- The dollar gets bought on Tuesday…
- Copper sees short paper trading too…
Good Day… And A Wonderful Wednesday to you! A real bummer of a day yesterday down south… The overcast, windy weather remained in place, thus making it difficult to sit outside and enjoy the sun… In fact, it made it impossible to do that! UGH! I’ve been here a week now and have only seen the sunshine two days… And then it was fleeting… Back home they have been experiencing like weather with lots of rain and cold temps… Like the song goes, “The sky won’t snow, and the sun won’t shine”… Stevie Wonder greets me this morning with his song: Superstition… Stevie Ray Vaughan did a great job remaking this song too…
Well… not being data dependent is what the currency traders were yesterday, as they bought dollars to the tune of 5 BBDXY index points! I didn’t see the dollar strength in the euro trading, as the single unit remained above 1.09… Gold started the day up and ended the day up, but not as much as earlier in the day, with Gold’s gain at $2.10, and Silver started the day flat, and ended the day down 12-cents… Gold closed at $2,030.20, and Silver closed at $22.98.
While Gold is hanging out here, you might as well call my metals guru, Tim Smith at 1-800-926-4922, and have him buy some physical Gold for your account… I’m just saying…
One metal, Copper, has seen some wild trading in recent days… Just last week Copper was as high as $3.86, and today it is $3.76… The well known shortages in Copper are out there folks, and the only thing keeping Copper from running higher is the short paper traders… Their efforts with Copper haven’t gone unnoticed by me… I’m just saying…
The price of Oil remained range bound, and ended the day with a $72 handle yesterday… Bonds seem to be in a range above 4% right now, not knowing which way to go… I’ve got a great report and something that I’ve been talking about a lot, in the FWIW article today… You DO NOT WANT TO MISS THAT!
In the overnight markets last night…. There wasn’t much oomph in the markets last night, as the dollar drifted lower, but with no conviction to really sell the currency. The BBDXY lost 2 index points last night, but like I said, there wasn’t much movement in the actual currencies, so I have concluded that there was no conviction to sell dollars last night… No data, no currency direction… That seems about right to me! Gold is up $3 to start the day today, and Silver is up 2-cents… So, no great shakes there either… Hmmmm…. The price of Oil remains in the $72 handle, and bonds remain in their range of 4.00% to 4.05%, with the 10-year’s yield at 4.00% this morning.
Well, did you hear this story that the SEC’s Twitter account was hacked, and the hackers sent out a Tweet that the Bitcoin ETF had been approved? That sent shockwaves through the crypto market, until it was discovered that the SEC’s Twitter (X) account had been hacked…
And that brings me to something that has been on my mind for ages now… Hackers… Every day, I have to fish emails out of my email box that have nothing but bad intentions attached to them… Why? If we put these boys and girls behind the desk and told them to find a cure for cancer, they could probably do it! Well, maybe be of help finding it, but still you get my point… Have them do something good for society, instead of wrecking it… I’ll get back to the markets now…
Well, word out this morning is that the Eurozone probably went through a recession in 2023… It’s amazing to me that these things get figured out months later, but it is, what it is… I know one thing and that is that Eurozone inflation has dropped quickly… Probably too quickly, as it gives the Eurozone leaders a false sense of security, and a job well done… The European Central Bank (ECB ) is torn between two lovers here… one lover is that the would love to cut rates to boost the sluggish economy… the other lover is that they have a spine, and that spine tells them that they need to hold to tight monetary policies… Torn between two lovers, feeling like a fool, loving both of you is breaking all the rules!
