- currencies & metals rally strongly overnight
- China posts a strong GDP…
Good Day… And a Wonderful Wednesday to you! Well, after a night of watching my beloved Cardinals ring the bats in an 8-3 victory over the Astros, the bats went silent last night, and the Cardinals were shut out for the first time this season… UGH! No consistency in this team that’s for sure! The Marshall Tucker Band greets me this morning with their great song: 24 Hours At A Time…
Well, the dollar rallied a bit yesterday, gaining 4 index points in the BBDXY, but the euro remained above the 1.13 handle, so not all was not lost in the currencies… The best performing currency in the last week is the Russian ruble… And posted a gain yesterday to a price of 80… We’ve seen the ruble rally before, only to lose its rally a short time after… So, there’s that… keep in mind that this is an investment and not a political position! And even with this rally the ruble is still a long, long way from the level it traded when we first started offering the ruble… Which was 35…
Gold fought through the short paper trading yesterday to post a gain of $9, and Silver did the same to post a gain of 13-cents… Ok, back to normal trading, and that makes me happy to see… Yes, I was happy with Gold’s $93 gain last Thursday, but that was NOT normal trading.. That was panic with fear buying that the sky was falling… But Chicken Little didn’t get her way, and the sky didn’t fall, so Gold goes back to normal trading…
There’s still fear in the markets folks, but it was manageable to start the week… The VIX has backed off of the level seen last week (52), and had dropped to a 30 level… So, still more volatile than it had been, but not as Volatile!
The price of Oil remained trading in the $61 handle yesterday, and the 100-year Treasury actually saw some buying yesterday, so the yield dropped a few BPS to 4.33%… It wasn’t a HUGE amount of buying, so I don’t suspect the Fed Heads from doing any of their yield curve control buying…
In the overnight markets last night… Well the dollar is back on the chopping block, as it got ambushed overnight getting sold without Treasuries getting sold… So, this selling was just straight out get rid of my dollars selling… The BBDXY is down 6 index points to start our day, and the euro is within spittin’ distance of 1.14…. Gold’s 2-day respite from all the fear buying, ended overnight, as the shiny metal is up $60 to start our day today, and Silver is up 65-cents! Like I said the other day, I’m not going to shake stick at a $60 gain in one day, but I would prefer that the gains were more normal… But I get it… The fear in the markets prevails, and who can blame anyone striking up the fear again?
The price of Oil remained in trading with a $61 handle overnight, and the 10-year Treasury is 4.33% this morning… I did a double take on the 10-year Treasury screen for the yield hadn’t moved overnight, but after refreshing the screen just for good measure, I showed the same figure, so it is what it is…
There was some news overnight from China.. Here’s the skinny from reuters.com: “China’s first-quarter economic growth outstripped expectations, underpinned by solid consumption and industrial output.”
Chuck again… Yes, the 1st QTR GDP Growth in China was 5.4%… That’s a pretty strong GDP without gov’t spending… And the People’s Bank of China allowed the renminbi to gain ground on the dollar overnight…
When China was booking 10+ percentage gains in GDP a decade ago, I used to tell you dear readers that we could believe about one-half of what China told us… I don’t think it’s that bad any longer, so we’ll go with the 5.4% gain and that’s that!
Here’s some good news for the euro that ran in the Bloomberg.com this morning, “Europe’s common currency hit its strongest level in three years at the end of last week as economic uncertainty radiating from US tariff policy raised questions about the dollar’s traditional haven role.
Three out of four options contracts bought Friday were for more euro gains, according to data from the Depository Trust & Clearing Corporation. Traders say hedge funds are targeting a move to $1.20. And strategists at Mizuho International Plc see rising odds that the currency hits that level — the highest since mid-2021 — in the coming months.”
Where is all those naysayers that were calling for the euro to fall to parity with the dollar a month ago? Long time passing. (Seeger) .. It’s been a long… Long time coming, it’s going to b a long time gone… (CSN) I thought at the time when those forecasts were made that they were being a little too hard on the Beaver. (euro), I watched an old episode of Leave It To Beaver yesterday… So there’s that!
Another currency that has been bought like funnel cakes at a State Fair, is the Swiss franc… I was interviewed by good friend, Dennis Miller, for his letter www.milleronthemoney.com last week, and it I was asked who might be the winners and losers in Europe… I talked about the Swiss franc being a winner, along with the euro, IF, their leaders changed some things, and the losers being the Club Med currencies (Greece, Spain, Italy, Portugal) ,for not being able to get their debts in line with the Eurozone requirements… I said in the interview that I thought the Club Med countries would be asked to leave the euro… That’s a strong statement, folks… But as Cliff Claven explained to Norm on the old Cheers show… The slowest Buffalo makes the herd faster… And the Club Med countries would be the slowest Buffalo here…
Remember when I told you here, that the money supply was gaining again? Well, I found his on Mises.org “Money-supply growth rose year over year in February for the seventh month in a row, the first time this has happened since mid-2022. The current trend in money-supply growth suggests a continued reversal of more than a year of historically large contractions in the money supply that occurred throughout much of 2023 and 2024.”
