As I turn on the currency screens this morning, I see that the euro (EUR) â€“ which remained well bid on Friday, thus losing that trading pattern we talked about, of overnight rallies for the euro and daytime sell offs â€“ has backed off Fridayâ€™s high… The German IFO Business Confidence was responsible for the euroâ€™s strong bid on Friday… Last night, the euro backed off a bit… The single unit actually traded above 1.36 on Friday afternoon, when the volume was thinning. This morning, the single unit is below 1.36 at 1.3575, as I type…[Read more...]
The dollar is rallying again today, and quite frankly, right now, the institutional momentum is so strong, that thereâ€™s nothing that would stop this rally…today that is. Itâ€™s a Jobs Jamboree Friday, the first of 12 for 2011, and as I said yesterday, I believe that the US will post the best monthly number for job creation in a couple of years today. I truly donâ€™t believe that itâ€™s something that can be maintained, given the fact that weâ€™re talking about December, when shops bump up their employment to deal with the Christmas shopping season. But, it will be the Big Kahuna today, job creation that is, and for that, we need to analyze what this will do to the currencies, right?
Well… The rally for the euro (EUR) didnâ€™t have strong legs yesterday. Seems that a strong Factory Orders number here in the US got everyone thinking once again that the all-clear horn has been sounded for the US… The dollar rallied, commodities sold off, and gold lost $34 (as I left for the day). Iâ€™ll just say this about the all-clear horn being sounded… If things were so rosy, would the Fed/Cartel/Bernank, be leaving interest rates near zero? Why would the same crew be carrying out their implementation of quantitative easing?[Read more...]
Well… Itâ€™s a â€œrisk offâ€� day that began yesterday afternoon… The only strange part of this risk off trading is the fact that the euro (EUR) is rallying versus the dollar! I know, I know, that seems to be a very strange occurrence… But itâ€™s true, itâ€™s true, I did see a euro rally! Other than euros, and sterling (GBP), the rest of the currencies have taken on water versus the dollar since yesterday afternoon, and that includes gold and silver, which have sold off too.[Read more...]
Well… As I expected, the euro (EUR) really ran up on Fridayâ€™s trading, as shorts were covered and trading books were squared for year-end. I truly believe that this euro-buying could be reversed as we go through the first month of 2011… The reason I say that is I truly believe that the euro will come under pressure, as the Eurozone gets probed to come up with better solutions to their periphery countriesâ€™ problems. I expect Germany to balk at many things, and when they balk, the runners get to move up…the runners being the dollar, and gold…[Read more...]
We had more of the same bias to buy dollars yesterday, with gold falling further, along with silver. The currencies held their ground pretty good, but the bias to buy dollars was there for us to deal with… Iâ€™ve been here for a while now, and Iâ€™m not seeing any movement either way in the currencies, and gold is up $3… The euro (EUR) still has the goings on with the debt-crisis facility negotiations, causing the single unit some pain. And when the euro has pain, the rest of the currencies fight to gain ground versus the dollar.
A chill came over the currencies and metals yesterday, which was about right, when you take into consideration the trading patterns of the past month… Two days risk on; two days risk off, and so on… This time though, the risk off that began yesterday mid-morning, looked to me to be a fundamental move… What? Fundamentals driving currency movements? What, has the world gone crazy? Well… It certainly looked that way… And it all began with the printing of US retail sales…[Read more...]
Well, the pause for the cause by US Treasury yields, lasted but one North American trading session on Friday… The 10-year yield has jumped higher once again this morning, all the way to 3.35%!!! WOW! Once again, I wonder aloud if the Treasury Bubble that Iâ€™ve cried wolf about for three years, is coming to fruition, or… Is this just another head fake, that will be corrected once the FOMC begins to really pull the trigger on their quantitative easing…[Read more...]
Well… Iâ€™ve spent a lot of time this week talking about the rise in Treasury yields… Apparently the rise in yields wasnâ€™t confined to Treasuries, as municipal bonds are getting whacked too… I saw that my friend and former colleague, David Galland, had this to say about the problems with the municipal bonds…[Read more...]