April 15, 2019
* Currencies rally on Friday, but give some back last night…
* Chuck uncovers a jobs report that tells the truth…
Good Day… And a Marvelous Monday to you! It’s also April 15th, Tax Day… and Pfennig Tradition says I need to sing this song by the Beatles… Let me tell you how it will be, There’s one for you, nineteen for me, ‘Cause I’m the taxman, yeah, I’m the taxman…
Man, do I dislike taxes… When I was a young man just starting out and didn’t have two nickels to rub together, I would say, “Give me the income, I’ll gladly pay the taxes”… And then when I began to earn the income, I would say, I hate taxes! At least now, that I no longer have any income stream, my tax burden has reduced tremendously… So, I’m back where I was in 1973! Man, did I see a fun game on Thursday last week! My beloved Cardinals finally broke out their bats, and scored 11 runs! Of course the Dodgers helped with some of those runs… Longtime fave, Billy Squier greets me this morning with his song: In The Dark…
Well, while I was gone on Friday, the currencies decided to get off the porch and chase the dollar down the street… The euro popped back over the 1.13 handle, the Aussie dollar (A$) closed in on 72-cents, and so on… There was good and bad news from the Eurozone on Friday… First, the February Industrial Production printed a negative -0.3%, but that was better than expected which was for a much deeper negative -0.6%… That was the bad news…. The good news was that Speculators were buying the euro in response to reports on Mitsubishi UFJ Financial Group’s planned purchase of the aviation financing business of Germany’s DZ Bank, dealers said. The transaction was announced on March 1 and MUFG said the it was expected to close after June.
Now, I’m sure some of you are scratching your heads and wondering why in the world would that news help the euro? Well, you see when these major merger deals take place across borders, the company in one country has to buy the currency of the other country to fulfill the terms of the transaction… So, based on the news that Mitsubishi is going to be buying the German Bank, they’ll have to be buying euros, and that got the buying in euros started…
However, before we, as non-dollar holders, rejoice, the overnight markets last night took the currencies to the woodshed… How, could, on Friday, the currencies rally so much, and in the overnight markets last night, they give it all back? Well, not all, but most… Did something happen this past weekend that would generate this kind of dollar buying? Well, no… So, I go to my back pocket and pull out my “expose the PPT card”… That’s all I’ll say about that!
OK… so, like I said, “not all the gains, but most of them” were given back last night… The euro is still above 1.13 this morning, but the pep and vigor that the currencies were trading with on Friday, just isn’t there this morning…
The price of Oil has slipped back below $64 in the past 24 hours so that means that the flyer the Petrol Currencies were trading on last week, as the price jumped higher, is no longer in play… UGH! Not that I want to see Oil prices soar, but a rise to $70 would do wonders for the Petrol Currencies…
Gold hasn’t been able to find a bid for a few days now… Last Thursday and Friday were both down days for the shiny metal, and today in the early trading Gold is down $3.80… I’m finding this downward direction of Gold to be very interesting… My longtime friend, Ed Steer of www.edsteergoldandsilver.com tells me that: “there was another monster decline in the Commercial net short position in that precious metal as well, as it fell by a whopping 42,637 COMEX contracts, or 4.26 million troy ounces of paper gold.”
So, one has to reason that if the short positions are declining, that Gold should be rallying, right? And if it isn’t, what else is there to move the price of Gold downward? And that my friends, is the $64 question. Could it be, oh, no it couldn’t, could it be? Oh, no, not that! The humanity! But, I guess it could be physical Gold owners selling… People do the strangest things, folks…
Last Monday, I spent the day talking about the Jobs report the previous Friday, that just didn’t make any sense to me… And now this whole charade is being exposed… There’s a report that called the JOLTS report, and it shows Job Openings… And it reflected that for the March there were 133,000 less new hires… And this report has now been down 3 of the last 4 months… Which leads me to believe that the surveys that are done are probably reflecting the proper numbers, but then the BLS adds their “magic”, and things get all out of whack.
Late last week, China printed some decent economic data that had everyone thinking that things in China aren’t so bad, and that got the Global Growth folks all lathered up… But remember just a week ago. the IMF downgraded their Global Growth forecast, to the lowest level it’s been since 2006-7… So, I’m not going to get tricked into thinking that Global Growth is going to rally… And I would think it to be prudent that you not think that too!
