Naysayers beware, as we give a hearty kudos to Mr. Lawrence Kudlow. Featured at the 2006 FXCM Expo, Mr. Kudlows comments reflected a bullish economy, one that has in fact produced 5.3 million jobs over the span of 33 months and continues to churn ahead at an average of 4 percent annually
Even more dollar bullish, was the fact that the host of CNBCs Kudlow & Company added that wage earnings were continuing to grow as companies are able to accommodate to higher labor costs, in fact creating a win-win for capital and labor, an unusually virtuous circumstance. This means that with loftier levels of wages or earnings per individual, consumers remain willing to spend at a healthy rate bolstering inflationary pressures higher in days to come. All of this continues to be likely even as we exclude the negative effects of rising gasoline and energy prices. The notion is contrary to the most recent non-farm payrolls report which printed a 75,000 addition versus expectations of at least a 170,000 uptick by consensus experts with greenback bearish pundits considering a comparative slowdown in overall individual consumer spending. The disappointing data, released the Friday prior to the dead on prediction, continued to shift dollar sentiment towards a bearish bias with market participants betting with the utmost confidence on a more dovish monetary policy as suggestions were for a weakening economy. Sell the Dollar! Futures traders even underpinned the notion dropping the probability of a rate hike in June to a paltry 40 percent chance adding to overriding speculation that interest rates were going to be at standstill resulting in further weakness in the American currency. Now, a day after Chairman Bernankes hawkish comments on Monday, anti-dollar bulls are scratching their heads at the proximity and accuracy of such disregarded analysis. To a crowd of 500 plus, Mr. Kudlow accurately and without a doubt professed a stronger dollar outlook as evidence was clear enough that the economy has never been better and that policy makers would remain steadfast in their quest to keep inflation under control. Mentioned on a Sunday, the final day of the first annual FXCM Traders Expo, the comments will likely reverberate to both the attendee and even more so for the non-attendee as it was a blatant recommendation that would have allowed the smallest of retail traders the luxury of capturing a 150 pip free fall in the EURUSD major following the almost uncanny duplication of Kudlows comments by Chairman Bernanke on Monday. Now, it seems, the market is once again turning their opinion as it becomes increasingly popular to buy dollars. In the end, Mr. Kudlow certainly showed how half full the cup really is to anyone wanting to keep one ear on the market and one on the expos forum.
