Trading with point and figure

dax into th eopen
tad bullish

24g4npt.png
 
rez at 12500 and 12520 .ish/prev supp..if 12479 area breaks
decent horizontal supp down to 12300
 
Last edited:
ditto on ftse
7385-7400 prev horizontal supp area

7350-7356 supp area...was prev rez
if 7420 breaks ..then 7428 rez
 
- Heavily front loaded data run leaves markets to digest Japan Orders,
China inflation, German Trade and UK surveys; fractious G20 meeting
offers little for markets to react to

- Japan Orders confound better survey data, Abe govt unpopularity
acting as a restraint?

- Stable China inflation readings, but risks still skewed to the
downside

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

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

A somewhat lopsided day in terms of the statistical schedule, with all the key data points coming during the overnight session via way of Japan Machinery Orders, Chinese inflation and German Trade, as the all too obvious divisions at the G20 meeting are digested, though with few if any immediate market implications. Of the overnight items, the UK Q2 Visa Consumer Spending at -0.3% y/y underscores that the hoped for pick-up in Q2 GDP is unlikely to materialize, particularly given the poor Industrial Production, Construction Output and Trade data published last Friday; it also implies some downside risks for tonight's BRC Retail Sales, which are seen rebounding very modestly to 0.5% y/y after falling 0.4% y/y in May. Chinese inflation data were broadly in line with expectations with CPI unchanged at 1.5% y/y, continuing to be restrained by falling food prices (-1.2% y/y), while PPI was also unchanged at a still lofty 5.5% y/y as some raw materials prices recovered, though this appears unlikely to be a durable trend, given restraints on credit and the clampdown on leverage, as well as ongoing over-capacity problems in a number of sectors. Japanese Private Machinery Orders proved to be extremely disappointing, notwithstanding the inherent volatility of this series, posting a 3.6% m/m fall against a forecast of +1.7%, with the y/y rate drifting down to a lowly 0.6% from April's 2.7%, in turn prompting the govt to downgrade its orders outlook to 'stalling'. Recent survey data would suggest a rebound should be seen in coming months. However with the Keidanren (business federation) openly fretting about the poor approvals ratings for the Abe government, it remains to be seen whether that survey optimism is sustained, let alone translates into stronger demand. Last but not least German Trade data proved to be much stronger than expected with Exports rising 1.2% m/m, while Import rose 1.1% m/m against forecasts of 0.3% m/m, and per se echoing the strong foreign orders seen last week, though this will inevitably only serve to exacerbate tensions with the US, and some European countries.

RECAP - The Week Ahead - Bullet point highlights: 10 to 14 July

- The 'dog days of summer' would appear to be gaining traction early this year, though thins weeks' data and events schedule has plenty of highlights, with the added bonus of major financial (JPM, Citi) kicking off the US Q2 earnings season

- Headline billing likely goes to Yellen's two days of testimony to Congressional committees on the Fed's semi-annual monetary policy report adn the Fed's Beige Book, though vying for contention will be an expected 25 bps rate hike to 0.7% in Canada, which would make the BoC the first of the G7 / EU central banks to 'follow' the Fed in 'tightening policy'. Though 'glacially and gradually stepping away' from unprecedented and extreme levels of monetary accommodation would seem to be a better description - though not for the plague of hyperbole locusts who write the often shrill and melodramatic headlines.

- Statistically, the USA, China and the UK dominate the schedule: the US sees PPI, CPI, Retail Sales, Industrial Production and preliminary Michigan Sentiment; China has CPI, PPI, Trade and its mass of monetary aggregates, while the UK looks above all to Average Weekly Earnings for one of the key signals on the August MPC decision (CPI due next week 18 July), with Unemployment, BRC Retail Sales and RICS House Prices also on tap.

- Govt bond sales see the US auction $56 Bln total of 3, 10 & 30-yr, the UK sees a syndicated reopening of the 2056 Index-Linked Gilt, Germany launches its new 10-yr benchmark with an EUR 5.0 Bln total, while Italy and Ireland announce details of their Thursday auctions on Monday.

- In the energy space, the IEA's monthly oil market report with updated output and demand projections likely to be the focal point as oil's latest rally fizzled out quickly, in response to US Output projections.


from Marc Ostwald
 
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