I just had a chuckle to myself when I was typing the word “prudent”, and thinking of Dana Carvey doing his SNL impression of President Bush back in the 80’s… “No, it wouldn’t be prudent, and we have all these points of light”… funny stuff!
OK… The Data Cupboard here in the U.S. last week had a late week surprise, when March PPI (wholesale inflation), which had been on a downward plane, surprised everyone with a 0.6% gain in March VS Feb which was just 0.1%, and the expectation for March of 0.3%… We also saw the Consumer Confidence Index fade a bit this month from 98.4 to 97.5… Still stronger than it should be, in my humble opinion!
This week’s Data Cupboard starts the week with the Empire State PMI (New York region manufacturing index) And tomorrow we’ll see two of my faves, Industrial Production and Capacity Utilization for March… I’m better a free undercoat right now that these both will be very weak…
To Recap… The currencies had a day in the sun last Friday, but in the overnight markets last night they have given back most of their gains from Friday. Chuck has no explanation for this move last night, expect to pull out his “expose the PPT card”… Gold can’t find a bid and this is getting very weird… And Chuck points out that the JOLTS report tells us a different story than the BLS tries to pull over our eyes each month…
For What It’s Worth… OK, going a different direction this morning and give you something that the GATA folks sent me… And it’s about all the stuff the Central Banks are pulling and getting away with and since it’s the GATA letter I can’t share with you the link to it… But, I do have a snippet!
Or, here’s your snippet: “Central banks get away with the flaming hypocrisy illustrated below because mainstream news organizations don’t dare to put a critical question to them.
Here, if David Lawder and Leika Kihara of Reuters were serious journalists, and their editor, Paul Simao, had the wit for his job, someone from Reuters would have asked the managing director of the International Monetary Fund, Christine Lagarde — in the name of the “accountability, transparency, and effective communication” she purported to be advocating — to identify the markets in which her member central banks are surreptitiously trading and when they are surreptitiously trading, and to explain the objectives of their surreptitious trading.
Instead Reuters makes itself a mere press-release service, like PR Newswire.
How easy it would be for any news organization to show central bankers up and shut them up. A single critical question would do it, but there isn’t one in all of Earthly journalism.”
Chuck Again… Yes, wasn’t it just complaining last week about the lack of real journalism? There’s a whole article on Reuters that is being referred to above, and you can find it here: https://www.reuters.com/article/us-imf-worldbank-lagarde/imf-chief-calls-for-central-bank-accountability-communication-idUSKCN1RP0KW?il=0
Currencies today 4/15/19 American Style: A$ .7177, kiwi .6763, C$ .7510, euro 1.1315, sterling 1.3112, Swiss $1.0028, European Style: rand 13.9570, krone 8.4913, SEK 9.2436, forint 283.18, zloty 3.7760, koruna 22.6458, RUB 64.31, yen 111.95, sing 1.3523, HKD 7.8389, INR 69.45, China 6.7035, peso 18.76, BRL 3.8805, Dollar Index 96.82, Oil $63.23, 10-year 2.56%, Silver $14.89, Platinum $886.81, Platinum $1,369.28, and Gold… $1,286.64
That’s it for today… A bit late, I know… Well, our Blues won Friday night, and then came home and lost in front of a raucous home crowd last night… They’re up 2-1 in the series, but, last night was very disappointing to say the least… My beloved Cardinals played in Mexico this last weekend and split their two-game series… Good thing they weren’t here, because it was downright cold here! I even saw snow falling in Columbia, Mo. yesterday morning! UGH! My little d… granddaughter Delaney Grace, received the news that she will sing the national anthem at the Independent ballpark across the river, and in St. Charles this summer! WOW! Well, I have some doctor appts this week, it’s been 4 months since I’ve seen a doctor here! YAHOO! But that all changes this week! OK, Steely Dan takes us to the finish line today with their song: Kid Charlemagne… Is there gas in the car?, yes there’s gas in the car.. I hope you have a Marvelous Monday, Tax Day… and are you will Be Good To Yourself!
Chuck Butler