The currency/risk on rally was quite strong yesterday, all day long! However, in the overnight markets, we’ve seen some profit taking, and reassessing of what they were doing, like pushing the euro to above 1.30. I say that because there’s still no agreement with Greece and the private creditors… I keep hearing and reading analysts, talking about how the Greece problem is unsolvable… OK… maybe it is… but if that’s true, then what about Illinois? Or California?
[Read more...]China’s Manufacturing Index Rebounds
January 3, 2012 By Leave a Comment
Good day… And a Tom Terrific Tuesday to you, and… HAPPY NEW YEAR! Here’s hoping that 2012 brings us a correction to the 1 in 5 Americans out of work, and that it is a healthy, prosperous, and peaceful year! Hey… Stranger things have happened, right? But, we have some HUGE hurdles to clear this year, folks… So, keep your fingers crossed!
[Read more...]Euro Rallies on Positive IFO Index and a Successful Spanish Debt Auction
December 20, 2011 By Leave a Comment
The euro (EUR) sure enjoyed a better night rebounding from close to its annual low versus the US dollar. A surprisingly upbeat IFO business climate index combined with a pledge of more funds for the bailout and a positive Spanish auction to send the common currency higher. The IFO Institute’s index, based on a survey of 7,000 German business executives, rose to a three-month high of 107.2 from 106.6 in November. Economists had expected the index to drop to 106. November’s number had surprised on the upside also, so this month’s value certainly seems to confirm a trend that indicates Germany’s economy may be able to push through the credit crisis to remain on a solid growth path.
[Read more...]Weekly Jobs Data is Positive, Pushing the Dollar Lower
December 16, 2011 By Leave a Comment
As mentioned in yesterday’s Pfennig, we had a long list of data released yesterday, and most of the numbers indicated that the US economy may be picking up a bit of steam. Producer prices came in right where they were expected, increasing 0.3% MOM and 5.7% YOY. The ‘core’ figure, (ex food and energy) is the one the Feds monitor and both showed modest increases over last month. The biggest surprise came in the form of the Empire Manufacturing number which came in at 9.53 on December versus 3.00 last month. This number reflects manufacturing activity in the NY region, but has a history of being very volatile and therefore an unreliable indicator of future manufacturing growth.
[Read more...]Brazil Quietly Scraps its Tax on Foreign Investment
December 7, 2011 By Leave a Comment
Today is our country’s first day of infamy… Pearl Harbor Day… I hope to visit Pearl Harbor some day, and pay my respects to those American soldiers and sailors who were attacked when we weren’t even at war with the Japanese… A day for us all to stop and think about what happened that day.
[Read more...]Central Banks Pump Dollar Liquidity into the Markets
November 30, 2011 By Leave a Comment
The dollar continued on its decline through most of the trading day yesterday, but fell off a cliff in very early European trading. A coordinated central bank action to lower swap rates was the reason for the dramatic moves in the currencies this morning. The FED, ECB, BOJ, SNB, BOC, and BOE all agreed to cut the cost of providing dollar funding via swap arrangements. They also agreed to make other currencies available as needed, but the primary function of these swap arrangements was to push more dollar liquidity into the markets. Swap agreements give the banks US dollars today for euros or other currency payments at some future date. It effectively pumps fresh US dollars into the markets which will be pulled back out at some point in the future. The move was seen as necessary in order to prop up the European banks which have been hard hit by the euro financial crisis. The additional liquidity was welcomed by the markets, with the European stock markets and early US markets up nicely.
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Greece Disappoints Again!
Here we are… The last couple of days of January… So the first month of 2012 is just about over, and already, we’ve heard the Fed push their rate forecast for near zero rates out further, and the Fed laying the groundwork for another round of QE… But… When we began the month/year, everyone was pounding their chests, and talking about what a great year 2012 would be (economic-wise)… Talk about deflating the balloon in the first month of the year!
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