The Dollar bugs and bond boys are grasping at straws

• Currencies & Metals rally on Wednesday, and in the overnight markets.

• The BoJ gets Jay Powell on the phone.

Good Day... And a Tub Thumpin' Thursday to one and all! Well, it wasn't a good night for St. Louis teams, with the City Team losing its game 1-0, and my beloved Cardinals losing their final game with the Angels... I went to the City game last night with a lovely young lady that was my date! Daughter in-law (I hate using that term) Rachel went with me to the game! Grandson Braden said to her when we returned home, that she saw a loser and it was her fault! Braden can be a little tough to please at times! The band, Missouri, greets me this morning with their song: Movin' On.

Well, the start of the Datapalooza hasn't been kind to the dollar bugs. First, we had PPI rising in April, and then yesterday, Retail Sales weakened quite a bit in April from March, and the STUPID CPI softened just a we bit in April from March, thus leading the markets to think that the Rate Cut is on for June.

The dollar bugs and bond boys are grasping at straws here, as the slightest of softening in the STUPID CPI caused these folks to lose their minds... They think that this report will compel the Fed Heads to cut rates next month... Maybe they will cut, and maybe they won't cut, wouldn't it be prudent to wait until the deed is either done or not done? That's just me thinking aloud.

The dollar lost 9 index points in the BBDXY yesterday... Is this the beginning of a long period of dollar weakness? Only the Shadow Knows that one folks, as there's been so many false dawns in the past few years that I'm leery of going out on a limb here.

The euro ran through the 1.08 handle yesterday, and finished the day within spittin' distance of the 1.09 handle! And the rest of the currencies began to get out of their respective sick beds. So... What's gonna be, Fed Heads? A rate cut, even though inflation is still well above your 2% target rate, to save the stock market? Or... will you once again disappoint the markets?

The price of Oil remained in the $78 handle, while the bond buying went into overdrive after the STUPID CPI print yesterday, and the 10-year's closed the day yesterday, with a 4.34% yield.

In the overnight markets last night... The dollar did not lose any addition ground, nor did it gain any ground.. The dollar bugs must me reeling this morning, after losing 9 index points in the BBDXY yesterday. The news articles are all about how the dollar is getting sold because that 10-year's yield is falling... Shoot Rudy, even the beleaguered Japanese yen and its traders are pointing to the 10-year's yield for their rally.

The metals are all higher in price this morning, with Gold out in front, gaining $20 to start the day, and Silver gaining 39-cents. The other metals including Copper are gaining this morning too... The price of Oil remained in the $78 handle overnight, and the 10-year's yield remained at 4.34% in the overnight trading.  

Speaking of the Japanese yen... I read a report on Bloomberg.com this morning that talked about the Bank of Japan's next round of intervention for the yen would involve U.S. Treasuries.

So, here's the phone call from the Bank of Japan to the Jay Powell at the Fed/ Cabal/ Cartel... Ring, ring, Hello is anyone there? Yes, I'm here it's Jay Powell, and who's this? C'mon Jay, you can't tell who it is? It's the BOJ, and we have a proposal for you... See, we've been intervening in yen trying to keep it from falling off a cliff, and it occurred to us that we have this Treasure Chest full of Treasuries that we could use to sell and the corresponding dollar in favor of the yen... So, what do you say about that? Well, I, Jay Powell, wouldn't like that, because we're doing all sorts of things to get yields down, and that selling would push yields higher... So, please don't resort to that!  Hmm... Well, you're not doing anything to help us, so we're going to help ourselves... Good day Jay, and have a fat chance of keeping yields down... (of course that's my rendition of a potential phone call, this did not really happen).

Well, if this isn't the proof in the pudding... When current president of Argentina Javier Milei took over the country's lead post, inflation in Argentina had vaulted to 25.5%... Yesterday, just 5 months later, Argentina's inflation has dropped to 8.8%... Single digits! Milei’s economic policies and “zero deficit” goals have resulted in consecutive monthly drops in inflation. Inflation fell to 20.6 percent in January, 13.2 percent in February, and 11 percent in March.

See what happens when you take a chainsaw to Gov't waste? I sure wish one our candidates for President would take up this thought, and implement it... Probably won't get them elected, but at least, someone would be pointing out the cuts in Gov't that we need to make, pronto! 

So... get this... don't walk away or skip ahead, you need to pay attention here: The Fed Heads are considering moving the goal posts for inflation, and raising their target rate from 2% to 4%... Wait, What? Shoot Rudy, even that goofus, Paul Krugman is touting a higher target rate, here's the skinny, "Biden’s head economic cheerleader Paul Krugman is already laying the groundwork for a revision of the Fed’s 2% inflation target:

After all, 2 percent is a rather arbitrary number (blame New Zealand!). Is it worth risking a recession to squeeze out those last few decimal points?"

Ahem... Mr. Krugman... I beg to differ with you... Booms need busts, it's how economies have worked for over 200 years, well, until the Fed Heads thought they knew better that is...  without a recession, you don't clean out the excesses of the boom... I could go on, but I doubt Mr. Krugman is listening...  

Any way you look at any kind of increase of the Fed Heads' target rate for inflation, is good for Gold... Because if The Fed Heads Do raise their target rate, they'll be doing so just so their rate cuts that they want to make, don't make them look foolish... But to me... raising the target rate does nothing but make them look foolish... 

The U.S. Data Cupboard had the aforementioned Retail Sales for April yesterday, and they were just flat 0.0% VS March... March's print was downward revised to 3.6%... So that was a huge fall in Retail Sales I would say... This play into the FWIW article today...  The other piece of data yesterday was the STUPID CPI, which was 3.4% yoy, VS 3.5% in March... The Empire State Manufacturing Index was a negative -15... Another print that leads the markets to believe they need a rate cut... 

Today's Data Cupboard has the Weekly Initial Jobless Claims, which shocked the markets last week... In addition, we'll also see the color of Industrial production and Capacity Utilization for April today... 

So... I have a question for the Gov't and the markets... The Gov't keeps repeating how strong the U.S. economy is, but economic print after economic print says the opposite, which is what the markets want, so, who's going to win this debate? The Gov't or the markets? 

I've always told you that the markets have deeper pockets than the Gov't... so that pretty much tells you who I'm taking in the dogfight! 

Here's your snippet: "The Federal Reserve Bank of New York just dropped a bombshell: US household debt has skyrocketed to an eye-watering $17.7 trillion. Brace yourselves, folks, because the financial storm is here, and it’s hitting hard!

First off, let’s talk numbers. That $17.7 trillion represents a jaw-dropping $184 billion increase, or 1.1%, from the previous quarter. We’re not just talking about a slight uptick here; we’re witnessing a financial tsunami sweeping across the nation.

Now, let’s delve into the nitty-gritty. Inflation is running rampant, driving up the prices of essentials like food and rent. American families are feeling the pinch, with household budgets stretched thinner than ever. It’s a vicious cycle: higher prices mean more borrowing on credit cards just to make ends meet.

See also American Dream Under Siege: Median Mortgage Hits Record High, Renters Left Reeling in Bidenomics Fallout!

And let’s not forget the pandemic elephant in the room. Since COVID-19 reared its ugly head, consumers have piled on a staggering $3.4 trillion in debt. That’s like pouring gasoline on a raging fire, folks. With interest rates soaring, it’s a debt trap that’s becoming harder to escape.

But wait, it gets worse. Instead of facing the music for their risky lending practices, banks are begging the #FED for a bailout. They want interest rates slashed, giving borrowers a lifeline to keep drowning in debt. But who’s left holding the bag? You guessed it – hardworking Americans, through inflation and potentially higher taxes."

Chuck again... nothing like some nice comforting news to lead us into the weekend, eh? NOT!  I told you a few months ago that credit card debt was rising and it was going to end up in tears... Well, get those handkerchiefs out because we're going to need them! And now I read this morning, that the delinquencies on Credit Card debt are rising quickly... Uh-oh! 

Market Prices 5/16/2024: American Style: A$ .6674, kiwi .6109, C$ .7336, euro 1.0870, sterling 1.2671, Swiss $1.1076, European Style: rand 18.2253, krone 10.7004, SEK 10.6862, forint 354.95, zloty 3.9218, koruna 22.7048, RUB 90.84, yen 154.71, sing 1.3448, HKD 7.8050, INR 83.49, China 7.2166, peso 16.72, BRL 5.1367, BBDXY 1,244.73, Dollar Index 104.41, Oil $78.39, 10-year 4.34%, Silver $29.17 Platinum $1,073.00, Palladium $1,012.00, Copper $4.93, and Gold... $2,382.75.

That's it for today... Well, while at the game last night, I got a text from my beautiful bride that our darling daughter, Dawn, was in the hospital... When I got home from the game she was still there, with no answers yet... I waited as long as I could for Kathy to come home to give me an update, but I eventually fell asleep... So, she must have gotten home quite late into the night and I don't want to wake her... Fingers crossed that she's Ok... I'm going to lunch tomorrow with former colleagues, Steve, and Dean! It'll be fun to catch up... R.E.M. take us to the finish line today with their hit song: Losing My Religion... That's what the fans at City Park were doing last night with the referee's calls... I hope you have a Tub Thumpin' Thursday today, and please Be Good To Yourself!