- the euro sees selling
- Whoopeedo, the Fed Hiked rates…
Good Day… And a Marvelous Monday to you! Well, my beloved Cardinals last home stand of the regular season wasn’t good… But, since they’ve been eliminated from the Playoffs, the team seems to be playing in a fog… UGH! Only 6 more games left for them to play and then the bitter end will come to another year of not making the playoffs… This missing the playoffs is from a team that used to be in the playoffs quite often, almost every year! Obviously, not the same players, but still… The band, Sweet, greets me this morning with their song: Love Is Like Oxygen…
Well, the mini rally that started about 10 days ago, has become a Bonafide dollar rally now… The BBDXY ended last week at 1,203… That’s 13 index points higher than it was wen what I thought was a mini rally began… So, now we have to deal with that… At first, it was the PPT buying dollars since no one else was… But now, things have changed…
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The FOMC did hike rates on the 16th, by 25 Basis Points and I’m amazed that the FOMC things that this rate hike will do the heavy lifting of lowering inflation. The FOMC did say that they would look to raising them one more time this year (probably 12/9)… And still, I doubt seriously that two rate hikes will lower inflation..
Gold/Silver has done nothing but rally since the Rate hike was announced… How many times did I tell you in the Pfennig that Gold /Silver could rise in price even with higher interest rates? Well, they’re proving my statement… Gold ended the week at $4,371, and Silver ended the week at $63.38… Both metals were higher than their closing prices during the day Friday, but the SPTs were there to keep Gold from going over $4,400 and Silver above $65… The wolf is always at the door, folks… Even when it appears that Gold/ Silver are rallying, they are being kept in check…
The bond boys were at first satisfied with the rate hike, and the 10-year’s yield dropped to 4.93%, but… eventually they came to the realization that inflation isn’t going to be brought lower, and they immediately began to mark up the yield, and it closed Friday at 4.99%
The price of Oil has really been brought down since the rate hike… Oil ended the week at $100.30
In the overnight markets last night… There was no movement in the dollar as it starts the day/week at 1,203… Gold is giving back some of its recent gains and is down $12 to start the day. Silver is on the plus side this morning, up 20 cents…
The price of Oil has slipped more and starts the day/ week at $97… I don’t now why this price has slipped so much as the Strait of Hormuz is still bottled up… But, it is what it is… so, we’ll go with that!
And the 10-year Treasury is seeing some Fed Head buying and thus the yield on the bond has slipped to 4.95% to start our day/ week.
Well, since I’ve been following this, I thought that I would write some more… It came to my attention on Saturday, as I saw around waiting for my beloved Mizzou Tigers’ game to start, that China has unloaded a ton of U.S. Treasuries, once again… The amount totaled $15.4 Billion (no wonder yields are so high again) This represents the lowest amount of Treasuries that the Chinese Gov’t owns since August 2008… And it also represents a gradual lowering of their holdings since 2010…
But $15.4 Billion is quite the large amount to unload in one month, and do you know what they did with the dollars they received for unloading the Treasuries? The bought physical Gold (and probably some Silver sprinkled in, but The Chinese are really into holding physical Gold…
These are very smart people, as they see the risk in owning Treasuries at this time, and they did something about their risk… They unloaded a big portion of it!
Another thing I’ve been talking about for ages now and used to get in trouble with the marketing people when I would talk about the short selling in the metals, but no longer… Because it is what it is, and they could point at me saying things about short selling would scare people from buying… I said HOGWASH!
So, each Saturday Ed Steer send out his letter, and in the Saturday letter, he shows a graph of the metals / commodities, that show the number days of production it would take to equal the short contracts in the assets… Some time ago, I wrote that these shorts were going lower, but not any longer… For Silver it would take 104 days of production… for Gold It would take 70 days of production, and a new one to become a real problem for the SPTS is Platinum and it would take 86 days of production… And Copper has its own following and It would take 30 days of production to equal the short contracts….