The thing that keeps coming back to bite the ECB in the rear, is that the euro is the offset currency to the dollar, and just recent trading tells us that the euro will rise when the dollar get sold, no matter what the situation in the Eurozone warrants… At year-end, when the dollar was on the ropes, doing the rope-a-dope, the euro climbed to the 1.10 handle… I’m just saying…
Longtime readers know that I adore Stephanie Pomboy, and the work she does at macromavens.com … She’s always on Twitter giving us little messages that are like dropping little grenades along the path as she walks… Yesterday, she was talking about Leveraged Loans let’s listen in: “Leveraged loans backing LBOs dried up in 3Q as investor appetite for risk disappeared. Indeed, the cost of LBO financing skyrocketed in terms of interest rates.” This is important because these Leveraged Loans keep the economy moving… We’ll have to keep an eye on this going forward…
The U.S. Data Cupboard had the Nov. Trade Deficit for our viewing yesterday… The Nov. Trade Deficit was $63.2 Billion… Recall that in Nov. the dollar was still holding to its gains, but was slipping quickly… I would think that the December Trade Deficit will be much larger that in Nov. because the dollar was much weaker in December… I’m just saying… You know I’ve explained this before, but here goes again… A weak currency will invite inflation to come to its shores from other countries… And a strong currency does wonders for combating inflation for a country…
So, going back a couple of years, we had a strong currency, and strong inflation! Imagine if you will what Inflation would have run up to, if the dollar was weak, like it was in the 70’s when inflation ran 14%…
To recap… The dollar kicked some tail yesterday, rising 5 index points in the BBDXY… I have no idea why the dollar bugs were buying dollars yesterday, seems to be window dressing to me… Curb appeal, and other descriptions come in play here… Gold gained $2 yesterday… And $3 overnight… The dollar drifted downward in the overnight markets last night. The Eurozone probably went through a recession in 2023, according to reports this morning… But the euro remains the offset currency to the dollar, and that recession news isn’t enough to stop the euro from rising, when the dollar is getting sold…
For What it’s Worth… Well, I’ve talked about how I thought the bond market rally, since the thoughts of a Fed /Cabal/ Cartel rate cut was coming, was a bear market rally… And there are some real good reasons for me thinking that, and they can be found here: Bond Market Rally Overlooks a $2 Trillion Debt Problem – Bloomberg
Or, here’s your snippet: “Investors are ignoring the cloud of rising deficits around the world.
Right around the start of November, two words suddenly disappeared from the chatter in the bond market: debt supply. As bond prices surged across the developed world day after day, sending yields tumbling and handing investors some much-needed profits, the angst about soaring budget deficits melted away.
But for how long?
Over the next several weeks, governments from the US, UK and the eurozone will start flooding the market with bonds at a clip rarely seen before. Saddled with the kind of bloated deficits that were once unthinkable, these countries — along with Japan — will sell a net $2.1 trillion of new bonds to finance their 2024 spending plans, a 7% increase from last year, according to estimates from Bloomberg Intelligence.
With most central banks no longer hoovering up bonds to bolster economic growth, governments must now entice more buy orders out of investors around the world. To do so, the thinking goes, they will have to dangle higher yields, just as they did when concern about ballooning government debt loads was amplified this summer by Fitch Ratings’ move to strip the US of its AAA credit rating. The rout that resulted sent the rate on benchmark 10-year Treasuries above 5% for the first time in 16 years.
Those jitters may have faded of late — primarily because slowing inflation prompted investors to suddenly fixate on the idea that central banks will start cutting interest rates — but many bond-market analysts argue that, given the current supply-and-demand dynamics, it’s only a matter of time before the nervous chatter picks up. Indeed, bond yields have already lurched higher this year.”
Chuck again… Well, it does my heart good to hear someone else making the same arguments about a bond rally…
Market Prices 1/10/2024: American Style: A$.6709, kiwi .6235, C$ .7476, euro 1.0946, sterling 1.2722, Swiss $1.1725, European Style: rand 18.6277, krone 10.3227, SEK 10.2336, forint 345.01, zloty 3.9637, koruna 22.4763, RUB 89.28, yen 145.05, sing 1.3310, HKD 7.8204, INR 83.03, China 7.1692, peso 16.96, BRL 4.8946, BBDXY 1,225., Dollar Index 102.49, Oil $72.40, 10-year 4.00%, Silver $22.96, Platinum $932.00, Palladium $996.00, Copper $3.76, and Gold… $2.033.83
That’s it for today…. Well, this is a very important message to my readers… The move to Battle Bank has hit a snag, and so for now, you’ll need to go to www.dailypfennig.com to read the letter each day… that is until it shows up in your email box! I watched our Blues game last night on my iPad, they looked pretty good, but, still have problems putting the biscuit in the basket! We had major storms go through Florida last night, reminded me of early summer in St. Louis, where we can watch the storms come right up the I-44 corridor… These storms came from the S. West, which is better than coming from the ocean! The sun is rising this morning and it can be seen! YAHOO! The El Nino weather pattern doesn’t forecast regular weather for Florida this winter… UGH! So, I’ll take the sunny days, with extra vigor! Bill Withers takes us to the finish line today with his song: Lovely Day… I hope you have a Wonderful Wednesday, and please, please Be Good To Yourself!
Chuck Butler