Good day. The dollar maintained its stronger tone yesterday, in spite of durable goods data, which came in slightly lower than predicted. Durable goods orders for February increased 2.2% versus last month’s revised 3.6% drop, and the ex-transportation number was up 1.6% versus a revised drop of 3% last month. Neither of these numbers met economist’s expectations, but the revision of last month’s numbers apparently offset this month’s failure to live up to expectations. MBA mortgage applications were down 2.7%, better than last month’s drop of 7.4%.
[Read more...]Housing Data Show an Uncertain Recovery Here in the US
March 26, 2012 By Leave a Comment
Good day. What a weekend here in St. Louis. I spent a majority of it outside, and we even ate dinner last night out on our deck, something that is not normal during the month of March. I enjoyed the scent of my wife’s lilac bushes as I was sitting outside last night, reading up on the currency markets. The research pointed to poor housing data Friday morning as the reason for the drop in the US dollar on Friday.
[Read more...]Seeking to Explain the Market’s Dour Mood
March 6, 2012 By Leave a Comment
Well, well… it’s a “risk-off” day in the markets. Let’s look at some quick numbers:
- All the major U.S. stock indexes are down at least 1%. According to Bespoke Investment Group, the last time the S&P opened down this much was Nov. 21
- Gold is down another 2%, to $1,671. Silver’s back below $33
China Lowers GDP Target
March 5, 2012 By Leave a Comment
Late last week, traders, investors, hedge jockeys and the rest all switched horses in the middle of the stream — by bailing out of the risk assets of currencies and metals that they had bought — and pushed the prices higher earlier in the week. Gold got slammed big-time, so I guess there’s no reason to fear the uncertainty in the world today. Israel and Iran are saber rattling, countries all over the world are shifting out of their long-standing agreements to price oil trade in dollars, China continues to take baby steps toward removing the dollar as the reserve currency in the world and the beat goes on. So I guess there’s nothing to fear about the uncertainty in the world today. Alfred E. Neuman, where are you?
[Read more...]The New Dynamic in Global Oil Demand
February 28, 2012 By Leave a Comment
The average American is paying 13 cents a gallon more for gasoline than he did a week ago. Gasbuddy.com says the national average price for regular unleaded is $3.67.
A barrel of oil goes for $108.33 this morning — up nearly $12 in February alone.
There is, of course, a “fear premium” caused by the prospect of a new war… and an “inflation premium” caused by the Federal Reserve’s monetary promiscuity…
[Read more...]Euphoria Over Greek Debt Deal Fades
February 27, 2012 By Leave a Comment
Friday’s price action was interesting in that the euro (EUR) held onto the 1.34 handle, but gold was down $7. Hmmm… One anti-dollar doing well, while the other one weakens… The other anti-dollar, so proclaimed by me last week, oil, saw continued interest in pushing the price higher. And with that higher price in oil, the emerging countries, and the Asian countries with their nascent recoveries, are all feeling squeamish about their growth prospect, given that elevated price in oil…
[Read more...]Is Oil the New Anti-Dollar?
February 24, 2012 By Leave a Comment
Good day… And a Happy Friday to one and all! Apparently, an email friend named Craig sent a letter to the Bank of Canada pointing out the perils of the bank’s low-interest bias, and guess what? He received a reply from the governor of the Bank of Canada, Mark Carney! WOW! So I guess Craig actually has friends in high places!
[Read more...]Yen Weakens to 80!
February 22, 2012 By Leave a Comment
Well, the crazy things that have been going on with Japanese yen (JPY) finally seem to be unwinding… For anyone new to class, the Japanese yen has been one of the best-performing currencies the past couple of years, and not for strong fundamentals… The economy has been in a funk for over two decades, interest rates have been zero for so long now — I don’t remember when they weren’t zero — an aging population and government debt up to their eyeballs, but still the yen rallied…
[Read more...]
The Rising Price of a Falling Dollar
Do you know why oil and prices are moving sharply higher? Some blame the oil companies, charging they are manipulating prices. Others cite US sanctions on Iran and the threat of a military encounter that would disrupt the flow of oil from the Middle East.
Speculators, too are blamed for ostensibly bidding up the price of oil. In the political arena, President Obama is taking credit for increased domestic oil production even as his critics point out the slow pace of drilling permits issued by his Administration soon will hamper additional increases in the US oil production.
[Read more...]