Currencies Are Stuck In The Mud

A Pfennig For Your Thoughts

April 23, 2019

* Easter Monday saw trading volume thin yesterday…
* Existing home sales sees a HUGE drop in March…

Good Day… and a Tom Terrific Tuesday to you! Man! I completely forgot to mention that yesterday was Earth Day! I hope everyone did something good for the Earth! I recall when I was a young lad, that the album rock stations, and their listeners, were the only people that celebrated Earth Day… I’m just saying… Another sunny, blue umbrella sky day here yesterday, but I spent most of the day watching episode after episode of the new Season 5 of Bosch… Styx greets me this morning with their song: Too Much Time On My Hands… Fits me perfectly, these days for sure!

Well, no real data, except housing data, and I’m not sure that qualifies as real data as it could very easily be manipulated each month, for the markets to go on, and so the currencies were stuck in the mud with only some marginal winners on the day… The price of Gold was up in the early trading, but then gave that back and then some as the day closed with Gold down $4 on the day… I guess the salami slicers aren’t finished yet…

The price of Oil hit a 6-month high yesterday at $65.70, and has continued to climb in price overnight… but the Petrol Currencies weren’t able to generate enough enthusiasm about their values and ended the day stuck in the mud with the rest of the currencies. Oil’s move is all tied to the story I told you about yesterday, regarding the U.S. dropping the Iranian Oil waivers, come May 2nd. If you’re a not-so-big country, and you are importing Oil from Iran, you’re going to be getting economic sanctions put on you by the U.S. come May 2nd… So, either they shut off the Iranian Oil imports, and the price of Oil goes higher because there’ll be less supply available, or… they continue as is, and the Global Growth Slowdown gets another member…

One of the reasons that the currencies didn’t move much yesterday is the fact that it was Easter Monday around the world, which means the Christian countries all had a holiday… We didn’t here in the U.S… and that’s all I’m going to say about that!

Circling back to the housing data yesterday, Existing Home Sales for March were down big at 5.21 Million VS 5.48 Million in Feg, and 5.31 Million expected… I read where the smaller more affordable houses didn’t see a major slowdown, but the big, swanky, McMansions did… Hmmm, that’s go to tell me something about this market, doesn’t it?
Today, we’ll see the New Home Sales for March, and again the expectation for this data is that it will come in weaker than the Feb number of 667,000…

Well… there I was thoroughly enjoying watching my beloved Cardinals turn up the heat on the Brew Crew last night, when I saw an email come through from longtime reader Bob… These are always good, so I read them when I can… This one was a report about the recent report by the Social Security Board of Trustees, who consist of: United States Secretary of the Treasury, Secretary of Labor, Secretary of Health and Human Services, etc. (certainly not Chuck Butler and his conspiracy theorists here!)

And this is an excerpt of what they had to say… “The Board of Trustees itself calculates Social Security’s long-term shortfall at a mind boggling $43+ TRILLION.

Simply put, the trust funds don’t have enough money to keep the programs going, at least under the current promises.
They admit right at the beginning of their report that, starting 2020, Social Security’s cost will exceed the money it earns in from interest and taxes. “
OK, is anyone else alarmed at this report? 2020, is not “years away”, it’s next year! If you would like to read the gory details of this report you can find it here: https://www.ssa.gov/oact/TR/2019/tr2019.pdf

Like I said yesterday… Oh brother can you spare a dime?

Manipulations, coercion, price rigging, flying by the seat of one’s pants, and other descriptions that I use to explain the price actions these days, are beginning to really get on my nerves… I can’t do anything about them, and that’s killing me! I write about them, in hopes that a lawmaker or two reads my thoughts and does something about all this, but I know that’s not going to happen, because, upsetting the applecart is not in the bloodlines of our lawmakers…

I’ve been doing some reading regarding the proposed additions to the Fed Reserve… There’s been two vacancies there for quite a few years now, and now the President has some people in mind to nominate, and already they are being casts as “no goes” by the media and lawmakers… I just don’t get it… These vacancies need to be filled… Let’s get it done, OK?

Sorry about that trip down a side road… Let’s get back to what’s up…
The British Parliament returns to work today, and soon they will go to work with PM May on a new BREXIT deal… Yesterday, the pound had fallen below 1.30, but today with the renewed hope of a new deal , the pound has pushed back above 1.30…

The Swiss franc sure has seen better days, as it lost the parity handle to the dollar last week, and has been slowly, inch by inch, crept lower as the week as gone on… I believe this is all tied to the fact that the euro just can’t find a bid these days… It’s not that the franc is tied to the euro any longer, that cross was broken years ago now, but it still trades like there is a relationship, which it should given that most of their trade is with the Eurozone…

Speaking of the Eurozone… in Germany, I’m waiting to see the results of the latest sentiment index from the think tank IFO that was scheduled for release this morning. Germany is the Eurozone’s largest economy, and therefore it’s all about Germany…

The Aussie dollar (A$) is slipping again, after touching 72-cents last week, it has slowly moved downward again… I have an interesting piece on Australia’s 28-year run without a recession in the FWIW section today, so I won’t spoil the soup here, and leave you with the thought that the A$, as I’ve said for years, is the proxy for Global Growth… And I’ve been talking about a Global Growth Slowdown for months now… I’m just saying…

The U.S. Data Cupboard has the aforementioned New Home Sales data today, and that’s it! Tomorrow, we get dialed up for more data that will be real economic data, so make sure you come back for that! HA!
To recap… The currencies are stuck in the mud again, and while a couple of currencies found some solace in the rising price of Oil, their moves are muted at best… Gold still can’t find a bid, and can’t hold onto any gains it generates… The Social Security Board of Trustees give a sobering report on the condition of Soc. Sec., and we only have data from New Home Sales today…

For What It’s Worth… Good friend, Dennis Miller, sent me this last week, and it took me a couple of days to read through it, with interruptions, holidays and what have you… But it’s an article about Australia’s lengthy growth period without a recession… And it can be found here: https://www.smh.com.au/business/the-economy/what-australia-s-economic-miracle-is-teaching-the-rest-of-the-world-20190408-p51bu4.html

Or, here’s your snippet: “I had flown 25,000 kilometers not to study economic malaise, but its opposite: the remarkable resilience of the Australian economy, which has gone nearly 28 years without a recession.

The government, with elections to take place next month, recently announced an expected surplus in the next budget year.

Surely this grand economic success story would hold lessons for the United States and the rest of the world, right?

Yet instead of giddy enthusiasm, what I found in Sydney was a pervasive sense of caution and wariness — and not just involving real estate, though housing does loom large in discussions about the economy. In conversations with Australian business people and college students, economists and government officials, I detected no sense of triumphalism.

An entire generation of young adults has grown up without experiencing a protracted downturn. But in Australia, as I came to learn, nobody really acts as if they’re the stars of an unprecedented three-decade success story. They’re aware that the good times could end. The mood is more practicality than pessimism.”

Chuck Again… Well, why don’t we try some of that practicality, and not so much sunshine, lollipops, and rainbows all the time here in the U.S. ?

Currencies today 4/23/19 American Style: A$.7112, kiwi .6660, C$.7478, euro 1.1250, sterling 1.3007, Swiss $.9807, European Style: rand 14.1894, krone 8.5175, SEK 9.3340, forint 285.24, zloty 3.8105, koruna 22.8734, RUB 63.82, yen 111.90, sing 1.3570, HKD 7.8438, INR 69.76, China 6.7088, peso 18.87, BRL 3.9263, Dollar Index 97.35, Oil $65.92, 10-year 2.58%, Silver $15.03, Platinum $889.00, Palladium $1,388.00, and Gold… $1,272.60

That’s it for today… What a awesome display of power put on by my beloved Cardinals last night as they broke the 13-run pool… Did you ever have a group of people that organized a 13-run pool? Fun stuff, for sure! That Brewers lineup is scary though… And it was just one game… gotta come back tonight with more of the same! Hey! I’m so excited about my lunch date today! I’m going to meet up with longtime friend, and the birthday boy this past weekend, Frank! YAHOO! So, I have that going for me today… I forgot to mention yesterday just how darling my little Delaney Grace looked on Sunday… The two grandsons looked sharp too! All dressed up for Easter… The school year is almost over, and next year, little Delaney Grace will be in middle school! Oh No! That can’t happen, can it? I’m afraid so… I sure hope she doesn’t fall into that “middle schooler funk”… The Blue Jays take us to the finish line today with their song: I Dreamed Last Night… (one of my all-time fave songs!) The Blue Jays consist of Justin Hayward and John Lodge of the Moody Blues… And their music sounds just like the Moody Blues! I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts