A Done Deal?

* German IFO is weaker.
* Chinese make strides in gaining a wider distribution.
* What’s going on with Platinum?.
* More weak data for the U.S. economy.

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

Good day. And a Wonderful Wednesday to you! Well, I almost just said forget about today, this morning. I’ve been having difficulty sleeping at night, at times, and last night was one of those times. But, I dragged myself out of bed, got ready and came into the office. I have my dad to thank for that soldiering on mantra I live with. Well, I also have my dad to thank for the bulldog attitude I played ball, and wrestled with in my younger days. Graham Nash greets me this morning with a song that many of you won’t know: Military Madness. In an upstairs room in Blackpool, by the light of the northern sea, the army had my father, and my mother was having me. Great stuff Graham!

I promise this will be short-n-sweet today. And as far as yesterday’s Pfennig is concerned. I apologize for its tardiness, as we experienced technical difficulties with our list server. Ahhh, the gains we’ve made in technology, eh? HA!

Well, the dollar is still kicking butt and taking names later, even with the awful Durable Goods Orders print yesterday. (more on that later) The euro, which used to be the currency that led the currencies higher VS the dollar, has now turned around and is leading them down the slippery slope. Not all of them, but you get the picture. The euro has not been able to find terra firma since hitting 1.14 early Monday morning. You would think this wouldn’t be the case given that the “talk on the street” is that a deal is done with regards to an agreement on the Greek Drama. But it is what it is. I guess, the markets will let the U.S. go Ollie, Ollie, Oxen Free, when they kick the can down the road, but not the Eurozone. Hmmm, they are similar in size regarding their economy, and the Eurozone has the potential to add member countries, so their economy’s size going forward is only going to get larger.

Traders decided to throw fundamentals into the picture today, out of the blue, I might add, and mark down the euro for the weaker than expected Business Climate, which includes; Current Assessment, and Expectations components, and is measured by the think tank IFO. The IFO print showed weakness in all three components with the Climate at 107.4 VS 108.5 prior, Current 113.1 VS 114.3 prior, and Expectations 102 VS 103. Now I say that trades decided to throw fundamentals into the picture today, because they are using this IFO weakness to mark down the euro, but failed to mark UP the euro when the IFO was moving higher these last 9 months. Reminds me of young teenagers, with their “selective hearing”.

On a sidebar. There’s an article on the Bloomberg this morning that caught my eye. And it’s Marine Le Pen, the frontrunner in France’s 2017 Presidential Election who said, ” A Greek exit from the euro is inevitable, and if it’s up to her, France won’t be far behind.” Oh boy, I can’t wait for this person to be in the news all the time. UGH!

The price of Oil is back to $61 this morning, which has been about the top of the pricing range for the bubbling crude, black Gold, Texas Tea. the petrol currencies are taking notice, and attempting to carve out gains VS the dollar this morning, nothing large to speak of, but gains nonetheless. the thing we have to remember here is that the Oil’s price has been stuck in this range of $58 to $62 for some time now, and when it falls back, so too do the petrol currencies. I wouldn’t get too lathered up on this, not until we see a break above $62.

The Chinese renminbi / yuan was weakened again last night, I would think it had mostly to do with dollar’s strong push yesterday against the other currencies and Gold. I had a question in the Pfennig Replies Box yesterday about was there a difference in trading between the renminbi and yuan? No there isn’t, as the renminbi is the official name of the currency of China, and the yuan is the slang name. Think: Dollar / Buck. I’ve always said that the media uses “yuan” because it’s easier to spell and pronounce! HA!

Speaking of China. I told you last week about a meeting that would take place between leaders of China and the U.S. and that they would have a full agenda to talk about, but have very little to agree on. That meeting is going on now. The IMF decided to throw a spanner in the works of the meeting by saying that, “a promotion of renminbi to Special Drawing Rights (SDR’s) may happen in 2015.”

On a sidebar with China. According to SWIFT, the people that secure and make all the foreign wire transfers in the world, the renminbi became the second most used currency in trade finance, and the fifth most popular payment currency. So, it does appear that China’s goal of achieving a wider distribution of their currency is gaining traction, folks.

The U.S. Data Cupboard was quite interesting yesterday, with May Durable Goods printing much worse than expected -1.8%, and April’s -0.5% was revised downward to -1.5%! Now, there was a 29% drop in aircraft orders, which sort of skewed May’s negative print, but that’s really just the unwinding of the 5.1% increase in March that reflected a large aircraft orders number. So, I would take any excuse that the media or Gov’t makes for this negative 1.5% with a small grain of salt.

And the Capital Goods Orders for May were only 0.4%, and were expected at 0.5%, but the real meat here was the revision from April’s 1% gain to a negative -0.3%!!!! How do you go from 1% to negative 0.3% in a revision? Well, I’ll tell you how. These things happen when you’re trying to pump up the numbers artificially, but when the receipts are all added up, you have to put your tail between your legs and admit your original number was just a bunch of B.S. !

And Gold is down again this morning, and Silver has dropped below $16 again. Wouldn’t you know it, Of course that’s all I can say about that, but if you can read between the lines. You’ll might feel my frustration! I did see some new research material from Gold researcher, extraordinaire, Koos Jansen, the other day, showing that China continues to accumulate large sums of physical Gold. You longtime readers know that I believe China wants to back a portion of their currency, when they decide to float it, with Gold. And this is where I’m going to share a quote with you from George Gilder who said, “Countries that tie their money to gold will always tend to outperform those who submit it to the currency bazaar.”

To recap. The dollar continues to kick butt and take names later this morning, but it’s a strange rally for the green/peachback, as the petrol currencies are in rally mode, while the euro is not able to take advantage of the thought on the street that “a deal is done” regarding Greece.. The U.S. Data Cupboard was awful for Durable Goods and Capital Goods, but did anyone notice? And Gold continues to struggle, and now Silver has joined in, much to Chuck’s chagrin.

Before I head to the Big Finish today. Did you hear about what Google is coming out with today? The “unsend email function”. WOW! So, how many jobs over the years would be saved by this function? How many lovers would still be together if this was around? I would like to think that I would be more of a celebrated person of importance at EverBank if this was around previously! HAHAHAHAHA!

For What It’s Worth. A couple of weeks ago, I said that I just didn’t get what was going on in Platinum and Palladium. New cars are flying out of the showrooms according to the Sales data for new cars, of which every one of them has a Catalytic converter. But it’s not just car sales that I question. I told you a month or so that Platinum was in a deficit as far as production and demand was concerned. Now, when since the beginning of time didn’t a deficit in production with strong demand not bring about a rally in price? Well, here’s today’s article from mineweb.com and you can read it here: http://www.mineweb.com/news/platinum-group-metals/2015-platinum-supplies-to-remain-in-a-deficit-cpm/

“Global platinum supplies will remain in a deficit for the second straight year in 2015 despite rising mine production as demand for automobile manufacturing and jewelry is set to rise, CPM Group said on Tuesday.

In its “Platinum Group Metals Yearbook 2015?, CPM Group forecast a global 2015 platinum deficit of 215,000 troy ounces compared with a deficit of 981,000 ounces in 2014.

Platinum fabrication demand, which involves using the precious metal in automobiles, jewelry and electronics, was forecast to reach 7.18 million troy ounces this year, up 2.2 percent from 2014 but below the 7.22 million ounces of 2013.”

Chuck again. I just shake my head in disgust with the way these things get manipulated. But one day, Alice!

Currencies today 6/24/15. American Style: A$ .7740, kiwi .6875, C$ .8125, euro 1.1215, sterling 1.5755, Swiss $1.0735, . European Style: rand 12.1310, krone 7.8180, SEK 8.2145, forint 277.20, zloty 3.7170, koruna 24.2640, RUB 54.27, yen 123.90, sing 1.3435, HKD 7.7525, INR 63.59, China 6.1142, pesos 15.37, BRL 3.0725, Dollar Index 95.11, Oil $61.10, 10-year 3.39%, Silver $15.89, Platinum $1,069.60, Palladium $703.00, and Gold. $1,177.01

That’s it for today. I had a nice lunch/ get together with some of the guys I played football with in High School yesterday. It was good to see Ray, Stanley, Mark and Greg. I was decided that we needed to make an effort to find more guys from that time and get them to go to lunch with us! Cardinals came back to win last night. YAY! I like comebacks, but I really love it when you get ahead early and stay ahead! Spirit is playing their song: Nature’s Way on the iPod. I’ve told you before, but for the new readers, this song reminds me of my situation 8 years ago. It’s Nature’s Way of telling you something’s wrong. That was me. So the song gets to me. Whew, glad that’s over! Good to see Michelle Kosinski back on TV this morning. Mike Meyer and I used to watch her on the one TV we had in the old office, she was always being sent to locations where hurricanes and stuff were to report from. Looks like she has a White House gig now. Good for her! Well, here we are, I need to get out of your hair for today. I did keep my promise that the letter would be short-n-sweet today. So with that, I hope you have a Wonderful Wednesday!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts