* Currencies rally then give back gains!
* Tight ranges ahead of 3-day weekend
* Very little data, makes for boring price action!
* Inflation is rising, what are you going to do about it?

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And now. Today’s A Pfennig For Your Thoughts.

Good Day. And a Happy Friday to one and all! And a Happy Birthday to Mike Meyer! Mike was a young single man when he first came to us looking for a job. That was many a year ago now, and Mike has proved to be a great asset to EverBank World Markets, along with being what I consider a good friend. It’s also the birthday of one of my fave people, Suzi Q.. Sue Grabowski.. I miss seeing you in the office, early in the morning, making pancakes! And “tag” you’re older than me! HA! The Alan Parsons Project greets me this morning with their song: Time.. Now that’s a good soft morning song!

Well, it’s a Friday before a 3-day Holiday Weekend! Payday was already this week, and that’s the thing that could have made this a real Fantastico Friday! But knowing that Monday is a Holiday, is good with me! Full squads report to Spring Training today too, so baseball has that going for it! The reason I make a big deal out of the 3-day weekend, is that the markets will begin to shut down today around noon on the East Coast, and leading up to noon, the markets will already be thinned out, which give the opportunity for the “young guns” to make trades, and sometimes they can get all caught up in a move that they panic, and the next thing you know, an asset has run wild in price. But those times are rare, what we normally see is a boring day, price movement wise..

And that’s already taking place in the European session. In the Asian session, we saw the dollar fight back, and regain some lost ground, it has surrendered during the day yesterday.. Yesterday, afternoon, I was doing some reading and research, and checking the prices, and I smiled like the Cheshire Cat when I saw the euro up to 1.0670, the A$ up to .7690, and so on.. But in Asia, like I said, the dollar regained that lost ground, and this morning, the euro is trading at 1.0640, and the A$ .7670.. So, the moves haven’t been huger, and now that the books were handed over to the European trading desks, there hasn’t been any movement. Apparently the Europeans are satisfied with the current levels, which tells me that the rest of the day today is going to be BORING price movement wise..

There’s not much in the way of data today here in the U.S. or around the world. In the U.K., January Retail Sales will print, and the forecast is for a strong number around 0.8%.. And like in the U.S. where a major part of the increase in Retail Sales came from higher prices, the same is expected for the U.K. As we’ve also seen inflation rising here too. In Sweden this morning, they will print their January CPI (consumer inflation) report, which should show inflation rising 1.5% year on year. Earlier this week I made a big deal out of the Riksbank meeting that was to take place and then I completely forgot to follow up on what happened at the meeting! UGH! What a dolt I am sometimes, eh?

The Riksbank meeting ended up being somewhat different than I thought it would be. I thought the Riksbank would see that inflation was rising, and that they would begin to talk about removing accommodation for their monetary policy, but Noooooooo! The Riksbank sounded all dovish instead, and that caused slippage in the krona. Maybe the Riksbank was confused with Valentine’s Day, being all lovey, dovey.. HA! But there you go.. another example of a Central Bank not seeing the forest for the trees.. I’m just saying..

The U.S. Treasury 10-year’s yield dropped from 2.48% to 2.42% yesterday.. Curious, and more curious am.. Janet Yellen, and Fed members Harker and Rosengren, all said in speeches this week that a March rate hike is not out of the question, and the odds of a rate hike in March went from 20% to 40%, but. we see the yield on the 10-year Treasury drop 6 Basis Points? Doesn’t that make you want to look under a hood to see what the heck is going on here? Well, the problem is that you can’t look under the “right hood” until next week, when the Fed’s Balance Sheet prints, and you could see if their holdings rose this week, and that would tell you that the Fed was buying Treasuries through the back door.. I can tell you that last week when we saw the 10-year’s yield fall to 2.38%, that the Fed had added $2.333 Billion in Treasuries.. Now, I must also point out that VS last year, the Fed’s Balance Sheet is down $34,581 Billion..

I was reading a letter from friend, Jeff Opdyke, who writes for the Sovereign Society, like I used to too, and in his latest letter, it’s titled; Don’t Fear The Euro.. Of course, me with song lyrics rattling around in my brain at all times, my brain immediately when to the Blue Oyster Cult song, Don’t Fear The Reaper.. and then that made me think of the Will Farrell skit on SNL, More Cowbell.. The next thing I knew, I was laughing out loud, my wife thought I had lost it, and it was all due to Jeff’s title of the article for his letter!

I think that Jeff did a good job of pointing out how many Chicken Littles (my term) are jumping on the obvious problems of the Eurozone, but not addressing the good things going on, or the problems with a country leaving, etc.

Well, Singapore received some good data last night, the result didn’t meet expectations, but it did maintain the positive momentum that Singapore’s economy appears to have gained.. the NODX (non-Oil domestic exports) great at 8.6% year on year in January. This markets two consecutive months of strong performance here, which should tell the Sing Gov’t. that they should be more optimistic on their Trade Outlook.. And I think they will, as I have always been impressed with the Sing. Gov’t, Central Bank, and Monetary Authority (MAS) of Singapore, which is why, even though the Sing dollar (S$) is so closely related to the Chinese renminbi, that I like S$’s.. For those of you new to class, Singapore does something that I wish all countries would adopt.. They use the strength of the S$ to combat inflation, or if inflation falls they allow the S$ to weaken. It trades within a band that can be widened or narrowed by the MAS, and therefore there aren’t these silly, willy, interest rate talks, and subsequent hikes or cuts.. Oh! And the S$ rallied a little bit on the data print..

