China Shows Signs Of Momentum Building.

* Chuck gets good news!.
* No central bank moves on Thursday..
* China’s GDP is in Gov’t range!
* Kuroda breaths sigh of relief .

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

Good Day. And a Happy Friday to one and all! Well, I’m busting at the seams this morning, with good news, so let’s get right to that first, and then we can talk about the currencies, metals, economics, and dolts all we want, but the important stuff first! I met with my oncologist yesterday evening, and she was smiling from ear to ear, so I knew something in the scans was good. It was not only good, it was great! I felt like Tony the Tiger there! HA! The recent scans I had showed that the mass in my mount on my right mandible has shrunk from 7.5 CM to 3.9 CM, and more importantly, the mass in my chest. Is GONE! Reduced to a tiny, barely seen lymph node on the CT scan! OMG! That’s right! I said it is GONE! Praise the Good Lord, folks, for he has seen to it that the medicine that is infused in me every two weeks, has done its job! Once again, all of you who have sent me notes telling me that you pray for me, you get to witness the power of prayer!

So, yesterday evening, I had a little spring in my step, and with our friends, Gus and Diane here to celebrate with us, I grand time was had by all! And then this morning I turn on the currency screens to see that the currencies are rejoicing in my great news too! HA! Bob Marley greets me this morning with his song: One Love/ People Get Ready. I caught myself swaying in the chair to the music!

There was a lot that went on yesterday and in the overnight markets, so let’s get to work here. First, China printed their 1st QTR GDP, and it was right smack dab in the middle of the Chinese Gov’t’s range (6.5 to 7%) at 6.7%, and on the outside that looks tepid right? I mean we I used to report +10% GDP numbers from China.. But some underlying measures, like Industrial Production that saw a better than expected result, indicate to me that there is momentum building in the Chinese economy, and that has set the trading parameters today, allowing the markets to forget about the bad news from Singapore yesterday.

So the risk sentiment is back on today, which means the dollars of Australia (A$) and N. Zealand / kiwi, are on the rally tracks, and dragging any other risk currencies like the Canadian dollar/ loonie, along for a ride. In fact, kiwi is the best performer overnight! I still marvel at the action here between the A$ and kiwi. Kiwi has outperformed the A$ this week, and that baffles me, as the Reserve Bank of New Zealand (RBNZ) cut rates at their last meeting, while the Reserve Bank of Australia (RBA) left rates unchanged.. But, I won’t fight city hall over this, it is what it is, right?

The price of Oil remains steady holding to its $41 handle.. That marks three consecutive days of holding $41. Oil Ministers are meeting in Doha this weekend, to discuss a production freeze, but like I’ve said before, I doubt that these guys could ever come to an honest agreement like that, given they all cheat on production numbers now! But, Bless them for trying, eh? I can see Russian President, Putin, tearing off the sleeves of this shirt, to show off his guns, and start pounding the podium telling the ministers that they had better agree to a freeze or else. Or else what, Chuck? Oh, come on.. I’ve sure done some imaginary role playing this week haven’t I? Well, that’s something that I think adds some thinking to what might be going on, so don’t think for one minute that I’m finished with that!

After the better than the average bear news from China overnight, the Peoples Bank of China (PBOC) decided to. wait for it.. Just a little longer. wait for it. Ok, they decided to depreciate the renminbi in the fixing. What, what? Things are looking up in China and they mark down the currency? Hey! The mark down was smallish, so I’ll just put this down as the Chinese, once again, are showing the markets that they can’t speculate with the currency thinking they know what the PBOC will do.

The Brazilian real continues to bask in the sun that is being supplied by the chance that president Dilma Rousseff will be impeached.. This weekend, the lower house in Brazil’s congress will vote. Recall that the Upper House vote to impeach her earlier this week. The lower house needs 2/3rds of the votes to impeach her. it will be a close call, as Rousseff still has supporters that will not vote to impeach her. I read yesterday that the Brazilian Central Bank (BCB) has intervened to the tune of $20 Billion worth in real this week, in an effort to keep the real from getting any stronger.. You know me, I’m not for this type of intervention in what the markets want to do. But, right now, it looks like it was $20 Billion wasted because the real continue to get stronger in spite of the intervention!

The price of Gold got whacked again yesterday down $14 on the day. UGH! Just when it looked like Gold was counting down for a moon shot, it sees two consecutive days of getting whacked good. I can hear the price manipulators right now, yucking it up and high fiving each other, telling each other “good job”, and asking, Who do they think they are taking Gold above $1,250? Like we were going to sit here on our hands and do nothing about that? Yeah, right, we showed them, we showed them good!

Well, they might want to calm down, and go find a place to hide, because now that Deutsche Bank has entered into a settlement agreement regarding the prices of Gold and Silver, it was revealed yesterday that in the agreement, Deutsche Bank has agreed to expose other institutions purportedly involved in manipulations. Uh-Oh, and according to the report on the Bloomberg, this witch hunt will begin immediately, as Deutsche Bank has agreed to turn over instant messages, and other communications between them and other parties. Stealing when I should have been buying, comes to my mind right now, the great song by Uriah Heep.

OK.. I’ll leave that for the investigators. The Central Bank Meetings in the Eurozone and U.K. yesterday didn’t see any changes, as I expected they wouldn’t, but we did see some verbiage from the Bank of England (BOE) regarding BREXIT. This was unusual to me, and to the markets, who chopped the pound off at the knees after hearing that a BREXIT discussion played a part in the no rate change decision. I laughed reading that, because, that’s just an excuse. The BOE was never going to hike rates at this meeting, the next meeting or any meeting in the near future! They didn’t need an excuse as to why they didn’t hike rates, everyone knows you can’t, and won’t hike rates any time soon!

I read this morning that Bank of Japan (BOJ) Gov. Kuroda was speaking and mentioned that he was not going to bring up FX moves or currency intervention at the G20 meeting that’s taking place in Washington. Kuroda should know, he’s the person in charge of those items! I also read somewhere else that Kuroda is breathing a sigh of relief this morning as the yen has backed off its all-out assault on the dollar.. yen’s y-t-d gain VS the dollar now stands at a little more than 10%… Still quite a bit stronger than Kuroda or Japanese PM Abe would like to see yen though. The BOJ will next meet on April 28. I would think that the usual thoughts about more stimulus for the Japanese economy would begin to build the closer we get to that date. I personally don’t see any additional stimulus having an effect on the Japanese economy. And maybe, just maybe, PM Abe is beginning to see it that way.

Hey! He could have pinned his colors on the mast of someone else! He doesn’t have to agree with me, but then so far everyone else he as agreed with, has gotten him deeper in the hole. I might as well take the helm, I certainly wouldn’t/ couldn’t do worse than what has been done here! HA!

But that would interfere with me being a rock star! HAHAHAHAHAHA! After that discussion the other day, when I told you I was very close to becoming a rock star but instead I write a financial newsletter, I had a dear reader send me an email, saying. But, Chuck, YOU ARE A ROCK STAR! I can’t tell you how much of a big kick I got out of seeing that!

The euro is flat today, after the ECB left things unchanged yesterday. The euro doesn’t seem to fit in with the “risk sentiment currencies” so they can rally and not have the Big Dog, euro, go along with them. Seems strange, but that’s the way love is! Instead, the trading pattern these days is for the euro to rise on safe haven flights, and dollar weakness.

And in India, the Reserve Bank of India (RBI – still the coolest abbreviated Central Bank name) announced that India had booked a narrower Trade Deficit in Feb than a year earlier, and Industrial production in March rose 2%, which was much better than expected! But the rupee seems to be stuck in the mud right now.

I told you yesterday that the U.S. Data Cupboard only had the stupid CPI and the weekly jobless claims, so there was really nothing here to see, except for all those that still believe that CPI is something to hang your inflation gauge hat on.. OK. So, yesterday, I went on a tirade about the Fed Governors and their districts saying that overall prices were increasing. I pointed out that March Retail Sales were negative, so no price pressures there, and that the Wholesale inflation (PPI) had slipped in March. Well, along came the stupid CPI yesterday, and while prices when up 0.1% on a monthly basis, below expectations I might add, it fell year on year -0.9%… But overall, the Fed districts saw prices increasing. There you go! They say it happened, so it happened, especially in the eyes of the dollar bugs, who kept the pressure on the currencies yesterday.

Today’s Data Cupboard has two of my fave “real economic prints” Industrial Production (IP) and Capacity Utilization (CAPU) These two have been illustrating a different story about the U.S economy than the one the Fed Gov.’s keep illustrating. And I don’t believe that the March prints for these two will be any different. Look for a negative IP and a drop in the CAPU percentage. We’ll also see the U. of Michigan Sentiment report for the first two weeks of April, and the Total TIC Flows, which have been pushed to the back of the closet by the markets.

I looked out at next week’s data, and it will be a slow week for data, so who knows where that’s going to go take us. But that’s next week, only today is promised to us.

Today, April 15, should be tax day.. But for some reason, unbeknownst to me, it was moved to April 18th. Do you have your taxes finished? Already filed? Or looking for an extension?

To recap. The dollar held its gains yesterday, but overnight the data from China has the risk sentiment back on, which is good for the A$ and kiwi, and the loonie somewhat. Kiwi is the best performer overnight, and has outperformed the A$ this week. The Oil ministers meet this weekend in Doha to discuss a production freeze. yeah, fat chance of that coming to fruition! And the lower house in Brazil will vote on Sunday whether to impeach the president or not. So, a few things going on this weekend for us to keep an eye on. Either that, or check back on Monday and it will be in the Pfennig!

For What It’s Worth. Well this story is all over the news so I doubt none of you have not heard about it, but I thought it was still FWIW worthy. So, here’s the link to the entire story about the 5 Biggest Banks in the U.S. : http://www.nytimes.com/2016/04/14/business/dealbook/living-wills-of-5-banks-fail-to-pass-muster.html?emc=edit_th_20160414&nl=todaysheadlines&nlid=58270588&_r=1

Or, here’s your snippet: “The nation’s top bank regulators have added an unexpected voice to the growing chorus of critics worried that the biggest American banks, nearly eight years after the financial crisis, are still too big to fail.

The Federal Reserve and the Federal Deposit Insurance Corporation said on Wednesday that five of the nation’s 8 largest banks – including JPMorgan Chase and Bank of America – did not have “credible” plans for how they would wind themselves down in a crisis without sowing panic.

That suggests that if there were another crisis today, the government would need to prop up the largest banks if it wanted to avoid financial chaos.”

Chuck again. I find this timing of this news to be quite interesting given we are in the middle of the election year here in the U.S. And has to give Bernie Sanders a huge lift, given he has called for the biggest banks to be broken up. (I’m not a Bernie Sanders supporter, I was just pointing out his stance that plays well in the sandbox with this news)

Currencies today 4/15/16. American Style: A$ .7720, kiwi .6915, C$ .7780, euro 1.1285, sterling 1.4190, Swiss $1.0338, . European Style: rand 14.5235, krone 8.2390, SEK 8.1415, forint 275.22, zloty 3.8035, koruna 23.9480, RUB 66.31, yen 108.85, sing 1.3580, HKD 7.7562, INR 66.64, China 6.4908, peso 17.41, BRL 3.4810, Dollar Index 94.75, Oil $41.05, 10-year 1.77%, Silver $16.19, Platinum $985.80, Palladium $553.35, and Gold.. $1,230.83

That’s it for today. So, good news for me yesterday, and that all those days I felt like death warmed over were worth it! My beloved Cardinals got back on the winning note yesterday with a strong 7-0 win.. Have you seen the start that the Cubs have had? WOW! They say that good pitching beats good hitting, hopefully they see some good pitching soon, before they run away with the division! Our Blues will be back in action tonight, a little earlier too, I might add. Let’s Go Blues! I see our former football team the Rams traded to get the Number 1 pick in the draft that’s coming up in a couple of weeks.. I wonder who they’ll waste that draft pick with. Not that I care any longer! The NBA playoffs begin tonight, their season seems to go on as long as the hockey season, with all their rounds of playoffs.. OK, Jimmy Buffett takes us the finish line today with his song that should probably be a Friday staple. Come Monday. I spent 4 lonely days in a brown L.A. haze, and I just want you back by my side. Ahhh.. great lyrics! All righty then, time to get off this bus today, and send you on your way to a Fantastico Friday. and Be Good To Yourself!

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