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.
[Read more...]Dollar Gets Sold On Bad Data Prints
July 6, 2010 By Leave a Comment
The currencies traded yesterday, but in very tight ranges, as the US was on holiday. This morning, the bias is to sell dollars, much like it was on Friday before the liquidity of Europe went to the pubs… Let's go back now, and revisit Friday's action…
Well… There was more proof on Friday that the double dip is coming…
[Read more...]Chinese Manufacturing Slows
July 1, 2010 By Leave a Comment
We closed the books on the second quarter yesterday. One that probably will end up showing some real rot on the US economy's vine. Yes, I do believe that rot is going to be exposed as we move along in July. So… We have that going for us!
The news from China, overnight, was not exceptionally good, and the fear mongers came out of the woodwork again, which wasn't a good thing for Aussie dollars (AUD)… In fact, all of the commodity currencies got whacked and sent to their rooms without TV! So, here's the news from China…
[Read more...]Some Good Alternatives to US Dollars on Bad US Data Prints
June 25, 2010 By Leave a Comment
Today the G-20 meeting starts in Toronto. I hear they have “locked down the streets,� sure glad they don't hold one of those boondoggles in my neck of the woods!
I think today we'll have some “cautionary tradingâ€? ahead of the meeting, as traders just don't know what to expect, other than the billing going into the meeting of an “austerity versus spendingâ€? fight between the US and Germany… Right now, that “cautionary tradingâ€? has a bias to buy dollars, and yen (JPY)…
[Read more...]Brazil Hikes Rates Again
June 11, 2010 By Leave a Comment
What a rally in the risk assets yesterday! And for once, when the rally fizzled out yesterday afternoon, profits weren't taken in the overnight markets… Instead we saw a consolidation, if you will, of the price gains on Thursday in the overnight markets. That's nice to see, eh? For it had been the pattern of recent times to just sell off any gains, and end up back on square one, or even lower than the starting level. So, like I said, this was very nice to see… I checked the levels last night before I went to bed, and noticed that there had not been any sell off, and thought, what a great Friday it would be tomorrow, if these can hold throughout the night… And they did!
[Read more...]A Euro Short Squeeze
May 21, 2010 By Leave a Comment
I got home last night, and looked at the currencies, and was in shock at the run the euro (EUR) had yesterday while I was gone… The euro climbed all the way to 1.2673! But before you start to kick yourself for selling into the weakness this week, as many people did, the euro has given back 1.50 cents to 1.2525… The thought was that the single unit had gone too far too fast.
[Read more...]Traders Fear Chinese ‘Bubbles’
March 11, 2010 By Leave a Comment
The big story on the screens this morning comes to us from China where inflation has reached a 16 month high. These dramatic headlines have sent currency investors heading back to the Japanese yen and US$ as many of these stories suggest the Chinese will be stepping in to slow the Chinese economy. But if you look beyond the ‘16 month high’ headlines, you will find that consumer prices rose just 2.7% in February from a year earlier, and increase yes, but hardly the stuff of a ‘bubble economy’. Premier Wen Jiabo has stated a goal of keeping inflation around 3%, so the inflation number is still below his goal. And the Chinese have already started pulling liquidity out of the Chinese banking system with increases in the reserve requirements and internal interest rates.
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Moody’s Downgrades Portugal
Moody's announced overnight that they were downgrading Portugal's debt rating by two 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!
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