June 13, 2023
* currencies & metals rally in the overnight markets
* Bank of Canada gets a Gold star!
Good day… And A Tom Terrific Tuesday to you! Another close game, another loss for my redbirds… I just sit there watching and wondering when the blow up inning will occur… For once, in a blue Moon, the starting pitcher didn’t stink up the place, but the offense was nowhere to be found, especially with runners in scoring position. UGH! It’s going to be a long season, for me… Well, it’s waiting and watching time for the markets, as we grow nearer to the FOMC announcemnt tomorrow afternoon… Oil traders are defying Saudi Arabia, I wonder how that will work out for them? So, we have those things to talk about today, and other stuff that will get thrown in. Paul Mcartney, greets me this morning with his song: Every Night…
Well, as I said yesterday, I didn’t expect the currency traders to go all in on any one-way bets with the dollar, ahead of the FOMC meeting tomorrow. And So it was the case on Monday, with the BBDXY ending the day 1234.90, thus showing that there wasn’t much movement either way in the dollar. Makes sense to me that traders would step away for a break, until they hear what the Fed/ Cabal/ Cartel Chairman, Powell, has to say tomorrow afternoon. I do believe that the fix is in… And that the Fed Heads will show their true colors and not hike rates further… That doesn’t mean that they won’t come back to the rate hike table at a later date, should inflation reamin sticky, but the Fed Heads are like a HUGE Cruise Liner, they can’t turn on a dime, and so, I think if the Fed Heads do not continue to hike rates tomorrow, then that will be the end of the rate cycle… It will have ended before going above inflation, and therefore, inflation will continue…
Gold didn’t fare too well yesterday, but better than in those engineered takedown days, as it posted a $3.20 loss on the day, and Silver lost 22-cents… Gold closed at $1,958.50, and Silver closed at $24.15… The price of Oil fell another buck yesterday, and ended the day trading with a $67 handle… Well, I told you above that Oil traders are defying the Saudi’s claim that 1. they will cut production, and 2. they will find out who’s shorting Oil and punish them… I have an article in the FWIW section today, that address this situation further, so you won’t want to have missed that!
In the overnight markets last night…. Well someone woke up and decided to trade currencies, and he or she decided that the FOMC will pause and that will cause the dollar to weaken, and so they sold dollars. The BBDXY lost 2 index points overnight, the euro is within’ spittin’ distance of 1.08, and the other currencies are all looking healthier this morning… Gold is up $8 in the early trading this morning, and Silver has aded 4-cents to its price….
The price of Oil has recovered a buck in the last 24 hours, and trades this morning with a $68 handle… There’s been little to no movement in th 10-year’s yield, so we’ll move along for there’s nothing to see here…
Well, just when you thought it was safe to return your cash to a bank, along comes best selling author, Addison Wiggen and his thoughts… Take it from here, will you Addison? ““Lines at food banks are getting longer,” warns commentary from Bloomberg. The story they’re referring to begins with a line outside an American Red Cross food pantry line “stretching two football fields” around several city blocks.
The article then takes a trip across the country looking at similar despair in various locations as food costs have outpaced inflation by 50% in many urban areas. Now the S&P 550 Financials chart reveals the sector is headed toward pre-2008 level crisis levels. It took a decade for financials to return to pre-crisis highs.
The danger today is if the banking crisis persists, we could see another route like 2008. And… you can’t have a bull market without strength in the banking sector.”= Addison Wiggen, from The Wiggin Sessions
Chuck again… food lines getting longer, is a reflection on the Gov’t and the adminstration… And when people are in line to get their divy of food, they will be asking others in line, hey, didn’t the POTUS, Treasury Sec, Fed chairman all tell us that the economy was strong and thriving? Well, it was strong and thriving for the Elites… of which we obviously are not a part of…
Ok… enough of that! I forgot to mention yesterday that the Bank of Canada (BOC) hiked their internal rate again, moving their rate to 4.75%… Well, now wth consumer inflation running around 4.4%, the interest rate is higher than the inflation rate, and they could very well see inflation start to narrow in Canada… I don’t know if you noticed this or not, but in yesterday’s currency roundup the C$ had risen to 75-cents, not a huge gain, but baby steps for the loonie…
So, good job, BOC… You get a Gold star!
There are no other major Central Bank meetings this week, other than the U.S. Fed/ Cabal/ Cartel… They get to be on stage all by themseves, and to bask in the spotlight!
Well, longtime readers know that I do not like deficit spending or accumulating debt… It’s just not right… spend only what you take in was what my father taught me, and I have tried to adhere to that all my life… The U.S. Congress, Fed/ Treasury, etal, Are all to blame for this debt mess we are in now… And the deficit spending doesn’t abate, instead it continues to grow and here’s the Committee for the Resonsible Budget: “The Deficit Was $2.1 Trillion Over Past Year
…up 50 percent from the $1.4 trillion deficit in Fiscal Year (FY) 2022 and more than twice as large as the deficit prior to the beginning of the pandemic.
The 12-month rolling deficit is also $170 billion higher than it was last month, thanks to a $236 billion deficit in May of 2023, compared to $66 billion last May. Compared to a year ago, total nominal spending is up 11 percent to $6.6 trillion and revenue is down 6 percent to $4.5 trillion.
