The Dollar runs into a roadblock

Good Day... And a Marvelous Monday to you! Well, we're into Rocktober... And welcome to Rocktober... Pfnennig tradition call for me to use Rocktober this month, as many years ago, I was telling people I used to play in a rock bank, and a dear reader said that I should incorporate that info somehow in the Pfennig... So, Rocktober was born... Aren't you glad you wondered what Rocktober was all about? HA! The Moody Blues greet me this morning with their song: Ride My Seesaw.

So... I was out of pocket on Friday for a bit and when I came home, I was shocked to see that the BLS reported that only 29,000 jobs had been created in September... So, I immediately went to see how many Birth/ Death jobs were added and there I saw a revision took place... Oh, 190,000 jobs were taken away that were previously were reported and that's why only 29,000 were reported for Sept. 

You got to see the BLS revise their previous indiscretions... But, that's just the start of them, the major one will come early next year... So, moving on...

The dollar found the footing for moving higher a little tricky on Friday, and the BBDXY lost 3 index points, after reaching as high as 1,225 on Thursday... The dollar is so overbought, in the RSI... That, and the fact that a low employment figure got the rate hike enthusiasts to rethink their multiple rate hikes thought... At lease for a day, that is.

The price of Oil slipped to end the week at $91...  and the 10-year was as high as 5.35 before the FED Heads stepped in ang bought a boat load of the bond to bring the yield back to end the week at 5.23%.

In the overnight markets last night... The dollar bounced back by 1 index point last night, and the BBDXY sits at 1,223 to start our day/ week... This dollar strength is ridiculous folks, for the items on the bad side for the dollar signaling weakness are as long as my arm... But right now, the thing sending the dollar higher is interest rate expectations... That seems ridiculous to me... But it is what it is.

Gold/ Silver are both on the plus side this morning... Hey! Even a guy at Morgan Stanley is touting $5,000 Gold... So, not of all Wall St is bearish on the metals... I think that Gold/Silver are in waiting... Waiting for the interest rate folks to give up the ship, and then they will get on the rally horse and ride it until spring... That's my Pfennig for the day.

The price of Oil has bumped higher and trades with a $91 handle this morning... The 10-year Treasury is back to seeing its yield rise this morning as we start the day/ week with its yield at 5.27%.

The currencies didn't ract favorably to the dollar selling on Friday... The euro fell futher in the 1.12 handle and the rest of the currencies fell in behind the BIG DOG euro... The one currency that held its ground was the Chinese renminbi ... The Russian ruble got marked down VS the dollar since the price of Oil is wandering these days back and forth around $90... and the Euro Wannabes are signaling that we should get ready for a long period of dollar strength.

Bill Bonner had a quote by Rolf Wichter in his letter last week and I couldn't let it go without copying it here... Read this carefully: " It would make sense for the bond market to take a breather here and digest a little. But the dynamics are in place for yields to rise further.

The 20-year Treasury yield rose by 17 basis points during the week, and by 37 basis points since Warsh’s Jackson Hole speech on August 28, to 5.55% on Friday, the highest since June 2004, and higher than the 30-year Treasury yield (5.50%).

During the day, the 20-year yield had traded as high as 5.59%.."

Chuck again... I told you last week that I couldn't recall the guy's name that said that yield could go higher... Well, Wolf Richter was where I got that info... 

The yields going higher isn't all about interest rates folks... The bond market is telling us that something is wrong... And that the higher yields are what's going to be needed to get someone interested in our bonds... Think about that a for a minute.

Man, I would need a calculator to count all of the emails I receive telling me that this "stock" is going to be the cat's meow.... And each one has story to go along with their call, that lasts about an hour... How would like it if I sent you an email telling you all about a currency that's going to fly high, and then give you a 45-minute speech about why I'm right? And then sent it to you 3 times a week?  

Be glad I first of all don't agree with this type of Marketing, and second, that would take up too much of my time... Ok, time to go on to something else... 

Just complaining... That's what old guys do... Sat outside at friend Rick's house Friday night... And you should have heard us complain about stuff! 

The U.S. Data Cupboard is basicall empty all week... There are some reports printing but they are 3^rd tier and won't move the markets and and we don't have a ton of Fed Head speakers either... So, the Data Cupboard is big nothing burger this week... We will or we won't see the Consumer Credit for Aug. I say that because this data is always late in reporting... So, we'll see it when we see it... 

To recap... The dollar ran into a roadblock on Friday but bounced back a bit overnight... Gold / Silver fought tooth and nail for higher ground and finally the SPTs let them have it... This is a week void of all the data we normally see and that should be bad for the dollar... But then who knows what moves the dollar these days besides rate hike expectations? 

Here's you (very long) snippet: " Term premia have risen across major developed markets, including the U.K., France and Germany, as investors confront persistent inflation, growing government borrowing requirements and deteriorating fiscal balances.

In other words, government bond markets may still be functioning perfectly well, but investors are demanding a higher price for the risks they are taking.

That could prove increasingly important for gold.

Gold has already demonstrated remarkable resilience in an environment that, according to the traditional playbook, should have crushed demand. U.S. Treasury yields have risen to levels not seen since 2002, monetary policy has tightened and the U.S. dollar has strengthened. Yet gold remains above $4,000 an ounce.

Real yields at 2.24% present a genuine headwind for gold. But that doesn’t diminish the precious metal’s role as a monetary asset. Gold has no sovereign issuer, no fiscal deficit and no refinancing requirements. It doesn’t depend on a government continually issuing larger amounts of debt to meet its obligations.

The IMF explicitly says markets remain orderly. But analysts have noted that orderly doesn’t necessarily mean risk-free. The important question is whether rising global yields represent attractive competition for gold or a growing risk premium attached to sovereign debt.

If it is increasingly the latter, higher yields may not be as bearish for gold as conventional wisdom suggests.

Gold doesn’t need the global bond market to break.

It may only need investors to start questioning how reliable that market will remain as governments issue ever more debt at increasingly expensive interest rates."

Chuck Again.... Pretty god explanation of why Gold remains above $4,000 with bond yields going hog-wild upward... 

Market Prices 10/5/2026: American Style: A$ 6956, kiwi .5593, C$ .7013, euro 1.1212, sterling 1.3223, Swiss $1.2049, European Style: rand 16.6297, krone 9.49452, Sek 10.0235, forint 327.71, zloty 3.9051, koruna 21.7997,  RUB 85.01, yen 158.16, sing 1.2804, HKD 7.8474, INR 96,29, China 6.7064, peso 18.14, BRL 5.2123, BBDXY 1,223, Dollar Index 102.26, Oil $90.93, 10-year 5.27%, Silver $61.95, Platinum $1,736.00, Palladium $1,235.00, Copper $6.61, and Gold... $4,162.

That's it for today... I did get this in for you ahead of my getting ready for lunch with my classmates... How about those Tigers? My beloved Missouri Tigers beat Florida at MU's homecoming, and the Gators from Florida were #8 in the country! I was ecstatic! Here I was in my black and Gold all by myself hootin' and hollerin' for the Tigers and playing their fight song on my phone every time they scored. It was a good day... The Great Rev. Al Green takes us to the finish line this morning with his great song: let's Stay Together... I hope you have a Marvelous Monday today and Please Be Good To Yourself!