And let me repeat myself here: Money Supply growth is equal to inflation coming… or Money Supply is inflation… No wonder the future inflation outlook for the U.S. is rising daily…
And what have I taught you regarding the Gov’t and inflation for over probably 2 decades now? That the U.S. Gov’t wants inflation , they need inflation, as the only means left to them to deal with the $36 Trillion Debt, they are hoping to inflate the debt down to a workable level of debt… The Gov’t doesn’t care about how the high inflation will affect you and me, and the middle class… So, make sure you have investments that are inflation beaters… Got Gold?
I think the action or non-action in the markets so far this week, (2 days) has had more to do with market participants wanting fresh news, as they had already traded on the news last week. And the Data Cupboard could hold some sway on that front, but then most times in recent days, the markets ignore the Data Cupboard… And I can’t blame them, given all the hedonic adjustments the Gov’t agencies throw into the data prints… But what happened overnight is the question here… The selling of the dollar was strong, I think it has more to do with the comment that the U.S. leaders are trying to get across regarding the delayed tariffs on the electronics from China, and that is that the delay is only temporary… In other words, we think that your euphoria in the tech stocks is unwarranted, and you need to calm down….
Speaking of the U.S. Data Cupboard… Today, we’ll see the color of the March Retail Sales report… As I said yesterday, the BHI (Butler Household Index) indicates that this should be a decent print in Retail Sales… Nothing to write home about, but decent… And positive, after printing a negative number for February. We’ll also see Capacity Utilization and Industrial Production for March… I don’t expect either of those two to ignite dollar buying today, so, we’ll just move along now, for these are not the droids we’re looking for… Oh, and there will be 3 Fed Head speakers out on the road today spilling their lies, and false readings…
Do, you get the feeling that I do NOT hold the Fed Heads in high regard? Geez, I don’t know how that could happen! HA!
To recap… The dollar rallied a bit on Tuesday, gaining 4 index points in the BBDXY, after a getting sold down the river all of last week… Gold gained $9 on the day, and Chuck believes that market participants are awaiting fresh news to trade on. The fear is still out there folks, just not as unbearable as it was last week. The euro, Swiss franc, and ruble are the three currencies Chuck highlights today, let’s hope he didn’t jinx them…
For What It’s Worth… Well, I told you on Monday that I was loaded for bear with FWIW articles this week, but every now and then, I come across a different article that is timelier, and it buts the line with the FWIW articles on tap… This is JPMorgan CEO Jamie Dimon talking about the effects on the economy that A Trade War will cause, and it can be found here: JPMorgan chief Jamie Dimon warns trade war risks recession and higher prices
This is a Financial Times article that worked for me, without a subscription, so hopefully it’s still free to view for you:
Or, here’s your snippet: “JPMorgan Chase chief Jamie Dimon has warned that a global trade war risks tipping the US economy into a recession and driving prices higher, while undermining the country’s long-term alliances.
In his widely read annual letter to shareholders published on Monday, Dimon said the tariffs announced last week by US President Donald Trump “will likely increase inflation and are causing many to consider a greater probability of a recession”.
“The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” Dimon wrote.
He said many uncertainties remained from the planned tariffs, including potential retaliation from other countries and their impact on business confidence, investments and capital flows.
“I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States,” Dimon added. “My most serious concern is how this will affect America’s long-term economic alliances.”
Chuck again… Man, you would think that Mr. Dimon was reading the Pfennig, for these are things that I’ve said previously about a trade war!
Market Prices 4/16/2025: American Style: A$ .6376, kiwi .5919, C$ .7184, euro 1.1366, sterling 1.3268, Swiss $1.2229, European Style: rand 18.8639, krone 10.5798, SEK 9.8270, forint 358.86, zloty 3.7784, koruna 22.0166, RUB 82.39, yen 142.72, sing 1.3139, HKD 7.7600, INR 85.68, China 7.3059, peso 20.08, BRL 5.8860, BBDXY 1,228, Dollar Index 99.57, Oil $61.89, 10-year 4.33%, Silver $32.89, Platinum $ 968.00, Palladium $ 978.00, Copper $4.69, and Gold… $3,295.27
That’s it for today… I’m doing much better these days, my breathing has almost returned 100% to normal, and my heart racing has calmed down… I walked further than I had the previous day yesterday, without problems or needing to stop and rest… I’ll attempt to walk even further today! Yesterday, I talked about how my younger sister, Terri, visited me… I have 2 sisters left after having lost my two older sisters… I told her that I was seriously thinking my time had come with this last hospital trip, and then told her, Grandad died at 70, our dad died at 70, I was oh-so close to 70! But it was not my time… And I thank the Good Lord for that! Our Blues are in the Stanley Cup Playoffs, after missing them the last 2 years! They start in Winnipeg this weekend, the same team they started the playoffs against in 2019, when the Blues won the Cup! Good Karma? I sure hope so! Let’s Go Blues! Three Dog Night take us to the finish line today, with their song: Easy To Be Hard… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler