Weak Aussie Data Sends The A$ Downward…

Rocktober 5, 2017

* ADP report says job creations lagged…
* ECB is meeting as Chuck writes this morning…
* No videos from Chuck!

Good day… And a Tub Thumpin’ Thursday to you… By now you should know the routine… Every other Thursday, is an infusion day, and that’s today, which means there will be no Pfennig tomorrow… Blame it on “infusion confusion”… With which, if I’m lucky, will have cleared my head by late afternoon on Friday, and if I’m not lucky, the weekend will be a bummer! The Marshall Tucker Band greets me this morning with their song: Heard It In A Love Song… There was a time, back in the 70’s when I would predominantly listen to Marshall Tucker, The Allman Brothers, Charlie Daniels, Elvin Bishop, and a few more, what they called “Southern Rock”…

OK… Well, Front and Center this morning we have the ADP Employment report to go over, and trust me you’ll get the real news on this report and not what the “Spin Doctors” gave you when the report printed yesterday. ADP said that Companies only added 135,000 jobs in September, period. ADP doesn’t get into spinning reports so that the markets will feel good… They leave that for the “Spin Doctors” who must have pre-written their responses to the slowest report in nearly a year… The “Spin Doctors” immediately hit the news wires saying that the Hurricanes Irma and Harvey had reduced the number of new jobs that Companies would have hired people for during September. OK, I’ll give them some slack in that, sure in the Houston area, and the Jacksonville area, where flooding was just awful, there was no new hiring going on, but then who knows IF there was even going to be some during the flooding? Only the Shadow Knows

One of these days, Alice! I would like to load all these “spin doctors” up in a rocket ship and send them to the moon!

I have to stop and laugh out loud here… The Buddy Fuller Four’s song: I fought the law, is playing right now, and many years ago, before cancer, I used to do all the grass cutting, trimming, aerating, fertilizing, etc. And I wrote in the Pfennig that I changed the words to that song to: “I Fought the Lawn, and the Lawn Won!” And a Pfennig reader sent me a T-shirt with that saying on the front of it! I wore it proudly while “fighting the lawn”!

There was some selling of the dollar after the ADP report yesterday, but in reality, the moves were small, and it appears what I said yesterday about how traders are looking for the next “something” to give them directions for the currencies, is holding true… In fact, I saw on Bloomberg this morning a writer there saying the same thing… I wonder where he got the idea? Oh, move along Chuck! People don’t want to hear about how you think Pfennig Readers that also write for websites, use your thoughts…

Besides, even if that were true, it would be a form of flattery, right? OK, back to reality, for we can’t remain in “Chuck’s world” too long, it’s not good for our health! HA! The Aussie dollar (A$) slipped a bit overnight, as they printed two reports that didn’t sit well with traders… As they shouldn’t have! Aussie August Retail Sales were negative 0.6%, which marked two consecutive months of negative results for Retail Sales. In addition, Australia’s August Trade Deficit widened to A$989 Million VS A$ 808 Million in July.

These are the first pieces of data for Australia that have caused traders to rethink their rate hike call for later this year. I think that traders are getting ahead of themselves, and these two prints are just a small sample, and that they should wait to see further data before making such a rash decision!

The euro ticked higher by a small amount throughout the day and overnight… The euro has had two body blows that it has had to deal with in the past 10 trading days. First we have the political uncertainty in Germany, the Eurozone’s largest economy, and then the Catalan vote to leave Spain hanging over the euro like the Sword of Damocles! Speaking of the Catalans, their president is scheduled to speak today, and I think this is the time that he will give us the results of the vote that took place over the weekend… (I guess they still do it the old fashioned way… manually. I wonder if any “hanging chad” was a problem for them! HA!)

Come on Chuck, this Catalan vote is nothing to joke about! Get your head on straight! Yes, I’m well aware of how important this vote is, but can’t a guy have a little fun to keep the moment from getting so serious?

The price of Oil slipped below $50 in the past 24 hours, but has regained the figure as I write. The U.S. reported record amounts of Oil shipped out of the country, thus causing the price of Oil to drop, given the thought that the U.S. supplies must be huge! I want to point out something that I’ve talked about a lot in the past 9 months, and that is the Norwegian krone, and how its so tied to the euro… And last night was a good illustration of that, as the price of Oil slipped below $50, the krone didn’t budge, and in fact gained a small amount as the euro rose…

The Brazilian real has been really stealth-like with its recent rally. I noticed this yesterday, when I was recording the currencies for the currency roundup. Every day, the real is a bit stronger than the next day, and at first I thought, no biggie, but now the move has seen the real move from 3.1777 on 9/28 to 3.1352 this morning… I know, I know, not a major move, but when the rest of the currencies are struggling to find a bid, the real has moved stealth-like stronger without much fanfare. I sure hope didn’t just give the real the kiss of death! UGH!

Gold held its early morning gains yesterday, for the most part, and closed the day up $3.50. Gold is up another $3.70 this morning and as I write, the shiny metal is trading at $1,280.50… Reuters ran an article on Gold at the Perth Mint, let’s listen in to hear what they had to say… “The Perth Mint’s sales of gold products doubled in September from a month earlier, while silver sales surged 78 percent, the mint said in a blog post on its website on Tuesday.

Sales of gold coins and minted bars jumped to 46,415 ounces in September from 23,130 ounces a month ago, the mint said. Silver sales during the month also rose to 697,849 ounces, compared with 392,091 ounces in August.

The Perth Mint refines more than 90 percent of newly-mined gold in Australia, the world’s No. 2 gold producer after China.” Hmmm, very interesting… I love reading about physical Gold trading figures! So, have you taken advantage of this recent pull-back in the price of Gold? If not, what are you waiting for?

And a story caught my eye this morning regarding Solar panels.. Why would that catch my eye? Well, Solar Panels use silver, and a lot of it to boot, and the article suggests that Solar Panels out sold every other form of alternative energy this past year… Well, if that were to continue it would provide a nice underpin for Silver…

Well, bust my buttons! I’ve gone on this far this morning, and haven’t mentioned the European Central Bank (ECB) meeting that’s going on as I write! Recall, that this was the meeting that ECB President Draghi, told us he would spill the beans regarding the Unwinding of their balance sheet… But as the days drew near for this meeting, the chances of that happening grew slim and none, and Slim left town! So, the ECB meeting today is probably just a routine matter, and that’s why I crept out of my mind this morning!

Not that I need to make excuses for where I put things in the letter! No, one part is more important than another. In fact I always intend to sprinkle things of importance throughout the letter, so that readers don’t just go to one piece of the letter to read..
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The U.S. Data Cupboard will have a piece of real economic data for us today when Factory Orders print for August… the last couple of Factory Orders prints have been negative, so I expect this one to at least print with a positive tone…

Have you ever received one of those emails that tell you to watch this “short video” about some market moving idea, and you click on the “short video” only to be taken on a 1/2-hour tour of the writer, his credentials, and why he thinks you need to sign up for his “special letter” to find out the name of the asset he’s selling, and then get so upset that you wasted the time to sit through that? Well, I’m here to tell you that I won’t be sending you any of those “special videos”!

And on that thought, it’s time to wrap this up with a neat bow and get it out there, so I can get ready for my visit to the infusion center… UGH!

To recap… The ECB is meeting as I write today, but don’t expect anything from them, as they previously promised. The ADP jobs report yesterday showed just 135,000 jobs created in September, and the dollar got sold a little bit… Some of the currencies have carved out gains, but for the most part, it’s a pajama party for the rest of the currencies, as they trade in yesterday’s PJ’s! Gold held its early morning gains yesterday and is up again in the early morning trading today. The price of Oil slipped below $50 overnight, but has regained the figure this morning.

For What It’s Worth.. Thank goodness for Ed Steer’s letter! I found this on his letter this morning and it’s an article about Gold, and can be found here:https://www.sharpspixley.com/articles/lawrie-williams-metals-focus-still-sees-gold-hitting-$1-400-average-in-2018_272411.html

Or, here’s your snippet: “In his presentation at the launch of this latest publication, Neil Meader, the group’s Research and Consultancy Manager, reflected on a slightly disappointing performance for the [precious metal] complex, despite great promise earlier in the year. The report thus suggests only a 2% average rise in the metal price this year compared with 2016. An earlier 5 year analysis of the precious metals complex by the consultancy had predicted $1,400 gold this year, and while this has not been totally ruled out, the latest analysis suggests that this price level may now not happen until next year unless some worrying geopolitical event (North Korea looks to be the most likely instigator) causes the metal price to spike again.

Writing here a week or so ago, we had suggested keeping a close eye on the largest gold ETF (GLD) to see the trend in institutional investment in gold in North America, which seems to be a great indicator of U.S. investment demand and thus of the overall trend in the global gold price level. After a strong couple of months, the past two days have seen 10.35 tonnes withdrawn from the ETF which is perhaps indicative of weak institutional demand for gold in the light of the recent price falls, although much of these can be put down to some recovery in the dollar index over the past few days.”

Chuck again… What can I say? Nothing new here, but at least we know that people are talking about Gold, and that’s a good thing!

Currencies today 10/5/17: American Style: .7821, kiwi .7155, C$ .8017, euro 1.1765, Sterling 1.3193, Swiss $ .9767, … European Style: rand 13.6422, krone 7.9585, SEK 8.1022, forint 264.79, zloty 3.6640, koruna 21.9395, RUB 57.70, yen 112.60, sing 1.3623, HKD 7.8087, INR 65.09, China 6.6624, peso 18.26, BRL 3.1352, Dollar Index 93.49, Oil $50.14, 10 year 2.32%, Silver $16.68, Platinum $913.38, Palladium $928.75, and Gold… $1,280.50

That’s it for today, and this week… I’ll talk to you again on Monday, God willing… Well, our Blues got off on a somewhat good foot to their season last night in Pittsburgh. The Blues had a 2 goal lead in the 3rd period, and saw that lead go the dumpster, but then won the game in overtime! The last two years, I’ve gone out on a big fat limb and said that “this is going to be their year” only to see it not be their year! So, this year, I’m keeping my big fat trap shut! I was switching the TV channels back and forth between the hockey game and the NL Wildcard game, which the Diamondbacks eventually won… Again, why do they need to start games so late? I wonder what the oncologist will have to say today… The Doobie Brothers take us to the finish line today with their song: Natural Thing… I hope you have a Tub Thumpin’ Thursday, and remember to Be Good To Yourself! And today, looks like a good day, to have a good day…

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

 

a) The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group.

Chuck Butler recently joined the Aden Research Group, a research center led by writers and market analysts Pamela and Mary Anne Aden. The Aden Research Group publishes three newsletters:
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We are excited to have Chuck as a member of the select and elite group of writers and analysts within the Aden Research Group.