China 7.2585, peso 19.75, BRL 5.1414, BBDXY 1,325.35, Dollar Index 110.82, Oil $88.32, 10-year 3.92%, Silver $19.94, Platinum $955.00, Palladium $1,934.00, Copper $3.47, and Gold… $1,656.72

That’s it for today… So… how was your Halloween? I have to say that this was the lamest group of Trick-or-Treaters ever! Most of them didn’t even have a joke!  I had to tell them one to use! I told one girl that was dressed as a pirate, “What does it cost for a pirate to get his ears pierced? … Ready? … A Buccaneer! HAHAHAHAHA! She looked at me like I was an alien!  Oh well…There were some cutie little ones though… I sat outside in the driveway with the fire pit roaring, with neighbors, Paul and Lenore, giving out candy… Paul and I were out there with the fire too late for me.. But it was fun, and so I said what the heck!  Well, onto November…UGH!  The Black Keys take us to the finish line today with their song: I’m A Lonely Boy… I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!

Chuck Butler