Greece Drama Turns To A Jobs Jamboree Day

* No negotiations, just a new poll .
* Riksbank deepens negative rates! .
* N.Z. Dairy Prices decline again..
* Currency Wars take over.

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

Good day. And a Tub Thumpin’ Thursday to you! Well, I completely forgot about Pfennig Tradition yesterday. I guess I was too hopped up on the Greece default. So, in keeping with Pfennig Tradition at the beginning of July, here we go. There I was on a July morning, looking for love. With the strength of a new day dawning, and the beautiful sun. At the sound of the first bird singing, I was leaving home. – Uriah Heep. That’s a rock classic if there ever was one! Many years ago, when I was playing with the band, I had an 8-Track of Uriah Heep live, and I played it over and over again, until one day, the tape started spilling out of the 8-Track player and all over the floor of the car. UGH! It was the end of my enjoying July Morning in the car, until years later, and better contraptions to play music came along!

Well, once again this morning, the dollar has the conn, and it isn’t a pretty thing, unless you’re a dollar bug. The euro is up, but given where it had fallen to yesterday, “up” is all relative. Gold is down in price again, and the price of Oil is also down again. So, there you have it all for you to take in this morning. There’s no news of any negotiations with Greece and the Eurozone, there was another poll/ survey taken on the Greek referendum, and this time the results of the poll were different, with those surveyed saying they would vote “yes” at 47% and “no” at 43%… Of course like I said yesterday, polls aren’t always the “end all” of how people will vote when it gets down to the actual vote.

We did get a surprise from Sweden’s Riksbank this morning. The Riksbank decided to take their repo rate further into negative territory folks at -0.35%, and increased their QE with an additional amount of SEK 45 Billion. Now, you may recall me telling you that I didn’t see the Riksbank doing anything at this meeting because THEY TOLD US THAT INFLATION WAS THEIR WORRY, and the inflation has ticked higher recently. So apparently, the Riksbank wasn’t just tracking inflation. I don’t like it when Central Banks tell you to watch something, and then they do the old statue of liberty play in football and end up running around the end with the ball. UGH! Central Banks. They are my arch enemy these days, for they just don’t get it, and the problem is they have tons of economists and analysts working for them and they still do these Jedi Mind Tricks with monetary policy. OK, like I said yesterday, someone get me a sucker, I’m about to throw a temper tantrum!

So, when a Central Bank pulls a rabbit out the hat, sorry wrong hat, HA! But when they do dolt things like this, their currency gets whacked, and that’s what’s happened to the Swedish krona overnight. And when the krona gets whacked like this, the Norwegian krone sells of in sympathy.. It’s a two for the price of one, if you will.

And down in New Zealand, it got really ugly folks. The latest auction for dairy prices came in at a negative -5.9%, the 8th consecutive auction where prices declined. Now, we’ve been over this many times in the past. Wool, lumber, and dairy are the 3 major exports of New Zealand, so when one of the three takes a hit like this, you can bet the N.Z. dollar / kiwi bears were all out roaming the picnic grounds and scaring the poor families that were trying to have a nice day in the park! And just like Sweden and Norway, you can usually bet that wen kiwi gets sold, the Aussie dollar (A$) sees selling drift across the Tasman.

But today’s price action in the A$ isn’t just about sympathy with kiwi selling. The Aussie Trade Balance, that I talked to you about yesterday, saw an improvement in the deficit, but unfortunately, most of that improvement was due to weak imports that fell -4%, and that points to soft domestic demand, and that’s not a good thing.

In the “mother country”, the U.K., yesterday I told you about the soft PMI (manufacturing) print, but this morning, we saw Construction Spending data that was quite strong from the U.K. So, things are “all bad” in the U.K., just “most things”. Which means interest rates aren’t going anywhere, I don’t care what Bank of England Gov. Mark Carney, says! He’s proven to be just what I said he was, a Central Bank Gov. that promises rate hikes, and never delivers them.

The Swiss National Bank (SNB) is probably smiling like the Cheshire Cat this morning, as the franc has dropped 2-full cents this week. And again, with all that’s going on in the world, one would think the franc, and its safe haven status, would be cooking with gas this week. I haven’t heard of any intervention by the SNB, but I wouldn’t rule that out, as the drop has been swift, which normally indicates Central Bank selling.

The Chinese renminbi reversed the appreciation it saw the previous night, and weakened last night. I have to say for the first time since I’ve been following the Chinese renminbi, that I am growing disappointed with the Chinese authorities over how the renminbi is being handled. But I’m certain that the Chinese leaders aren’t losing any sleep over that! HA! The Currency Wars are going on all over, and two places we didn’t have to worry about (in the past) were the Eurozone and China, where their leaders promised not to join the Currency Wars. But that’s all water under the bridge now folks.

Well, the U.S. Data Cupboard was kind to the dollar yesterday. the ADP Employment Change, which as I’ve told you previously, is supposed to be an indicator of what the Jobs Jamboree will have for us, was stronger than expected with 237,000 jobs created according to ADP in June, when only 218,000 were expected. the ISM Manufacturing Index printed at 53.6, when it was expected to print at 53.4, so a slight improvement, over expectations and the previous month which was also 53.4. I guess the so-called “experts” got caught up in the same reasoning I used yesterday, when I told you that the regional manufacturing indexes had all printed weak, so therefore that should indicate that the National Index would be weak. But NOOOOOOOO! Forget all those regionals! And that’s what I’m going to do from now on! I don’t care about the Philly Fed, the Empire State and so on, they don’t mean a hill of beans!

The Fed members must be feeling it right now. Feeling the pressure to hike rates. But, they know in their heart of hearts that something just isn’t right here, the economy is so uneven, and today, we’ll get a taste of that, when May Factory Orders print negative once again. In 7 of the last 8 months, this data has printed negative, with the only positive month of March of 2.2% printing. So, there you are! Yesterday’s data, and today’s data all rolled into this discussion. Who else out there in “writer-land” does that for you?

And I’ve gone this far today, and have not mentioned what today is all about for the markets. The BLS Jobs Jamboree, which will print on our Tub Thumpin’ Thursday this month instead of tomorrow, because, well, the powers that be, don’t think there will be anyone around tomorrow. I know I just told you that the ADP report was stronger than expected, but I don’t think that will spill over to the BLS Jobs report. Now, a couple of months ago, I told you that I was finished with the BLS Jobs report, that I just didn’t think it reflected the real picture of the labor sector in the U.S. The BLS report has so many hedonic adjustments, that I just grew tired of dealing with it. But it’s those adjustments that might make today’s report look somewhat strange.

So, let me set this up. The so-called experts have forecast a rise of 233,000 jobs in June, and the ADP report reported 237,000 jobs in June. But, I’m going to go out on a limb here and say that this month’s report could print below 200,000. And the lower number would all be tied to “seasonal adjustments”. What will the markets do with a print that misses expectations on the downside? Who knows? The way things are going right now, all signs point to dollar strength, and it wouldn’t surprise me on iota to see someone say to not worry that the jobs creation will come back strong in July, and the dollar rally further.

On a sidebar. Yesterday, I was being snarky, as usual, and printed the words to Happy Days are Here Again. And then a reader of the Pfennig on the website: sent me a note that made me think, and I believe will make you think too.. Here’s what he had to say, “Interestingly, the song “Happy Days Are Here Again” was copyrighted in 1929. Draw your own inference from this ominous coincidence”

Gold still can’t find any wind for its sails.. But that doesn’t mean investors are leaving in droves from the shiny metal. In fact, according to the U.S. Mint. Sales of Gold American Eagle Coins jumped to 76,000 ounces in June, the highest since January and more than triple the 21,000 ounces sold in May. I found it very interesting that the Gold exchange traded funds dropped 0.8% in June, falling for the 4th consecutive month. So. were people selling the paper and buying the physical? It sure looked like it. And it wasn’t just American Eagle Gold Coins. The American Eagle Silver Coins was sales surge to 4.84 Million ounces in June VS 2 Million ounces sold in May.

I could go into a real rant here about how when every investor decides to sell the paper trade and buy the physical the price manipulators would get smashed. But I’ve done that, been there and bought the T-Shirt. It’s time to move on to something else before I begin to get a rash.

To recap. Well, it’s a Jobs Jamboree Tub Thumpin’ Thursday today! The dollar has the conn today, and will probably keep it going into the 4th of July Holiday weekend, which begins tomorrow for many people. The stock market will be closed, and many businesses here in the U.S. tomorrow, so, that’s why the Jobs Jamboree takes place today. The Riksbank took their negative rates deeper into negative territory this morning, and increased their QE, and the krona got whacked! N.Z. dairy price auction saw dairy price decline for the 8th consecutive auction, that has kiwi getting whacked too. Aussie Trade Deficit improved but declining imports that point to softer domestic demand are the reason, and the A$ sees selling too. Gold is getting sold again this morning along with Oil, so it’s all about the dollar today folks.

For What It’s Worth. Well, the announcement of EverBank World Markets’ new MarketSafe CD has been somewhat stealth-like. I don’t know what’s going on with this, but I did notice that our friends over at Agora Publishing put out two notices about the new 5-Year MarketSafe PowerMetals (sm) CD. It’s the first metals-based CD EverBank has issued since 2011.

So, I strongly suggest that you go to our web site and find out about it. OR, simply scroll back to the top of the letter and click on the link. OR, just pick up the phone and call 1-800-926-4922, to talk to a currency specialist about this new MarketSafe CD.. I know from the emails in my email box, or the Pfennig Replies box that over the years, investors have been asking for a return to issuing metals based MarketSafe CD’s.. So, I’m glad to see us with tis offering once again.

Chuck again. Well, I never really left you today, doesn’t that give you a warm and fuzzy? I wanted to thank Joe over at Agora Financial for jumping on this offering and getting the word out the door. Of course if this is not your cup-o-tea, then you don’t have to go check it out, but if it is, then here you go!

Currencies today 7/2/15. American Style: A$ .7600, kiwi .6670, C$ .7930, euro 1.1080, sterling 1.5585, Swiss $1.0535, . European Style: rand 12.3395, krone 7.9360, SEK 8.4375, forint 284.15, zloty 3.7840, koruna 24.6060, RUB 55.69, yen 123.50, sing 1.3515, HKD 7.7515, INR 63.51, China 6.1171, pesos 15.81, BRL 3.1480, Dollar Index 96.25, Oil $57.03, 10-year 2.44%, Silver $15.59, Platinum $1,077.50, Palladium $697.70, and Gold. $1,160.84

That’s it for today. Well, I’m sure glad the series with the Chicago White Sox was only 2 games, because they came here and kicked tail and took names later! The Pale hose were the better team for two nights. UGH! And the two games the Cardinals picked up early in the week, have been given back. The optimist would say, that’s OK, a week off the calendar, and no movement in the standings, and the eternal worrier would say, the trend is going the wrong way! Lee’s Summit, Missouri, got hit by a tornado last night, that’s on the other side of the state, but still in Missouri! I just heard that there’s been a shooting at Navy Yard this morning. Geez Louise, I hope everyone is safe. Had lunch with Chris Gaffney and Alex (my son) yesterday, as Chris prepped Alex for his Ironman thing next month. That was awfully nice of Chris to do, for Alex, and I thank him for that! Next week, I’m going to put the link for people to pledge money to the fundraiser for ALS which is the reason Alex is going through all this training. Like I saw previously, let’s see how much money we can raise for ALS (Lou Gehrig’s disease). And with that. Let’s go make this a Tub Thumpin’ Thursday, eh?

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