July 2010 - Daily Pfennig

A free, quick-reading daily e-letter on world currencies, economic trends, and the occasional baseball score.

Daily Pfennig

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  • Eurozone Confidence Rises...

    In This Issue..

    * Currencies rally
    * German unemployment drops...
    * RBNZ hikes rates 25 BPS...
    * CBO & the inconvenient debt...

    Good day... And a Tub Thumpin' Thursday to you! They figured it out! Finally! And in time I might add, given we hook our camper up to my vehicle on Sunday! In the end... The guy at the auto shop said, 'if we would have only listened to what you were telling us'... I said, 'yes, eventually, everyone realizes that!' HAHAHAHAHAHAHA!

    OK... Front and Center this morning, I have to tell you that we've had a HUGE currency rally overnight, and the rally still has legs through the European session, for, I've seen the euro inch higher as I booted up my computer! What's got the currencies, led by the Big Dog, euro, so wound up this morning? Ahhh grasshopper... Come, sit, and let me tell you the story of an ancient warrior, no wait, let me tell you about the rally!...
  • Consumer Confidence Tumbles...

    In This Issue..

    * Currencies range trade
    * Aussie CPI prints soft...
    * RBNZ to hike rates tonight...
    * Oil drop pushes loonies lower...

    Good day... And a Wonderful Wednesday to you! I'm writing from home again this morning, as I have to deal with my car again. They told me it was fixed, I drove it about 10 miles to find out it wasn't! UGH! I must have the guy that failed 'car repairs' 10 times before passing...

    OK... The currency action yesterday was, while range traded, up and down, and all around. Yesterday morning I told you that the euro had broken above 1.30, and I would check it to see how long it remained there... Well, this time it was more than 10 minutes, and the euro rose to 1.3040... But then the rug was pulled from under the single unit, and it was back below 1.30 it went... In fact, it fell to just above 1.29, before then turning around once again and heading higher, eventually ending the day at 1.30....
  • A Taxing Divorce?

    In This Issue..

    * New Home Sales ignite risk
    * Currencies rally...
    * Oil rises to $79, pushing loonies higher...
    * Deutsche Bank has minimal exposure to GIIPS...

    Good day... And a Terrific Tuesday to you! A very long day back in the saddle yesterday for your Pfennig writer. So, I'm dragging the line a bit today... Plus getting in and out of a regular car, for someone with my handicap is not something you'd want see or do! It's a pain! But... My car is in the shop... I certainly hope they get it fixed soon, as that's the vehicle we use to pull our camper to Table Rock Lake! And... We 'were' going to leave on Sunday!

    Well... Yesterday morning, I told you the currencies, for the most part, were flat... That didn't last too much longer... The U.S. printed, what the media and markets thought was a fabulous New Home Sales report, and the rally in risk assets was 'on'! With stocks and currencies in rally mode, Gold and Silver backed off... I'll talk about that trading theme we've seen lately in a minute, but first... Let's talk about the Housing data......
  • No More Stress Tests....

    In This Issue..

    * Stress Tests don't reveal much...
    * Risk Assets should rally...
    * RBNZ meets this week to raise rates...
    * Loonies rally on surge in Oil price...

    Good day... And a Marvelous Monday to you... Hopefully, your Monday is working out better than mine has so far... I'm writing from home, with all kinds of technical difficulties this morning. I had car problems and had to turn around and come home. Now, I've not been able to 'connect'... This is starting out about as bad as my trip home from Vancouver on Friday that turned into Saturday!

    Not that you read the letter to hear about my travel problems, but I had to stay the night in Dallas, and fly home Saturday... UGH! So, I'm still beat, and now I have this car problem to deal with as soon as I get this ready to go out!...
  • Judgment day has arrived for Euro banks…

    In This Issue..

    * Judgment day for European banks...
    * US data beats estimates, but is still bad...
    * South Africa leaves rates unchanged...
    * Fannie and Freddie still in limbo.

    Good day. And welcome to what hopefully will be a fabulous Friday for everyone. I know it will be a good one for me, as I am heading out the door as soon as I get this written. My son is playing in the Show Me Tournament this weekend which is Missouri's little league state championship. Should be a fun weekend of baseball, but a bit hot as temperatures are expected to stay right around the triple digits...
  • 'Unusually Uncertain' times…

    In This Issue..

