Trading with point and figure

Inzimam
traget would be 12300 and poss 12313..ish
supports ...as we marked 12250 and we saw 12280 area which was a rez yesterday
that is what we are inteersted in
 
12280 held and we pumped to our 12313 area
then Moneylenders 12300 held and we retest our 12313 rez area
 
- Digesting Australian CPI and 'dovish' RBA comments, awaiting UK Q2 GDP,
FOMC statement, US New Home Sales, Brazil rate cut, rash of US and
European corporate earnings and EIA oil inventories

- UK Q2 GDP: marginal acceleration from weak Q1 heavily contingent on
Services and Govt spending, some downside risks

- Fed likely to stick to inflation wording, may signal balance sheet
reduction announcement likely in September

- Charts: CRB, WTI Oil and Copper futures

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

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

or all that the day's schedule appears to be quite modest, it has a number of major items to digest, kicking off with the weaker than expected Australian CPI and comments from RBA governor Lowe that reinforce the view that the RBA is still a long way from contemplating tightening monetary policy, as BoJ's Nakaso like so many other BoJ speakers of late offered another 'putting lipstick on a pig' defence of the BoJ's failure to get anywhere close to its 2.0% core CPI target. Ahead lie the advance estimate of UK Q2 GDP accompanied by the latest Index of Services, more national confidence surveys in the Euro area, US New Home Sales, another rash of US and European corporate earnings, an expected 100 bps cut to 9.25% in Brazil, and of course the FOMC meeting. Oil markets will be watching out for the EIA crude inventories report, after the API report saw a much bigger than expected 10 Mln drawdown (vs. expected -2.6 Mln); the question being whether this was in effect 'catching up' with a much larger EIA crude drawdown last week. US political developments continue to cast a shadow, above all over the USD, with Trump Jr. and Manafort set to testify today before the Senate Judiciary Committee.

** U.K. - Q2 prov. GDP **
- The consensus looks for a very slight pick-up in Q2 GDP to 0.3% q/q from Q1's 0.2% q/q, in line with the NIESR's estimate, with the y/y seen falling to 1.7% from 2.0%. In contrast to 2016 this would confirm that the weakness in Q1 was not a seasonal blip, but rather signalled a clear loss of momentum to a rather more sluggish pace. It will require the Mar-May Index Of Services to meet expectations to accelerate as expected to 0.4% q/q from 0.2%, and a contribution from Govt Spending to reach the consensus. This is in so far as Personal Consumption will again be very weak, with the ONS indicating in the Retail Sales report that this will contribute just 0.09 ppt to GDP, with the combined headwinds of negative real wage growth, the pick-up in inflation and the unsustainable pace of Consumer Credit growth weighing heavily. April and May data for Industrial Production suggest Manufacturing will also make little or no contribution, while monthly Construction Output readings imply that sector will deduct from GDP. While Business Investment has held up relatively well over the past year, the uncertainties related to the Brexit negotiations are clearly acting as a significant restraint. Overall the UK economy looks it is moving to the bottom of the G7 growth league table, though it should be added that it is currently not headed for recession.

** U.S.A. - FOMC meeting **
- The Fed meeting can hardly be described as being eagerly anticipated, with few changes expected to the statement, though any changes to the wording on the inflation outlook would inevitably prove highly sensitive, however the statement will likely stick to the view that the current dip is transitory, and that the 'Committee is monitoring inflation developments closely' while it sees 'Near-term risks to the economic outlook' as 'roughly balanced'. This is a non-press conference meeting, and as such changes to the statement will likely be kept to a minimum. However the statement may well alter "Committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated", with 'soon' replacing 'this year', effectively opening the way to the September meeting announcing balance sheet reduction will commence in October. It is worth reiterating that the Fed is clearly signalling a different set of contingencies for rate hikes (very much inflation and to some extent labour market dependent), and balance sheet reduction (growth dependent), a point which seems to be largely absent from market chatter on the rate outlook. (Recap June FOMC statement: https://www.federalreserve.gov/newsevents/pressreleases/monetary20170614a.htm )

from Marc Ostwald
 
I would like it go back to 12270 area or even 250, plenty of support down there.

Breakfast now, then some Tandem repairs ready for the sun this afternoon.
 
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