If I were king… I would not allow all this short selling, because the SPTs that participate in the short selling, don’t do it to hedge a position… They do it simply to protect their short sales, and to make a ton of cash for doing this simple trick…
The Bank of Japan got in the rate hike mood and decided that they too would make an effort to show their citizens that they are serious about fighting inflation, and hike rates 25 Basis Points last Friday… For a country that held rates below zero for so long, they now have an internal rate of 1.25%…
I had to laugh when I saw their rate hike… As if, 1.25% will fight anything much less inflation in Japan…
Oh, and the Japanese yen saw its value VS the dollar shrink… Yen was 155.50 last week before the rate hike, and yen closed on Friday at 156.88… recall that yen is a European Style priced currency, so as the price goes higher it simply means that that the yen is getting weaker…
A friendly neighborhood Spider reminder that there will be no Pfennig tomorrow, as I will be getting the staples out of my head wound… It’ll be nice to not have to change the dressing on it every day by myself!
The euro has fallen below the 1.15 figure this morning, and when I pulled up the currencies I saw that and thought that the BBDXY would be much higher… And it’s not… The Chinese renminbi traded below 6.70 for the first time in a while. So not all’s lost today…
The U.S. Data Cupboard late last week showed that U.S. Retail Sales grew in the back to school buying by 1.2%… Then on Friday Industrial Production was flat as a pancake (Head East) and Capacity Utilization was the same level as the previous month at 76.3%
The Data Cupboard is empty today and tomorrow, and then its filled with non-market moving data until Friday when Durable Goods are printed…
To recap… The dollar has moved to a Bonafide rally now, who knows why, as our problems remain in place… Gold / Silver have been rallying since the rate hike announcement last week for the U.S. Japan hiked rates too… But they are really far behind the inflation 8-ball… And China unloads tons of Treasuries…
For What It’s Worth… Well, the Chinese weren’t the only major country with bond news, as the U.S. announced that they will be buying $6 Billion in Treasuries, and that story can be found here; Feds to buy up to $6 billion in Treasury bonds in move to ease borrowing costs – CBS News
Or, here’s your snippet: “U.S. Treasury Secretary Scott Bessent said on Wednesday that the agency will buy up to $6 billion in long-term government bonds as part of an effort to curb rising yields and ease borrowing costs.
The Treasury Department vowed last month to “at least” double its bond buybacks to $4 billion to prop up prices. Higher Treasury yields raise borrowing costs for consumers and businesses, and can also weigh on stock prices.
Government Treasury purchases reduce supply, boosting bond prices and reducing yields (Bond yields are inversely related to prices, meaning that as yields rise, bond prices fall.) Rising yields signal that investors are demanding higher returns on Treasurys.
“They are repurchasing bonds that have been around for a while and are a smaller part of the market, but the Treasury thinks this will constrain 20- to 30-year yields from rising and put downward pressure on 10-year yields too,” Mike O’Rourke, chief market strategist at JonesTrading, told CBS News.”
Chuck Again… The games people play now, every night and every day now, Never meanin’ what they say now, Never sayin’ what they mean… I recall that song by Joe South from when I was a young man and I’m reminded of the song every time the Gov’t announces some plan to lower bond servicing costs…
Market Prices 9/21/ 2026: American Style: A$ .7130, kiwi .5753, C$ .7138, euro 1.1483, sterling 1.3289, Swiss $1.2172, European Style: rand 16.7594, krone 9.4148, SEK 9.5101, forint 315.02, zloty 3.7909, koruna 21.1969. RUB 83.44, yen 157.21, sing 1.2751, HKD 7.8453, INR 95.81, China 6.6980, peso 17.19, BRL 5.1421, BBDXY 1,203, Dollar Index 100.77, Oil $97.64, 10-year 4.95%, Silver $66.54, Platinum $1,867.00, Palladium $1,331.00, Copper $6.80, and Gold… $4,367.00
That’s it for today… Well, my time here alone is nearing an end, as Kathy will return on Wednesday… It’s been quiet here this past week, I’ve not gone outside to read for it was 107 one day… But temps are on their way downward, so I’ll be outside this week! My beloved Mizzou Tigers football team won their game on Saturday, it was an ugly win, but a win is a win… Pavlov’s Dog takes us to the finish line today with their 70’s song: Julia… I hope you have a Marvelous Monday today and Please Be Good To Yourself!
Chuck Butler