Trading with point and figure

- Minimalist macro schedule likely to focus on digesting UK BRC Sales,
Oz Current A/c and RBA decision, awaiting RBI, South Africa GDP, US JOLTS
Job Openings & Business Roundtable Q2 CEO Economic Outlook Survey;
UK election polls and GCC/Qatar tensions the other focal points

- UK BRC Retail Sales highlights underlying trend soft, echoes Services
PMI

- Qatar/GCC: implications and intentions rather less clear than some
may assume

..........................................................................

********************
** EVENTS PREVIEW **
********************

A rather subdued day awaits in terms of data and events, and may well be upstaged by national and/or geo-political news, though even many of these appear to have a very limited shelf life in terms of market reaction. On the "to digest" menu are the as expected no change rate decision and neutral outlook from the RBA along with disappointing Australia Q1 Current Account (implying another weak GDP reading after a strong Q4, due tomorrow) and soft UK BRC Retail Sales, which underline that April's rebound was largely an Easter timing effect, with the underlying trend remaining soft as it was in Q1. The remainder of the day has little more than Q1 GDP from South Africa and US JOLTS Job Openings, while there are govt bond auctions in the UK (5-yr), Germany (10-yr Inflation-Linked) and Austria (6 & 10-yr), as well as this evening's API Oil Inventories report. India's RBI is also expected to hold its official rates, with the focus on whether it tempers its relatively hawkish take on the inflation outlook at its previous meeting, given the disappointing Q1 GDP data, or whether it views the latter as transitory noise due to the impact of Q4's demonetization. Developments in the GCC stand-off with Qatar will need to be watched very closely, given the air, land and sea blockade which has come into force as of this morning, with only Iran and Turkey seemingly willing to relieve the pressure on food supplies which will quickly ensue, given Qatar imports 80% of its food from GCC countries. The question then is what precisely is the US view on this situation, in so far as it has 10,000 military at the (not officially US) air base in Al Udeid. It should also be remembered that Turkey also has a military base in Qatar - details here: http://www.middleeasteye.net/news/turkey-qatar-military-agreement-940298365. The implications for the OPEC/Non-OPEC production deal are less clear. Firstly Qatar is not a swing oil producer, though obviously one of the big three in the LNG market, though the dependence of the northern UAE emirates (to give but one example) on LNG imports from Qatar to fire their power stations suggests a squeeze in that area is unlikely. Secondly it should be remembered that even at the height of the Iran / Iraq war, OPEC continued to meet, so this is likely far less of an existential threat to OPEC than some might deduce. This article is also worth a read as some background on the GCC tensions: http://www.atlanticcouncil.org/blog...ft-with-qatar-play-out-2#.WTW6NOAVysc.twitter

As for the latest UK opinion polls, which continue to show enormous divergence:

- ICM online poll lower youth vote turnout sees Con: 45 Lab: 34 = Landslide
- Survation phone poll high youth turn-out: Con: 41 Lab: 40 = Hung Parliament

It is worth noting that the weather forecast for heavy rain, which may dampen the younger generation's desire to go out and vote. Be that as it may, the likely outcome remains clear as mud.

from Marc Ostwald
 
Ozee now in mega rez
 

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