Your Economy (No Politics)

[Bullwinkle]

Sneak Peak At Events In The Month Ahead


POTPOURRI
WrapUp by Rob Kirby
02.27.2006


With this being the last Market WrapUp I write before we enter the month of March – I felt it appropriate to take a look ahead, because the month of March has the potential to be one of the most memorable [for a host of reasons] on record. In the words of Michel de Chabert-Ostland, chief trader at Royal Palm Trading – there’s a convergence of some very important events occurring this month:

March 6: IAEA meeting on nuclear issue with Iran. Could precipitate a move to the UN Security Council for sanctions. Iran has warned, for some time, that sanctions could have adverse effect on the world community ( read withdrawal of oil for exports ).

March 8: OPEC meeting. Venezuela and others are pushing for a cut in production by OPEC.

March 9: US Trade Deficit

March 15: TIC report ( net purchases of US assets by foreigners ) for January. The previous one fell way short of financing our trade deficit. Another poor report on this front could well put the US dollar under considerable pressure.

March 20: Iran to open a new oil bourse ( exchange ) on which countries all over the world can buy and sell oil and gas in Euros. It also establishes a new oil " marker " based on Iranian crude and denominated in Euros, in open rivalry to the existing West Texas, Norway Brent and UAE Dubai markers, all of which are calculated in US dollars. It should be obvious that if the bourse opens as planned that it would reduce considerably, over time, the need for dollars by all the Eurozone countries. Russia has already moved in this direction.

March 24: M3 no longer being reported by the Fed - we all know why.

March 27/28: Fed meeting on interest rates. Markets presently give it almost a 100% probability of an increase of 25 basis point on Fed Funds to 4.75% - we'll see what happens between now and then. I predict that if we go to 4.75%, that will be the last rate hike for this cycle.

Unknown date: From the reports I have received, it seems that there is a good chance that the SEC will decide on the silver ETF in March. I believe it will be a huge success whenever it is launched.

In addition to the above, anecdotal evidence suggests that the Chinese yuan is set to rise at a faster pace against the dollar. This past Friday it reached a recent high of 8.043 yuan/dollar. This would be very gold and silver friendly.

Then, we have Iraq in total chaos with the American forces as bystanders ( taking casualties every day ), completely unable to control the direction of events unfolding there. When you can no longer shape the political denouement, I would say that you have lost control ( not that we ever had it ).

The attempted recent attack on oil installations in Abqaiq, Saudi Arabia is certainly a precursor of more to come.


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