    * 'Unusually Uncertain' times push the $ lower...
    * European data show further strength...
    * Goldman economists need a vacation...
    * China to unveil the 'secret sauce'???

    Good day. Another busy day here at EverBank yesterday, but today promises to be a bit of a break. All of our visitors left late yesterday afternoon, and the systems which I have been testing are down for the next few days. The weather also looks like it has finally calmed down a bit after Thunderstorms rolled through again yesterday afternoon. The markets probably won't calm down, as we have a plethora of data releases today along with further testimony from Bernanke and the release of the European stress tests....
  • Canada boosts rates….

    In This Issue..

    * Canada boosts rates...
    * BOE called out for quantitative easing...
    * Indian Rupee to shine...
    * China loosens grip on Hong Kong deposits...

    Good day. We had some pretty unsettled weather come through the area yesterday and last night, with the lightening and thunder producing quite a show. The currency markets, on the other hand, were quite stable. The biggest gainer was the Yen, and the largest loser the Euro; but neither moved more than .65% vs. the US$. Tight ranges across the board for the currency markets....
  • US housing starts suffer…

    In This Issue..

    * Housing starts suffer...
    * Stressful times in Europe...
    * Aussie dollar moves higher...
    * Canada to raise rates...

    The news which drove the markets yesterday was no big surprise for the desk. Homebuilder confidence here in the US dropped to the lowest level since April 2009 as the homebuyer credits expired. Today we will get additional data on the housing market which is expected to show US housing starts continue to fall while foreclosures climb. While prices steadied over the past couple of months there is still a backlog of homes facing foreclosure which will equate to a very slow recovery for the housing markets. And in the US, as the housing goes so does the economy; so the data is not a good sign for our nascent recovery....
  • The Euro stays on the move…

    In This Issue..

    * Euro stays on the move...
    * Soros calls for more stimulus spending...
    * Commodity currencies suffer...
    * Cards sweep the Dodgers...

    Good day... And welcome to another week. Chuck is on his way to Vancouver this morning to speak at the big Agora Finanacial Investment Symposium later this week; so I will have the honor of bringing you the Pfennig over the next few days. But fans of Chuck shouldn't get too upset, as he always sends me Pfennig Pfodder from the road. The euro has certainly been on the move lately, and Chuck left me the following before signing off last week:

    Well... Mid-morning last Friday, we saw the rug pulled from under the euro, after the single unit had recovered to 1.30. Yes, the euro traded at 1.30 on Friday morning, but that was before a Consumer Confidence report printed in the U.S. and showed a HUGE drop!...
  • Retail Sales Disappoint! – 7/15/10

    In This Issue..

    * China's GDP moderates...
    * Spain has successful bond auction...
    * Fed's FOMC minutes disappoint...
    * euro returns to 1.28!

    Good day... And a Tub Thumpin' Thursday to you! It's July the 15th, so the month is already half-over... Unbelievable! Day 80-something with the Oil leak... I know the Russian scientists' claims about the Gulf sea bed being damaged are pretty scary and unfounded at this point, but, when the plans to put a cap on the well get delayed, you have to wonder a bit, eh?

    OK... No need to spend a day on that! Hey! The currencies are in rally mode again this morning, after a strong, but not a as strong GDP report from China last night. Chinese 2nd QTR GDP printed at 10.3%, which is quite a drop from the 11.9% they printed in the 1st QTR of this year... But, I've got two things to say about this......
  • Risk Assets Rally!

    In This Issue..

    * Currencies have strong rally VS the dollar...
    * Gold returns to $1,210...
    * Rosengren talks deflation...
    * Aussie Confidence soars!

    Good day... And a Wonderful Wednesday to you! WOW! The National League won for the first time since the Wizard of OZ (Ozzie Smith) played in 1996! Being a National League guy, I grew up watching the National League win these games every year, but that changed and it's been an American League affair for some time. But not this year! YAHOO!

    Another Big WOW! Goes to the currencies and metals yesterday! What a rally! The currencies, led by the Big Dog euro, left the porch and chased the dollar dog down the street all day! The euro returned to the 1.27 handle, moving through the 1.26 handle like a hot knife goes through butter! By the time I made it into the office from the doctor's office yesterday morning, the damage to the dollar was a done deal... Last night, before I went to bed, I checked the currencies just to see if there had been profit taking in Asia... And what to my surprise did I see? But no profit taking, what glee!

    ...
  • Moodys Again...

    In This Issue..

    * Currencies are mixed VS dollar...
    * Canadian credit & economy on the mend!
    * China to print a very strong GDP number?
    * Gold is back above $1,200....

    Good day... And a Terrific Tuesday to you! I'm writing from home this morning, because I go back to the Ocularist this morning to have more work done on my new 'eye'... I didn't sleep worth a darn last night, and I think I just had this visit on my mind.

    Well.. Speaking of something on one's mind.. Or, more like a case of too much too little too late, Moodys announced overnight that they were downgrading Portugal's debt rating, 2 levels to A1... I don't want to get started on these ratings agencies again, they have become as useless as a pay toilet in a diarrhea ward! Ok... That probably wasn't too good to start off today's letter with a saying like that, but... It's what my fat fingers typed, so it stays!...
  • Central Banks Diversify...

    In This Issue..

    * Currencies soften VS the dollar...
    * Another look at Canadian job data...
    * China has Super month of exports!
    * Yen gets rocked by Upper House election...

    Good day... And a Marvelous Monday to you! Congratulations to Spain... The fiesta is on in Spain, as their football (soccer to us) team won the World Cup yesterday. Personally, I think Holland, got the bad end of the stick on two calls that would have turned that game their way. But, it was not to be, and Spain hoisted the cup!

    OK... Well, thanks to Chris for taking over the Pfennig on Friday. I was busy with other things for the day. I sent a note to Chris Friday morning about the Canadian Job report, and he replied that he had already written about it! WOW! Quick on the draw! He beat me to the punch... But, the report was so good it's worth talking about some more! Canadian employment skyrocketed again in June rising by 93,200, almost four times the amount expected by forecasters (+20,000). Add this to the 133,000 jobs created in April/May And you've got the ingredients for a strong quarter of job creation! The unemployment rate fell back to 7.9%, lower than forecasts for an 8.1% print.

    ...
  • Aussie Job Creation Soars Again!

    In This Issue..

    * Currencies rally on Wednesday...
    * And hold on to gains overnight!
    * Loonies outperform on the day...
    * More 'an inconvenient debt'...

    Good day... And a Tub Thumpin' Thursday to you! It sure has been a Tub Thumpin' Thursday so far, as the Asian and European markets are hopping, and in Australia, the jobs just keep coming! All that and more on this Tub Thumpin' Thursday, that, as our little Christine would tell me is 'my Friday'!

    OK... Front and Center this morning, yesterday I told you, well, let's just go to the archives and see what I told you word for word... Pfennig 7/7/10: 'Today, we'll see the latest labor report from Australia. In recent months, the jobs data has consistently surprised to the upside each month, so it's not like going out on a limb to say that I expect the job creation to be better than the +15,000 that's forecast.'...
  • Gold Falls Below $1,200...

    In This Issue..

    * A Risk Off day...
    * Currencies rally on Tuesday...
    * Chinese bank has strong IPO...
    * Kicking the can down the street...

    Good day... And a Wonderful Wednesday to you! It was a Terrific Tuesday for the currencies VS the dollar, it was not a Terrific Tuesday for Gold, and the Cardinals!

    Front and Center this morning, Gold is retreating again today and has fallen well below $1,200... Here's the skinny... Yesterday, it was announced that China's Agricultural Bank of China reported a very successful public offering, raising more than $22 Billion. Now, what does this have to do with a Gold sell off I hear you saying? Ahhh grasshopper... Come, sit, let's discuss...

    Basically, it's like this... If a Chinese Bank can pull off a very successful IPO without breaking a sweat, then the daggers can be put away on a global risks, and that could be seen in the performance of equities all across the board yesterday....

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