The Dollar gets right back on the rally horse

Good Day... And a Marvelous Monday to you! What a Saturday for yours truly! My beloved Mizzou Tigers won their game in Nashville, and are now 5-0! They have a BIG GAME with LSU this coming Saturday... Go Tigers! After getting beaten around the head and shoulders repeatedly Friday night, my Cardinals reversed the beatings and beat down the Reds on Saturday, and finally our StL. City team won 4-1 Saturday night with me in attendance! All four StL goals were scored in the goal that's right in front of me! I went to the game with good friend, Rick B. and we had a grand time! I started my new chemo last week, and it's already causing me some stomach problems... It's no fun always having to be near the bathroom! But... I carry on, despite my shortcomings! Triumph greets me this morning with their song: Lay It On The Line.

Well... the dollar lost 2 index points on Thursday last week, and then ended the week on Friday, flat as a pancake (Head East)... But Gold... oh my... this is getting beyond egregious; it's become a matter wrongdoing! Gold was up $31 higher than it closed on Friday, which was down $15.90, to end the week at $1,849.40... So the dollar's strength didn't play into Gold's price on Friday, as it was simply a matter of the short paper traders going after Gold like Gold had said that the short paper traders' mothers wore army boots! Silver also lost ground on Thursday and Friday last week, with Friday's loss being 43-cents!  I'm so full of dissolution here folks... The short paper traders have always played their games with Gold's high price, and then buy it back after they got the price lower, but these days it seems they have their eyes on something else.

Here's Ed Steer with his thoughts from his Saturday letter: "I thought that the title for today's column...Beyond Egregious...was appropriate, considering what the commercial traders laid on us yesterday. I've become pretty jaded about things over the years, but what I saw yesterday even set me back on my heels for a bit. That was the most 'in your face' engineered price decline in silver I've ever seen."

The price of Oil dropped a buck on Friday, and end the week with a $90 handle... And while I truly believe that the Fed Heads have their hands in the bond cookie jar, once again, but doing it anonymously, they will get their hands caught in the cookie jar soon enough... The 10-year's yield dropped a bit on Friday to end the week at 4.57%... That's after it reached a yield of 4.65%...  See, what I'm talking about here with the Fed Heads? 

Well, the lawmakers averted a government shutdown in the 11th hour Saturday night, with a temporary funding agreement that will only come around again in 2 weeks and throw all this drama back in our faces again... I love it when they say the Gov't's funding agreement... Like they have money to fund anything! There are all kinds of things that would have happened if they hadn't reached an agreement, but they did, and so now we can just move along again... Until the extension is up that is... I'm just saying! 

In the overnight markets last night... the dollar got back on the rally horse, and rode it all night long. The BBDXY is up 4 index points this morning to start the week... The only currency that had some life overnight was the Swedish krona, who got thrown a life saver, when the Riksbank sold dollars and euros and bought krona to stem its losses, and bring it back to a 10 handle... Gold is getting whacked again this morning, as it appears that the selling isn't over, as Gold is down $13 to start the week. Silver is also getting whacked, down 49-cents this morning... I really don't know what to tell you, on the metals, other than ignore the selling here in the U.S. Did you know that Gold in China is soaring? The shanghai Gold Exchange, where they don't allow short paper trading, Gold is much higher than it is here... Imagine that? No interference in trading, and true price discovery... It's been a very long time since we've had anything close to that here in the U.S. 

The price of Oil is up to a $91 handle this morning, and the 10-year's yield recovered some lost ground late last week, and is trading with a 4.63% yield this morning... 

Long time friend, and former Big Boss, Frank Trotter sent me a note last week, showing the usage of currencies in trade that took place in July 2023 (this year), and the dollar still # 1 by a wide margin at 46%, the euro is still #2 at 24%, and then sterling at 7%, and so on... This made me think of something that I used to point out years ago when I gave presentations, and at that time the dollar's usage was falling and it was 63%... So, while the dollar's usage is still by a wide margin #1, it's fame and fortune is falling still...  You know, back then the Chinese renminbi wasn't used at all... And today it is used 3%... I'd say that's a nice upward move from nothing! 

Well, it seems that most of the countries of the world, that partook in a rat hike cycle, have decided it's time to wait-n-see, and that has helped the dollar to gain even more, as its yield advantage VS those countries will just continue to provide a plus... Bond yields in Treasuries are getting higher and higher, and that also helps the dollar in its time of need... But trees don't grow to the moon, and hit songs don't remain #1 forever, and with that thought, the dollar's strength won't last forever, that's for sure, so bide your time, look for a bargain, and wait out this period of dollar strength... That's about all I can say at this point. 

The U.S. Data Cupboard late last week had Personal Income and Spending... Both were up .4%, But... But Real Disposable Income fell 0.2% MoM (the 3rd monthly decline in Americans' earnings in a row)... So, you know what that's telling us, right? That most of the gains in wages are being eaten up by inflation, and rising prices... I'm surprised that the Personal Spending was as strong as it was... But then it is a "Government report", and we have to take with a grain of salt!  

This week's Data Cupboard is not chock-full-0-data but does have some interesting prints, like this morning's ISM for Sept... and then culminating to Friday's Jobs Jamboree... More government prints for sure! 

To recap... The dollar got sold on Friday last week, but in the overnight markets last night, got right back on the rally horse, and rode it through the night... The Riksbank thew the krona a life saver... And the selling in Gold & Silver isn't over, as witnessed this morning's activity... 

Here's your snippet: "When everyone expects a soft landing, brace for impact. That’s the lesson of recent economic history — and it’s an uncomfortable one for the US right now.

A summer in which inflation trended lower, jobs remained plentiful and consumers kept spending has bolstered confidence — not least at the Federal Reserve — that the world’s biggest economy will avoid recession.

A last-minute deal to avoid a government shutdown kicks one immediate risk a little further into the future. But a major auto strike, the resumption of student-loan repayments, and a shutdown that may yet come back after the stop-gap spending deal lapses, could easily shave a percentage point off GDP growth in the fourth quarter.

Add those shocks to other powerful forces at work on the economy — from dwindling pandemic savings to soaring interest rates and now oil prices too — and the combined impact could be enough to tip the US into a downturn as early as this year.

Here are six reasons why a recession remains Bloomberg Economics’ base case. They range from the wiring of the human brain and the mechanics of monetary policy, to strikes, higher oil prices and a looming credit squeeze — not to mention the end of Taylor Swift’s concert tour.

The bottom line: history, and data, suggest the consensus has gotten a little too complacent — just as it did before every US downturn of the past four decades."

Chuck again... The writer then goes on to explain the 6 reasons there will still be a recession... so, don't miss it! 

Market Prices 10/2/2023: American Style: A$ .6391, kiwi .5967, C$ .7346, euro 1.0532, sterling 1.2155, Swiss $1.0932, European Style: rand 19.1343, krone 10.7442, SEK 10.9940, forint 368.97, zloty 4.3799, koruna 23.2256, RUB 98.76, yen 149.74, sing 1.3722, HKD 7.8325, INR 83.04, China 7.2980, peso 17.56, BRL 5.0549, BBDXY 1,269.69, Dollar Index 106.53, Oil $91.30, 10-year 4.6$%, Silver $21.77, Platinum $898.00, Palladium $1,224.00, Copper $3.76, and Gold... $1,836.88.

That's it for today... It's Rocktober! And fall is slipping by us quickly... Weather-wise, it's been quite warm around here this past week, but it will cool off soon... Baseball begins its playoffs tomorrow, good luck to all who's involved this year... That was a good win for my Mizzou Tigers on Saturday, that could have been a "trap game", but it wasn't, so good for them! I know this is a bit later than usual this morning, I had a real bad incident this morning that I had to work through, but it's all good now... I know some of you are not aware of why I call this month Rocktober... Well, it all stems from an FM radio station here in St. Louis, who used to call it Rocktober, and so I adopted it! So, welcome to Rocktober... The grocery store already has tons of Halloween candy on display... UGH! Signs of the times... The Cure takes us to the finish line today with their song: Friday, I'm In Love... I hope you have a Marvelous Monday today, and please Be Good To Yourself!