Good Day… And a Marvelous Monday to you! It’s going to be “one of those weeks” And we start if off with a Ho-Hum Day today.. I can tell, given the lack of data to start the week, but then two Yellen speeches to lawmakers, and a plethora of data arrives on the back end, starting Wednesday, and then we have a 3-day holiday weekend coming up, so the markets will get thin on Friday, and on top of all that, the BIG HAPPENING this week… pitchers and catchers report tomorrow, with full squads reporting on Friday! YAHOO! It’s almost here folks… the start of baseball, and with that bring spring… Those of you on the east coast getting hit by snow repeatedly these past few days, are hoping spring come real soon! The Beatles greet me this morning with their song: A Day In The Life… From the Sgt. Pepper’s Lonely Heart Club Band album…
We start today with a slight bias to sell dollars, and when I say slight, I mean it! It appears that traders are more than happy to just sit on trades. I read a report this past weekend from a research team that talked about how all the arrows point to the U.S. and how the dollar should be being bought, but there appears to be no conviction by traders to do so at this point, as they want to be shown the goods first.. Of course, the goods would be the rate hikes, and the rising inflation, and strong economy, which don’t exist at this point.. You know, I had thought that it was a given that the Fed would hike rates in March, but there’s only a 20% odds on a rate hike in March in the fed funds futures, right now.. Hmmm…
Last week we had a noted dove Fed member, Evans, speaking and even he said that while his forecast for this year was just 2 rate hikes, not the 3 that Janet Yellen is touting, he is now leaning toward 3 hikes.. That would mean that March would most definitely need to on the rate hike agenda, due to the schedule of Fed meetings this year. If they want to do 3 rate hikes, they’re going to have to get on the horse now!
OK, enough of that! Here is a list of things that could move the currencies one way or the other this week.. Janet Yellen will do her back-to-back, speeches on the state of the economy this week on Capitol Hill.. The Riksbank of Sweden meets this week, and things sure have turned around for the krona in recent weeks, and one has to wonder if this suddenly found strength in the krona will alter the Riksbank’s moves? In the Eurozone we get the 2nd cut of 4th QTR GDP, there should be no change in the first print of 0.4% growth VS the previous quarter. And that will keep the euro stuck in the mud of 1.0640.. The U.K. has a full data cupboard that will yield; January CPI, Retail Sales and December Labor Market data..
U.S. President, Trump, met with Japanese PM Abe this past weekend down in my neck of the woods, in fact, they played golf right down the street from me! I told you last week that currency manipulation was not on the agenda, and apparently the two leaders stuck to the agenda.. Canada’s Trudeau, comes to visit today, but again, I don’t think that Trump is ready to talk about any changes to NAFTA just yet, so I don’t see anything coming from this meeting either..
Speaking of Canada, Ed Steer highlighted an article on Bloomberg that talks about how Canada could lose it Triple Eh rating.. (AAA) But using the Canadian , eh, made it funny, right? Anyway, the ratings agency, Fitch, is waring Canada that any changes in the trade with the U.S. could result in them losing their triple eh rating.. That would be as devastating to Canada as not winning the Gold Medal in ice hockey!
North Korea tested another missile this past weekend.. But the Asian markets seemed just shrug it off, and go about their business overnight. Hmmmm.. have they grown complacent, and soft on the Korean missile tests? Now that’s something that could lead to real problems. And I can’t believe that Gold didn’t start the day today with a strong bid, but instead it’s being offered and has lost $5.50 so far in the early morning trading today..
Speaking of Gold, the shiny metal closed at 1,232.90 on Friday, after rising $5.10 on the day, but like I just said, it has given back $5.50 this morning. Friday saw 221,000 contracts traded,.. That’s HUGE folks, and once again shows just how much trading goes on with Gold… And maybe Gold can comeback today, but if it doesn’t, it has once again given buyers an opportunity to buy at cheaper levels today than Friday!
I told you earlier that the Riksbank of Sweden is meeting this week and that recent strength of the krona could throw a spanner in the works for the Riksbank.. I read that futures have removed the rate cut that remains a part of the Riksbank forward guidance. No movement in this way by the Riksbank could very well spell more krona strength. And that would be a real dilemma for the Riksbank, given they want inflation, but the stronger krona is preventing that from happening, but a country has to show some currency strength to attract foreign investment.
Here in the U.S. we have snow battering the East Coast up north, but in the Midwest it was 70 degrees this weekend, February! That’s crazy! On top of that we have no data today to look to for direction, and we won’t see much in data until Wednesday, when January Retail Sales will print.. The BHI (Butler Household Index) is indicating that it will be just OK.. not hot, not cold, and not just right! We’ll also see two of my faves, Industrial Production and Capacity Utilization, so I won’t be writing tomorrow, or Wednesday, but come back on Thursday with results! HAHAHAHAHA! As if!
