A Happy Friday!
"The U.S. Current Account Deficit came in much higher than forecast: $195 Billion, for the first quarter. That's nearly $800 Billion per year! That cannot go on!"
by Chuck Butler In This Issue… - No Budget Agreement…
- Current Account Deficit soars!
- Copper supplies fall
- No data to talk about…
--- Advertisement --- Need more World Market deposit slips? Simply give us a call at 800.926.4922, or, you can send an e-mail to worldmarkets@everbank.com. We'll be happy to send you more Bank-By-Mail envelopes by return mail. --------------------- And Now… Today's Pfennig! A Happy Friday! Good day. Well, I DID go home with a smile on my face Friday, because for once in a month of Sundays we had a nice rally throughout the day, with no major sell offs and profit taking. The euro scratched and clawed its way to nearly 1.23, and all was right on the night! I hope you enjoyed your Father's Day…I certainly did! Thanks to my beautiful bride and my lovely children for making the day special for me. The single unit (euro) has felt some pressure overnight though, as the European Summit ended without a Budget Agreement. Just another political dagger that's been thrown at the euro. But like I said on Friday, the good news is that it's now over, except for the shouting, and maybe we can begin to put that one hundred miles of desert between the euro and all this political mess. The U.S. Current Account Deficit came in much higher than forecast: $195 Billion, for the first quarter. That's nearly $800 Billion per year! That cannot go on! And hopefully from the markets' reaction on Friday, it won't, as the dollar was marked down big time vs. most currencies. Just totally unbelievable that the markets have allowed this to get this huge! The best performing currencies this morning are the Commodity Currencies, as Commodity prices continue to soar, thus putting the spot light on Aussie, kiwi and even loonies! I say "even loonies" not to be mean. It's just that the loonie has sat out the recent rallies by Aussie and kiwi. So, glad to have you back, loonie! Overnight the markets were hit with a story regarding Copper. It seems that copper stockpiles fell to their lowest level in over three decades…and supply and demand being what it is to prices, with China on the demand side, the price of copper has soared…and that underpins these three currencies… In the case of Aussie and kiwi, not only do they have a positive yield differential going their way, they also have strong Central Banks fighting inflation, add these to soaring commodity prices, and the love train is leaving the station. Last night, the Australian government revised their forecast that export earnings upward and said that they would increase 1.2% in the next year. Some more fuel for the love train… The Asian currencies still haven't taken off, which is very puzzling to me. I thought for sure that the markets would have grown tired of waiting for China, and begin marking up the floating Asian currencies. I think the fact that there continues to be these hot and heavy periods of rumors regarding a Chinese revaluation, has kept the markets from beginning the rebalancing process. But the boy has cried wolf one too many times regarding that Chinese revaluation, and I can't help but to believe the marking up of yen, and the other floating Asian currencies will begin shortly. There have been quite a few Fed Heads out talking about the continuation of Fed rate hikes. I think the markets had come around to my school of thought that the Fed would begin to slow down, and even stop by the end of summer, and I don't think the Fed Heads liked that one bit! The talking really began once the 10-year yield fell to 3.82% a couple of weeks ago, and continues as the Fed really doesn't want to deal with a low yields that won't help attract investment to finance the deficit gap… We all survived last week's economic data glut. But there's still one piece of data that's leftover from last week's market-moving list of releases, and that that's Leading Indicators, which will print today. Leading Indicators are expected to weaken from last month's awful showing of -.2%. And then, that's it for this week, except for some second tier releases. So, I'll have to come up with all kinds of new stuff to talk about! Currencies today: A$ .7790, kiwi .7190, C$ .8135, euro 1.2220, sterling 1.8265, Swiss .7910, rand 6.69, forint 203.34, zloty 3.335, koruna 24.58, yen 108.75, baht 41.08, sing 1.6710, pesos 10.83, and gold… $440.40 That's it for today. I know, a little shorter than usual. But I'm having a difficult time getting my motor started today, so I'll end this and try and sneak in a nap before everyone comes in. Too late, Chris just showed up early! UGH! As I said above, I hope your Father's Day was grand, and now it's onto the 4th of July weekend! Have a great Monday and week! |