Well. Back in the U.S. inflation is suddenly upon us.. I had a dear reader send me a note about inflation, telling me that he has gone to the same store for years, and bought the same size box of shredded wheat cereal, and that last week he noticed that the price for the item had gone up 40-cents! WOW! It’s hereeeeeeeeee.. And before you know it the Fed will be chasing it down the street.. Inflation tends to come on like this, strong, and then takes off, and before a central bank can react, they end up behind the inflation 8-ball.. So. what do you do when inflation comes calling? Do you lock the door and run for the basement? Or do you become proactive and deal with it the best you know how? Yes, I’ll take the second option!

The U.S. Data Cupboard has the Leading Indicators for January printing today.. . this is a forward looking piece of data, one of the few that we see, but doesn’t it make you laugh a bit, when the report is called Leading Indicators but it’s reporting results from last month? An oxy-moron, jumbo shrimp, rap music kind of funny to me! And it really doesn’t get much attention paid to it, so it’s almost like we have another no data day! And that will help keep the currencies and metals in tight ranges today.

Well, Gold made it three consecutive days with gains yesterday, closing at $1,238.60, up $5.40 on the day, and the shiny metal is up another $5 in the early morning trading today. I’m going to tie this all up in a nice neat bow for you. Inflation is rising, and so is the price of Gold.. I’m just saying.. Did you hear the news that Kyrgyzstan wants every citizen to have 100 grams of Gold? That’s the way I heard about it from the GATA folks, and can be found on the Bloomberg site.. and if you don’t believe me, check it out here!: https://www.bloomberg.com/politics/articles/2017-02-15/currency-pioneers-build-nation-of-gold-bugs-on-ex-soviet-fringes

Pretty cool, eh? Can’t hurt the price of Gold as long as investors are buying physical Gold! And that Central Bank Gov. said, “Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings. I’ll try to turn the dream into reality faster.”

To recap.. Well the currencies had a good day yesterday, but they gave back their gains in the Asian session. The European session has seen things remain steady Eddie, with tight ranges, and Chuck tells us that with this being a 3-day Holiday Weekend, that chances are pretty good that those tight ranges will carry through the rest of today. The U.S. and Sweden get some data today, but that’s about it.. Singapore got some good data last night, and Chuck goes all gushy on Singapore.. And more signs that inflation is rising and we had better be prepared for it!

For What It’s Worth.. I got this from MarketWatch, who every now and then have a good article for us. (they allocate most of their talent on stocks), and I liked this one.. it’s about Consumer Debt here in the U.S. and can be found here: http://www.marketwatch.com/story/us-household-debts-climbed-in-2016-by-most-in-decade-2017-02-16

Or, here’s your snippet: “The total amount of debt held by American households climbed in 2016 by the most in a decade, driven by broad and steady increases in credit card debt, auto and student loans, and a fourth-quarter surge to the highest amount of mortgage originations since before the financial crisis.

Total household debt climbed by $226 billion in the final three months of 2016, according to a report Thursday from the Federal Reserve Bank of New York. Total household debts are now just $99 billion shy of the all-time peak of $12.7 trillion set in the third quarter of 2008 just as the banking system began crashing down. The New York Fed estimates that debt is highly likely to set a new record in 2017.

“Debt held by Americans is approaching its previous peak, yet its composition today is vastly different as the growth in balances has been driven by non-housing debt,” said Wilbert van der Klaauw, an economist at the New York Fed.”

Chuck again.. the web page this story is on, has a graph of the different household debts.. Student Loans, Credit Card, Auto Loan, and other.. You should see the size of the Auto Loan debt category! OMG! But then I’ve warned you about car loans for a couple of years now..

Currencies today 2/17/17. American Style: 7670, kiwi .7192, C$ .7648, euro 1.0640, sterling 1.2415, Swiss $ .9991 . European Style: rand 13.09, krone 8.3263, SEK 8.8817, forint 289, zloty 4.0628, koruna 25.3635, RUB 57.30, yen 112.83, sing 1.4162, HKD 7.7643, INR 67.05, China 6.8585, peso 20.45, BRL 3.0667, Dollar Index 100.69, Oil $53.23, 10-year 2.42%, Silver $18.05, Platinum $1,016.23, Palladium $792.86, and Gold $1,242.80, and SGE Gold. $,1245.07

That’s it for today.. Full squads report today, and next week on the 25th the first Spring Training game will take place. I’m ready! Tomorrow is National Wine Drinking Day.. for all you who love wine.. The sunrise this morning is absolutely beautiful. Orange on the water.. My stomach didn’t care too much for the dinner I had last night. UGH! I’m paying for it this morning, but hey, that’s not going to stop me from trying to make this a Fantastico Friday! Happy Birthday again to Mike and Suzi Q.. I hear that the spring training facility over at Roger Dean Stadium is a madhouse that so many people are back there to watch.. UGH! I remember when I was with just a handful of people on the back fields to watch the drills. Oh well, things change, and sometimes not for the better! The Righteous Brothers take us to the finish line today with their song: Unchained Melody.. This song is all the late Bobby Hatfield doing all the singing, without the deep beautiful voice of Bill Medley on this song.. And with that, it’s time to get off this bus today, and send you on your way to a Fantastico Friday! Be Good To Yourself!

Chuck Butler
Managing Director
EverBank Global Markets
Creator / Editor of: A Pfennig For Your Thoughts
1-800-926-4922
http://www.everbank.com