Under the category of “things that we don’t have to worry about” NOT! I read on Friday, that on Sept 30, 2008, the 6 largest derivative banks held $179.1 Trillion in derivatives (remember how we all thought that this was going to blow up the economy, but that was avoided? By using every trick in the book? ) And on September 30, 2016 those same 6 largest derivative banks held $211.7 Trillion in derivatives! Instead of reining these, what Warren Buffett calls, “weapons of mass destruction”, in.. we’ve added to them by a large margin! But don’t worry about them, they didn’t cause chaos in 2008, why would they cause chaos now? Oh, that’s right the Fed doesn’t have any arrows left in its monetary policy quiver, what’s an investor to think? Well, I know what I think about all of this, and that’s why I buy Gold & Silver whenever I have extra funds to do so! But just because I look at these derivatives like this, doesn’t mean you should too.. Use your own thoughts to help you decide whether this is scary or not!
To recap… There’s a slight bias to sell dollars this morning, and Chuck truly means Slight! Not a lot of data or events to speak of early in the week, with most things going on from Wednesday on, and then we end the week with thin markets ahead of the 3-day Holiday weekend.. The Riksbank is the only central bank meeting this week. Trump and Abe played golf down the street from Chuck and didn’t discuss trade or currencies.. Trudeau comes to visit today, but with not enough time to work on NAFTA, I don’t see this meeting as much to do either. U.S. data takes over on Wednesday, and Janet Yellen will speak twice this week to lawmakers starting on Tuesday.
For What It’s Worth… I found this on Ed Steer’s letter from Saturday, and thought.. This is a bit light-hearted, and I wanted to start the week that way.. So, it’s about how obituaries are getting quite wordy and telling the truth about people. I found it to be humorous, and here’s the link to read the article: http://www.sfgate.com/neighborhood/bayarea/news/article/Texas-man-s-hilarious-obit-hails-him-as-10923450.php
Or, here’s your snippet… “RIP ELENE: Texas woman’s obit lists cause of death as ’2016 presidential campaign’
“Leslie’s hobbies included being abusive to his family, expediting trips to heaven for the beloved family pets and fishing, which he was less skilled with than the previously mentioned,” the obituary read. “Leslie’s life served no other obvious purpose, he did not contribute to society or serve his community and he possessed no redeeming qualities besides quick whited [sic] sarcasm which was amusing during his sober days.”
The closing line of the obit cuts rather deep:
“With Leslie’s passing he will be missed only for what he never did; being a loving husband, father and good friend. No services will be held, there will be no prayers for eternal peace and no apologizes to the family he tortured. Leslie’s remains will be cremated and kept in the barn until “Ray”, the family donkey’s wood shavings run out. Leslie’s passing proves that evil does in fact die and hopefully marks a time of healing and safety for all.”
Chuck again.. Yes, this is a backup FWIW.. But I liked it, so it’s “worthy”! HA
Currencies today 2/13/17.. American Style: A$ .7670, kiwi .7194, C$ .7632, euro 1.0640, sterling 1.2512, Swiss $1.0026, .. European Style: rand 13.3113, krone 8.3750, SEK 8.9080, forint 287.86, zloty 4.05, koruna 25.3973, RUB 58.21, yen 113.80, sing 1.4213, HKD 7.7588, INR 66.98, China 6.8777, peso 20.35, BRL 3.1127, Dollar Index 100.79, Oil $53.39, 10yr 2.43%, Silver $17.93, Platinum $1,008.32, Palladium $778.69, Gold 1,230.40, and SGE Gold.. $1,234.81
That’s it for today.. I have two birthdays to talk about today.. one a sad remembrance and the other a happy occasion! Which on first? Hmmm.. OK, today would have been my oldest sister, Brenda’s birthday.. We lost her at age 38 to ovarian cancer, she taught me so much about growing up and I still miss her all the time.. And today is the birthday of my good friend, Duane Moody! Duane turns 60 today! He always says that he’s amazed that he’s lived to now, given his propensity to get hurt doing stuff as a young man.. Well, you made it buddy! Now go out and celebrate your birthday! We watched the full moon rise up over the ocean this weekend, what a beautiful sight to watch… It was the Snow Moon.. and there was a partial eclipse on Friday night, and if you have telescope you would have also been able to see a comet! Alice in Chains takes us to the finish line today with their song: No Excuses.. I have most of their songs from the old MTV Unplugged shows, where electric bands would do their songs with acoustic instruments. I really liked that series, but just like everything else, all good things come to an end.. I hope you have a Marvelous Monday and Be Good To Yourself!
EverBank Global Markets
Creator / Editor of: A Pfennig For Your Thoughts
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