Trading with point and figure

- Digesting FOMC minutes, German Orders, Oz Trade; awaiting ECB minutes,
and rash of US data: ADP, Goods Trade Balance, Claims and Services PMIs

- FOMC minutes: sub-par inflation concerns limited to small group; balance
sheet reduction timetable and easing of financial conditions discussions
of rather more interest

- US ADP: May divergence with Payrolls notwithstanding, anecdotal evidence
offers no grounds to suggest downside risk to forecast

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

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

A rather busier day in terms of the data and events calendar, even if market activity shows all the signs of entering the summer doldrums. On the to be digested menu are last night's FOMC minutes, which signalled that while there is emerging dissent on the rate trajectory, primarily due to the recent slippage in inflation indicators, the dissenters are in a very clear minority, and the majority looks to be intent on pursuing accommodation reduction as outlined. It was above all notable that there were some (apparently including Yellen) who wanted to announce the timetable for commencing balance sheet reduction at the June meeting, and this now appears to be a near certainty for the September meeting. As previously suggested, the FOMC is now clearly very concerned about market valuation levels, with a number of members concerned and surprised that financial market conditions have eased rather than tightened in response to the latest Fed rate hikes. The Fed's semi-annual report to Congress (due Friday 16.00 BST) and Yellen's testimony to Congress next week will be closely watched for further clues.

Of the overnight data, the sharp rebound in Australian Exports (9% m/m) underlines that the smaller than expected Australian Trade Balance in May was almost exclusively due to weather disruption to coal and LNG shipments, and suggests that Net Exports should make a solid contribution to Q2 GDP. German Factory Orders missed forecasts once again at +1.0% m/m vs. a forecast 1.9% and a fall of 2.2% in April, but the detail highlighted that the miss was down to 1.9% m/m fall in Domestic Orders, effectively a consolidation after Q1 and Q4 2016 strength, while encouragingly Eurozone (+1.7%) and Non-Eurozone (4.0%) Orders were robust, above all in Capital Goods, which posted a headline gain of 2.6%. Optimism on the French economy at official levels continues to build, with Bank of France governor Villeroy de Galhau bumping up the BoF 2017 GDP forecast to 1.6%, having as recently as June upped its forecast to 1.4%; the key question remains whether Macron can actually deliver on reforms and maintain the current momentum.

Ahead lie the ECB minutes, which may offer some clues as to the council's debate on how and when to taper its QE programme to a conclusion, and the significance or lack thereof of that shift from Draghi with regards to deflationary forces being replaced by deflationary forces. That said, the ECB's account of its meeting typically elicits a rather muted response, particularly by comparison with FOMC minutes. There are also some Fed and ECB speakers, along with multi-maturity govt bond auctions in France and Spain, but it is the run of US data which will likely attract most attention, barring any further geo-political events. developments. Ahead of the official Payrolls data tomorrow, the consensus today's ADP Private Employment is a rather typical and agnostic +185K, which follows last month's +253K that was way out of line with the 147K Payrolls gain. Weekly jobless claims (also due and expected to remain very low at 243K), the NFIB Small Business Optimism survey and other surveys and anecdotal evidence offer few grounds to expect a downside surprise, indeed the NFIB survey saw a pick-up in hiring intentions to the best levels of the year, though also noted it is becoming very difficult to fill positions. The US Goods Trade Balance is seen improving modestly to $-46.3 Bln vs. April's $-47.6 Bln, which implies net exports are likely to be a marginal drag on Q2 GDP. Last but not last the contrast between the lacklustre Markit PMIs (very emphatic in the manufacturing sector) and buoyant ISM readings is likely to be re-emphasized, with the final Markit Services seen unrevised at 53.0, while the Non-manufacturing ISM is expected to dip fractionally to a very solid 56.5 from 56.9, maintaining what has been a very tight range of readings since November 2016. The usual caveats about not over-interpreting the Employment sub-index of the latter in terms of pointers for tomorrow's Payrolls apply, given a distinct lack of correlation in month to month terms.

from Marc Ostwald
 
DAX staying in its tight range, need a breakout one way or another.

208b8ky.jpg
 
that 12466 area got hit at 9.15am this morning
got rejected...big time


it was there in front of me and i missed it...lol

chart was posted yesterday
 
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