As a share of the economy, deficits have totaled 8.1 percent of Gross Domestic Product (GDP) over the past year, over three times the historical average of 2.5 percent and three percentage points higher than 2019.”
Chuck again… You know I’ve always told you that Gov’t Spending was a large piece of our GDP… And without adding Gov’t spending into the mix our GDP would have been negative month after month after month, after month, you get the picture…
The U.S. Data Cupboard today will have the stupid CPI report for May… I still don’t know why the markets get all keyed up over this stupid report with all its hedonic adjustments… But they do, and so I have to follow it, even though I abhor the data print… I already told you yesterday that I believe the fix is in on this report, so that the Fed Heads can pause rate hikes and point to the weaker CPI… “hello? is the head of accounting around to talk on the phone? Just tell him Jerome is on the horn for him… Hello? Yes, now here’s the plan for the Fed Heads this week, we don’t intend to hike rates again, but we need inflation to show a weakening so we can point to it, got it? “yes sir, I’m here at your requests”…
And that’s how I see it went down… of course you all know that I made that phone call up…
To recap… The dollar traders have taken a leave for a couple of days ahead of the FOMC meeting tomorrow… But Gold couldn’t take advantage of the dollar floundering… The Bank of Canada hiked their internal interest rate to 4.75%, and Chuck gives them a Gold star! And Oil traders are ignoring Saudi Arabia’s claim that they will cut production to levels during the plandemic.. I don’t think all that is going to work out nicely for the Oil traders, but its their bed, and now they have to sleep in it…
For What It’s Worth… Well, I gave you teaser above about what’s in the FWIW today, and so, we will visit Bloomberg.com to find this article on the Oil traders, and it can be found here: Oil Traders Are Daring to Defy Market Kingpin Saudi Arabia – Bloomberg
Or, here’s your snippet: “Oil traders are starting to ignore the most important person in the market. It could prove a risky gambit.
A week ago, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman pledged to unilaterally cut the country’s July oil production to the lowest in over a decade, excluding Covid-19 era curtailments. He described the move as a “lollipop.”
Deep Cuts | Saudi Arabia is set to cut output to about 9 million barrels a day in July
While there’ve been bigger output cuts in recent months, its symbolism was important, and Prince Abdulaziz left open the possibility of extending the curb. It also came on the back of a litany of comments that suggest the prince wants to hurt those who speculate on lower prices.
Yet, traders are becoming less responsive. The immediate price gain from the curbs he announced on last Sunday lasted a day. By Friday at 5 p.m. in London, Brent futures were around $76 a barrel — almost exactly where they were a week earlier. A previous output cut in April took less than a month to wear off on prices.
Speaking on Sunday, the prince said the OPEC+ agreement was about being proactive and precautionary. “I think the physical market is telling us something and the futures market is telling us something else,” he said at the Arab, China Business Conference in Riyadh. “To understand OPEC+ today, it’s all about being proactive, preemptive and precautionary.”
Chuck again… ok Oil traders, you’ve been warned to back off… proceed at your own risk…
Before we head to the Big Finish this morning, I wanted to make note of the fact that yesterday was the day, that 4 years ago, our St. Louis Blues won their first Stanley Cup Championship, and then we had the victory parade that over 500,000 people attended… And partied… into the night… I recall sitting at home watching Game 7, and my youngest son, Alex, called me on the phone, and said, “Dad, are we going to be able to hold on”, I told him that, “There were only 2 minutes left, and the Blues had a 3 goal lead, I doubted they would blow it.” And they didn’t!
Market Price 6/13/2023: American Style: A$ .6777, kiwi .6142, C$ .7488, euro 1.0798, sterling 1.2570, Swiss $1.1035, European Style: rand 18.6523, krone 10.7729, SEK 10.7806, forint 343.68, zloty 4.1467, koruna 22.0613, RUB 83.82, yen 139.58, sing 1.3404, HKD 7.8337, INR 82.37, China 7.1508, peso 17.29, BRL 4.8648, BBDXY 1,232.25, Dollar Index 103.33, Oil $68.40, 10-year 3.73%, Silver $24.19, Platinum $992.00, Palladium $1,376.00, Copper $3.79, and Gold… $1,965.52
That’s it for today… Man do I look bad right now… The antibiotic I was taking to clear up an infection, caused my face to turn red with bumps that itch like crazy… I’m glad I take the last one this morning… Then I’ll have to see how long ti takes to get my skin back to normal… The good thing is that I don’t go anywhere in the next week… So, I won’t see anyone that would probably look at me and laugh… The other good thing is that there is Benedryll. Well, this next weekend will be Father’s Day… I hope to see all my kids that day. I’m quite aware that they have their lives to live too, so no pressure from me… I mentioned my dad above today, I had the greatest respect for my dad… he could fix anything, he was strong as as ox, and could be tender as a teddy bear… I really got to know him, during his days of receiving radiation at a hospital in the city, as I would leave work, drive to his house in the county, wheel him out to his lift van, drive him to the Hospital, then take him home, and then hop in my car and return to work… We had some very good conversations in that van… Redbone takes us to the finish line today with his song: Come and Get Your Love…. I hope you have a Ton Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler