Thursday September 14, 2006 - 11:07:10 GMT
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Black Swan Capital - www.blackswantrading.com
A bit quiet
â€˘ World economic growth will be higher than previously thought at 5.1% in 2006 and 4.9% in 2007, the International Monetary Fund has said. (BBC)
â€˘ Producers Move to Debunk 'Peak Oil' Leading players in the petroleum industry, including Saudi Arabia and Exxon Mobil Corp., are aggressively arguing that plenty of crude oil remains for world consumption, in an effort to counter critics who contend crude output is about to plateau. (WSJ)
â€˘ Key Reports (WSJ):
8:30a.m. Initial Jobless Claims.For Sept 9 Wk. Previous: -9K.
8:30a.m. Aug Import Prices. Previous: +0.9%
8:30a.m. Aug Retail & Food Sales. Previous: +1.4%.
8:30a.m. Aug Retail & Food Sales, Excluding Autos. Previous: +1.0%
10:00a.m. July Business Inventories. Previous: +0.8%.
10:00a.m. DJ-BTMU Business Barometer. For Sep 2 Wk. Previous: +0.3%.
â€śIt is a mistake to try to look too far ahead. The chain of destiny can only be grasped one link at a time.â€ť
FX Trading - A bit quiet out there
As you well know, it has been very quiet in the spot world of late. In fact, one could say for months, if taking a slightly broader view, and using euro-$ as an example:
What breaks us out? Or at least, what is it that might give us some direction? We think itâ€™s about growth at this stage. Sure, a surprise hike from the Fed might just bolster the dollar. But the Fed would only surprise with a hike if it is surprised by strong US growth, we think. And that prospect is still in play. For weâ€™ve seen Mr. US Consumer pronounced dead on arrival many times before. And almost every time he has bounded back to life.
Weâ€™d buy into any of the scenarios below as it impacts the US dollar, weâ€™re just not sure which, thatâ€™s all:
1) US dollar slow decline: Slow US growth and moderate global growth (The IMF indicated global growth is still vibrant in a story this morning)
2) US dollar rallies sharply: US fund managers running home to hide: A major US slowdown or recession, sparking a real hit to global growth, Japan and European growth disappoint, China slows a bit
3) US dollar gradual rally: The US consumer surprises, the housing market does not feed into the economy as much as expected, inflation indices rise, US growth forecasts are raised, the Fed is back in play
4) US dollar sharp decline: The US economy craters, and the rest of the world muddles through with moderate to slow growth.
â€¦and given the trading we are seeing, it seems much of the market is in the same boat about which scenario to buy into.
The G-7 meeting is Saturday in Singapore. Maybe a surprise flows from there. China â€śrevaluationâ€ť is on the docket again. Japan is sure it doesnâ€™t want to talk about â€śglobal rebalancingâ€™ as that might lead to a stronger yen. Who knows, maybe we get something from our finance ministers for a change. And we have August import prices due to be released in the US today. Stay tuned. As we know, sideways ranging markets build energy.
Jack Crooks, Black Swan Capital Black Swan Subscription-based Service
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