Jobs Jamboree Friday!

Good day. And a Happy Friday to one and all! A Good Friday to boot, which means the U.S. stock market is closed today, the bond market will close at noon, and liquidity in the currencies will dry up after London closes and head to the pubs. Before we get there we have to see the color of the Jobs Jamboree for March.

All week long I’ve told you that I believe the Jobs Jamboree will be disappointing yet again, and I’m changing that thought going into the report this morning. Yesterday, currency traders began to smell something rotten in the Jobs Jamboree, (maybe they are Pfennig readers, eh?) and the dollar got sold. The euro was the main beneficiary of this, as traders and investors are coming around to believing what I’ve been saying about the European Union’s economic growth.

In fact, the euro hit a 2-year high yesterday! That followed Aussie dollar’s 10-year high and Singapore’s 9.5 year high booked the previous night. The U.S. dollar is really taking it on the chin these days from a host of currencies… Even the Canadian dollar / loonie is inching back to 87-cents. It wasn’t that long ago that it looked like the loonie would have a difficult time holding onto the 80-cent handle!

Speaking of Canada… The Canadian economy just keeps creating jobs with 54,900 jobs created in March, building on the blockbuster 88,900 gain in January and 14,200 in February. This is now the strongest quarterly increase in job growth since 2002.

Here’s the skinny for today… The Jobs Jamboree is the keymaster…the “experts” are forecasting a rise in jobs created during March of 133K. If the total number of jobs, real or ghost comes in above that 133K level, the dollar will receive some love… However, if job creation disappoints, like it has quite a few times recently, look for the dollar to get sold like funnel cakes at a State Fair.

The China bashing could go down a different path today, and it is rumored the U.S. is going to file a complaint at the World Trade Organization (WTO) next week over what they believe is China’s piracy of copyrighted movies and books. Throw tariffs at them last week on paper exports, and follow it up with complaints at the WTO… Not exactly from the book of how to win friends and influence enemies!

Did you see the shot taken at the U.S. by the IMF yesterday? Get this: The IMF warned that further “substantial” declines in the dollar are necessary to bring the Current Account Deficit to sustainable levels. Hmmm…true…but that’s not all that’s needed. The Gov. needs to stop spending so much… Now that would go a long way toward bringing the Current Account Deficit to “sustainable” levels. But, we know that’s not going to happen…so what’s left to help us achieve some correction in the Current Account Deficit? That’s right…the dollar!

With the Current Account Deficit running at a 6.5% of GDP clip, it’s an easy target…but what’s the IMF going to do about it? Ahhh…grasshopper. As Edwin Starr used to sing: Nothing… Absolutely nothing… Say it again!

I think the IMF statement did underpin Gold, as the geopolitical tensions in Iran subsided, along with the prices of oil and base metals… But Gold held its ground… So obviously the selling of dollars was responsible.

As I was signing off yesterday, the Bank of England’s Monetary Policy Committee announced they would keep rates unchanged this month. This caused some of the buying in pound sterling to be reversed, and sterling briefly slipped below 1.97… But that didn’t last long, because, as I said yesterday, the scenario I painted for you regarding the BOE, rates and sterling just gets shifted to May… This thought / scenario is being picked up by the markets now, which should help sterling continue its assault on the dollar next week.

Monday is Easter Monday, and most of Europe will be closed. But once again, we’re here! So, the liquidity will be squeezed a bit on Monday too! UGH! How do you work out this gig? You get off on Good Friday, and on Easter Monday…

Indian rupees just keep keeping on… It was just about 10 days ago that it finally moved below the 44 figure VS the dollar (remember this is a European priced currency, and as the number goes down your value VS the dollar goes up), and now it has moved below the 43 figure! Rupees were stuck in the mud for some time last year, but are really heating up now…

I’m going to head to the Big Finish early today, as I’ve run out of things to talk about! Unless you want to hear me get up on my soapbox regarding… Oh, never mind, you don’t want to hear me rant and rave on Good Friday!

Currencies today: A$ .8195, kiwi .7235, C$ .8690, euro 1.3425, sterling 1.9720, Swiss .8220, ISK 66.75, rand 7.1320, krone 6.0825, SEK 6.92, forint 183.45, zloty 2.8625, koruna 20.80, yen 118.50, baht 32.40, sing 1.5120, HKD 7.8170, INR 42.92, China 7.7230, pesos 10.99, dollar index 82.73, Silver $13.72, and Gold… $675.50

That’s it for today… I was lucky enough to get invited (Thanks Kevin!) to the Frozen Four, which is being held in St. Louis, last night. The Frozen Four is the NCAA’s hockey version of basketball’s Final Four… (Don’t you just love the name Frozen Four for hockey?) Great Stuff! I messed something up in my hip last week, and it just doesn’t want to heal or get better… Lots of Advil, is keeping me on my feet…

So, I’m looking forward to the weekend, and maybe some rest will do the trick! My little buddy’s first baseball game of the year was cancelled due to this stupid cold weather that has settled into St. Louis! It’s cold Willis! Have a great Friday and weekend… It will be Easter at my house on Sunday, too cold to have the little ones hunt for eggs outside, so the house will get a real noisy!

Chuck Butler — April 06, 2007

Chuck Butler is the senior vice president of EverBank World Markets. He oversees the trading desk and operations for over 12,000 individual and corporate clients, both in the United States and abroad, who look to EverBank for FDIC-insured World Currency Deposit Accounts, and Single-Currency and Index CDs .

Chuck is the author of The Daily Pfennig, which is reposted here at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications.