Looking For Hints, Winks, or Nods.

* Dollar is softer this morning
* After getting sold on weak data on Friday! .
* A Big Data week Globally.
* What’s Lola want to do now?

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

Good Day. And a Marvelous Monday to you! It’s a deluge of rain here in St. Louis this morning. The main road in and out of the area of the river city I live in, was closed due to flooding, so I had to find another way out! Cardinals do enough to keep everyone interested this past weekend, and the Olympics finished their first week and head into the last week of competition. The U.S. Data was bad again on Friday, and Pink Floyd greets me this morning with their song: Money. But if you’re asking for raises, no surprises That they’re giving none away. Story of my life right there folks. Story of my life.

The dollar is slightly softer again this morning. But overall, the dollar has rebounded from the selloff that came on Friday after the latest round of bad economic data, deep sixed the dollar. The reason for this “rebound” overnight has been the realization my traders that the FOMC Meeting Minutes are due this Wednesday, and if these minutes are anything like the previous two meeting minutes, they will drum up some volatility on Wednesday. And no one wants to be on the wrong side of the volatility, so traders backed off their pressure on the dollar, except VS Japanese yen, which booked gains on Friday and has held them through this rebounding of the dollar.

Yes, for some unknown reason to me, that is, the markets seem to still care what the Fed members have to say in these meetings. I think we’ve gotten past the regional presidents talking at conferences or meetings, but these meeting minutes are still important to the traders and market participants. They want to know if there are any “hints” “winks” or “nods” about a rate hike. In addition, they be looking for FOMC key words, “some”, “many”, and “few” with regards to how many Fed members are calling for a rate hike. So, there you have it in a nutshell. The dollar will drift probably until Wednesday afternoon, when the FOMC Meeting Minutes print and then who knows which way it will go. I would think that there won’t be any “hints, “winks”, or “nods” and the markets will take it as there is no drive to hike rates, and that should deep six the dollar. That’s just my opinion on what could happen, I could be wrong.

I actually think the markets will get more of a “hint”, “wink”, or “nod” when Janet Yellen speaks at the Fed’s Jackson Hole Boondoggle later this month. Didn’t the Fed use this boondoggle to announce their intention to go with a round 2 of Quantitative Easing / QE? Why, yes they did, I can still hear St. Louis Fed President, James Bullard, talking about another round of QE. So, there! We have that to look forward to! HA! As If, I would sit around and wait for news from Jackson Hole to make my investment decisions.

Tomorrow, we’ll see the color of the latest stupid CPI (consumer inflation), and I’m sure a lot of traders are still tied to this stupid measurement, even though it is quite clear that the Fed prefers to use the Employment Cost Index (ECI) as their go-to for inflation data. But here’s where things begin to get gummed up. I think the stupid CPI is going to show a large decline, given the drop in gasoline prices. Not that I’m prepared to, or want to, talk about data prints right now, but we were talking about things that could give traders the “hint”, “wink”, or “nod” they need to give the dollar a clear direction.

There is a plethora of data globally this week though. So, this seems to be about as good a place as any to talk about what’s on the docket this week, globally. In Australia, we will see the color of their latest employment data. Remember when late last year and early this year, Australia was booking employment gains hand over fist, and surprising everyone? Well, I think this month’s report will not be in line with those previous reports, and we could very well see a pullback in employment numbers. That would not be good for the Aussie dollar (A$), but traders might take the Chuck’s viewpoint, on this, and see it as a one-off report, and delay the selling of the A$ to next month’s report, and see if this is a trend, or a one-off report. At least that’s what I’m hoping calmer heads might do.

In the U.K. this week they have their latest Employment Report and CPI for July on the docket. I think it’s too soon for labor numbers to be damaged by the BREXIT result, and CPI will continue to show very weak inflation in the U.K. The pound sterling currency fell below 1.30 last week, and can’t seem to get enough buyers to boost it past that figure again. And here’s why. the IMM Futures Positions showed a record number of short positions in pound sterling last week. That’s not a good sign for the currency, folks. Just thought you would like to know.

In Canada, they too will print their latest CPI. And they too will see a drop due to gasoline prices dipping. You know, when I used to load up the Navigator and trailer the camper, and head out on the road for Summer Vacation, there was never any “gasoline price dip”! Like both Canada and the U.S. are seeing this summer driving season. But that’s how things work for me. I drive when gas is expensive, and don’t drive when it’s cheaper. UGH!

Canada will also have their July Home sales data , and Retail Sales on Wednesday, with Retail Sales being the more important of the two. I don’t have a BHI for Canada, but my “sources” tell me that Retail Sales should be just fine. and that would go a long way toward keeping the loonie above 77-cents, where it presides this morning.

And finally, in New Zealand, Reserve Bank of New Zealand (RBNZ) Gov. Wheeler, will give a speech that I shudder to think of what he might say. Longtime readers know that Wheeler has a penchant for dissing kiwi strength just about every time he talks, so be careful here ahead of his speech, for chances are he won’t miss out on an opportunity to diss kiwi strength, and blame it for just about all that ails New Zealand. Kiwi just recovered from the RBNZ rate cut, l would hope it had time to catch its breath, but it doesn’t look that way to me, given what’s in store from Wheeler.

As I told you previously, the European Central Bank (ECB) is on holiday this month, and therefore there won’t be an ECB meeting. I’m not sure I can go on with my life without some words from the ECB, especially ECB President, Mario Draghi, who has been a highlight of my life since taking over the ECB a few years ago. Of course I’m being facetious here. I have to laugh, because years ago, we had a young lady that was an accountant, and one morning I repeated the famous line from Animal House (the movie) about how “it wasn’t over when the Germans bombed Pearl Harbor” And she sent me an email and said, “Chuck, you need to check your history, for it was the Japanese that bombed Pearl Harbor”. HAHAHAHAHAHA Apparently, this young lady had been sheltered her life from “Animal House”. That’s a shame, don’t you think?

Did you get an opportunity to read our Sunday Pfennig this past Sunday? Maybe you get the Pfennig sent to your work address and so you’ll not get to it until this morning. Well, for those of you who did, that idea about how bond yields are lower than dividends came from me a couple of weeks ago, and is quite interesting don’t you think? I was sitting here reading a research report about how Corporate Taxes were falling, which means Corporations are not doing well, but yet, stocks continue to rally. I just kept thinking about how investors used to look at how a corporation was doing before buying their stock, right? So, this idea of bond yields being lower than dividends and the need for investors to find yield, just popped into my brain. Tax receipts from Corporations are falling, and it looks to me like they will continue to fall, because as I’ve said over and over again, this dance is gonna be a drag, no wait! I’ve said over and over again that the train has left the station and is headed to Recessionville.

In case you deleted the Sunday Pfennig in error, (no worries, I know that happens) you can read the Sunday Pfennig here: www.dailypfennig.com

The U.S. Data Cupboard as mentioned above had a lot to do with the direction the dollar went on Friday, which was opposite of the way I thought we could end the week. U.S. July Retail Sales were flat! OMG! Even with Back-to-school buying going on in July! And when you take out auto sales, the flat number goes negative -0.3%… What the heck happened? The BHI indicated that sales would be OK. But, no so fast Tim! They weren’t OK. And guess what else disappointed? Consumer Sentiment/ Confidence gained just 4 tenths to 90.4, with expectations higher but current conditions declining. That’s us as Americans right? We always think that things will get better in the future. And that’s paid off handsomely for us through the years, but. There comes a time when reality must sink in, and if you just keep saying things will get better going forward and they never do, when do you shut that down?

And don’t forget about the awful print of PPI, Chuck! Oh, yes, I did almost forget about PPI (wholesale inflation). July PPI was a negative 0.4%… Where’s the Fed going to find the inflation they need for the next rate hike? And when you take the awful Retail Sales and PPI, on Friday, you have to think that there’ll be no rate hike talk, or rate hike this year. That is unless things make a dramatic change, and sooner or later the markets will get the memo on this, and when they do, I would think Gold, euros, yen, and other assets that have been beaten down because of their low yields, will be back in the saddle again. Of course that’s my opinion and I could be wrong.

Gold had a nice day of trading gains on Friday, after the awful U.S. data printed.. And Gold is up $3 in the early morning trading today. I was going to talk about this on Friday, but ran out of time, and I’m running up against the clock again this morning, but it can’t wait any longer. Did you see where Goldman Sachs aka Lola, and others, want to bring Gold to the 21st century, and get it “exchange traded” so it can be “transparent”. Ok, let me know when you’ve stopped laughing hysterically. OK, are we good now? Yes, that was Lola talking about making Gold trading “Transparent”. My friend, Dave Gonigam, over at the 5 Minute Forecast (www.dailypfennig.com ) was pretty funny with his thought on this. He said that JP Morgan Chase (JPM) was against taking Gold to exchange traded status, so it was Goldman VS JPM. he said choosing between these two was like choosing between two diseases. (he actually mentioned the diseases, but I can’t!)

Dave then goes on to be serious and talks about how when Oil was brought forward in the 80’s that Oil futures contracts began trading, and now, we could have 1 actual barrel of Oil for every contract that trades 100 Barrels of Oil. He reminded us that “there are Paper Barrels of Oil, just like there are “paper ounces of Gold”. Remember Peak Oil? Well, as I reported last week regarding how many years we have left to mine the last Gold nugget, are we experiencing, “Peak Gold?”

To recap. The dollar lost a bit of ground on Friday after U.S. Retail Sales , PPI, and Consumer Confidence all printed ugly, but has rebounded overnight and this morning, although it remains softer as I write. It’s a data docket week globally, and Chuck goes through the paces of those reports. And basically that’s all that’s happening today. Gold is up $3 in early morning trading, and had a good day on Friday. Look for “hints”, “winks”, or “nods” in the FOMC meeting minutes on Wednesday and if you don’t find anything there, check back to Janet Yellen’s Jackson Hole Boondoggle speech later this month!

For What It’s Worth. Well, I can’t help you with this entire story this morning, unless you have a subscription to the Wall Street Journal (WSJ). But it’s about Student Loans and debt that’s not going to get paid back apparently. Let’s go to the snippet to see what’s up!

Here’s your Snippet: “According to a new report by the Wall Street Journal, 7 million Americans are flat-out refusing to pay back their student loans because they feel scammed by their universities and government. They feel like they were told to go to school and are now left with worthless degrees, no jobs, and no prospects for the future. The government has tried many tactics to reach these defaulters, but their efforts have been fruitless for over a year.

Chuck again. Oh, yes, these poor students, who were told to go to school, and build up these huge debts, while a gun was held to their heads! It’s always somebody else’s fault right? It has to be! They told me if I went to school I would come out as President of a Corporation, and be a millionaire! It’s their fault! They told me these lies! Brother! What a bunch of whining! You know here I started my career? In the mail room at a brokerage house. I’m just saying.

Currencies today 8/15/16.American Style: A$ .7665, kiwi .7205, C$ .7740, euro 1.1170, sterling 1.2910, Swiss $1.0263, . European Style: rand 13.4172, krone 8.2230, SEK 8.4640, forint 277.20, zloty 3.8250, koruna 24.1950, RUB 64.33, yen 101.05, sing 1.3440, HKD 7.7570, INR 66.88, China 6.6398, peso 18.14, BRL 3.1922, Dollar Index 95.62, Oil $44.69, 10-year 1.51%, Silver $20.02, Platinum $1,129.62, Palladium $690.77, and Gold. $1,346.60

That’s it for today. Well, now I’m officially really late! But that’s Ok, I can blame it on the rain!, and no, I’m not quoting two frauds. Well, as luck would have it, I had pick #10 in our fantasy draft on Friday night. UGH! I once again don’t like my team, but one never knows until the season gets going how it will work out. Cardinals split the 4 games in Chicago this past weekend, which is far better than it looked like would happen given they lost the first two games, and then had a rookie pitcher making his inaugural major league start. But that’s why they play the games. I get all eerie when it rains non-stop like this, as the memory goes quickly back to the end of last year. UGH! Please rain stop. I’ll get the results of the scans I had last week this week from the doctor. I took a peek at them on my charts I get. And I think they say everything is as it was. And with that, I need to get going. Modern English takes us to the finish line today with their song: I Melt With You. one of the most played songs from the 80’s. I hope you have a Marvelous Monday. Be Good To Yourself!

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