Opening Day in St. Louis!

Good day. And a happy “Opening Day in St. Louis” to one and all! Yes, the first Major League ballgame at the brand spanking new Busch Stadium. I’ll be there, thanks to a good friend who arm wrestled some big shots to get me a ticket!

So, Friday’s Jobs Jamboree was, as usual, mind-boggling. Jobs created for the month of March were 211,000, which was 21,000 over the forecast. But, it was below the previous month’s revised down figure of 225,000 – up 20, down 20. There doesn’t seem to be any strong trend there to me. But wait! The “Unemployment Rate,” which we all know to be about as accurate as a spring weathercast, ticked down to 4.7%. The other components of the Jamboree, which I prefer to focus on, were at expectations. Average hourly earnings year-on-year came in at +3.4%, and the average weekly hours remained at 33.8.

I know all those numbers start to get really mind numbing, but we only have to deal with them once a month!

After the Jobs Jamboree, the euro began to rally, but then it turned on a dime and went south – stopping at the 1.21 figure. Australian and Canadian versions of dollars didn’t get caught up in the greenback/euro game; they kept the heat on. Canada really got a boost when it was announced that it had posted another month of very solid job gains with employment growing by 50,500 – more than double expectations. The unemployment rate continued to edge lower, hitting a new 32-year low!

This increase in jobs will rekindle the rate-hike talk in Canada, as the Bank of Canada doesn’t want to have to deal with wage inflation on top of the rising prices of oil and commodities.

Speaking of rising commodity prices, here’s an example: Copper hit another record price for the fourth consecutive day, while Zinc pushed to an all-time high, and nickel rose to prices it hadn’t seen in 17 years! Demand from China is really putting a strain on supplies, which reminds me that all those that keep saying China is falling on their face (economy wise) are having to eat some crow right now. If China is demanding all these base metals, it means they’re not slowing down!

This is the third spring in a row that we’ve heard the Chicken Littles screaming about the sky falling in China. One of these years, they’ll be right, and they will pound their chests, walking around like 20-game winners! They won’t tell you about all the times in the past that they were wrong.

While I’m talking about China, the renminbi rose 0.08 versus the dollar last night. It won’t be long now, and the renminbi will be trading below the eight figure, which I think the Chinese will show off to the United States in hopes the pressure on them to allow their currency to outright float.

OK. I did leave everyone out there on a limb on Friday, when I told you that Lehman Brothers were telling their customers to buy currencies of countries that have surpluses. I then failed to tell you which countries fell into that category! My bad! OK, here’s the roll call – and by all means this is just a list of the countries we deal in. Of all the Asian countries, Thailand just recently went negative, so I’ll let them stay in the club for now. We also have Norway, Sweden, Switzerland, Denmark, the Eurozone, and Canada… There you go!

Iceland is in the news overnight, as their central bank governor said in an interview last night that he will push interest rates to record highs to put a lid on prices. He states, “Our models show to keep inflation at bay, we would have to go very much higher, even up to 16%.” His talk didn’t do much to stem the weakness of the krona.

The data cupboard is empty today, so we’ll have to see what the rhetoric is all about as the New York traders arrive at their desks. In fact, the cupboard remains empty until Wednesday when we see the color of February’s trade deficit, and March’s monthly budget statement. There you go. The twin deficits are front and center on Wednesday. The data releases start coming in fast and furious as we head to the end of the week.

Silver is really cooking with gas these days. It’s even moving higher without gold! Hi-o silver, away!

I’m out of stuff to talk about today. Shorter than usual, I know, but when you’re on empty, you’re on empty!

Currencies today: A$ .7290, kiwi .6090, C$ .8720, euro 1.2115, sterling 1.7465, Swiss .7690, ISK 73.40, rand 6.1350, krone 6.49, forint 220.33, zloty 3.28, koruna 23.6250, yen 118.26, baht 38.10, sing 1.6050, China 8.0064, pesos 11.13, dollar index 89.63, silver $12.42, and gold $596.05

That’s it for today. It’s finally getting warmer here, which is about time, in my opinion! Should be a great Opening Day today… Things should heat up later in the week data wise, so stay tuned… Same bat time… Same bat channel! Have a great Monday and week!

Chuck Butler
April 10, 2006

The Daily Reckoning