Dentalfloss
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buyers could appear at 12270
Trading with point and figure
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Dentalfloss
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Post ECB thoughts - 'ECB obfuscation highlights council divisions, and an uncomfortable short-termism'
a) The statement was again a case of cut and paste the previous one and update with today's date, which in itself offered a strong signal on the obfuscation that was going to be offered at the press conference.
b) Forecast updates - for choice the changes were even more marginal, outside of 2017 GDP, than had been expected:
2017 2018 2019
GDP 2.2% (1.9%) 1.8% (unch) 1.7% (unch)
CPI 1.5% (unch) 1.2% (1.3%) 1.5% (1.6%)
Indeed the minimal tweaks were likely tailored to accompany the no signal at today's meeting on 2018 policy settings message, particularly front loading the upgraded growth forecast into 2017. The 2018 GDP forecast does look to be too low, and the 2018 CPI forecast clearly allowing them to push back on outlining their policy plans for 2018.
c) Draghi has rarely been more meticulous in ensuring that he did not leave the council 'hostage to fortune' by dint of what he said, even when talking about inflation. As per "There was a broad dissatisfaction (on the Council) tempered by the confidence that inflation will eventually converge to our objective. And this confidence ... is based on the good conditions, the good and improving and broadening conditions of the economy." Even the clues on the policy discussion timetable were couched in caution "probably the bulk of these decisions will be taken in October", but adding that they could be deferred. The fact that Draghi also noted that the ECB expects CPI to drop back going into year-end offers a strong hint that the extent of that setback will likely be a key determinant of the council taper decision. This is, in truth, a rather abject bit of myopic short-termism.
d) As for the impact of the EUR, he was keen to re-emphasize that it was not the level of the EUR that was a problem, but its impact on the inflation outlook. He even had the gall to suggest that a stronger EUR would likely impact exports, though the actual evidence is largely non-existent, though the downward drag on inflation is factual. He did at least concede there is considerable disagreement on the council about the economic impact of a stronger EUR: "Opinions diverge, but there was by and large broad consensus on the fact ... that the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability." The use of the word 'volatility' brought to mind a conversation that I had in 1990 with the BoE's Chief FX dealer about the post 1985 Plaza accord messages from G7 officials . Those with longer memories will recall that whenever the USD threatened to start to recover some of its steep declines, one or other G7 central banker or finance minister would promptly suggest that the G7 were concerned about 'disorderly markets'. As the BoE chief dealer, who had been seconded to the NY Fed at the time of the Plaza accord, this actually meant 'get off the bid side on the USD'!
e) As for "bond scarcity", Draghi was again to opine that the ECB was not having any problems with this, and then offered the rather self-contradictory: 'a deviation from the capital key is a deviation', but they are 'temporary'. In other words, the ECB will utilize every bit of flexibility that it can carve out, as long as it does not result in strife on the council.
f) As for the relatively sharp jump in the EUR from the start of the press conference, this probably owed as much to the much higher than expected US Initial Claims (298K vs. forecast 245K, prior 236K), which not only highlighted a very poor forecast, but also the inability of algos to differentiate trend changes from Hurricane Harvey related distortions (Ed: sort under "it was the algos, stupid".... or should that be "it was the stupid algos"?). The latter is also a reminder that the EUR/USD cross rate is not just a function of what suits the ECB, but also the cloud over the USD due to US politics, and Fed and market doubts on the inflation, and should yesterday's Democrat delivered short-term extension of the debt ceiling and approval of initial funding to help those impacted by the devastation of Hurricane Harvey be a signal that there is some loosening of Congressional impasses and gridlock, then EUR/USD could easily turn on sixpence. It has to be added that as much as the initial jump in EUR/USD was quite sharp, it has thus far failed to breach the previous high (see chart).
g) Overall today's meeting confirms the ECB's asymmetric policy bias, as well as increasing council tensions, while still imparting a degree of fluidity on the policy outlook. It also underlines the importance of keeping an eye on the US/Bund 10-yr yield spread, which has trended sideways around 175 bps since July, after tightening from 235 bps at the end of 2016. (see chart).
------------------------------
Marc Ostwald
Global Strategist
ADM Investor Services International Ltd
a) The statement was again a case of cut and paste the previous one and update with today's date, which in itself offered a strong signal on the obfuscation that was going to be offered at the press conference.
b) Forecast updates - for choice the changes were even more marginal, outside of 2017 GDP, than had been expected:
2017 2018 2019
GDP 2.2% (1.9%) 1.8% (unch) 1.7% (unch)
CPI 1.5% (unch) 1.2% (1.3%) 1.5% (1.6%)
Indeed the minimal tweaks were likely tailored to accompany the no signal at today's meeting on 2018 policy settings message, particularly front loading the upgraded growth forecast into 2017. The 2018 GDP forecast does look to be too low, and the 2018 CPI forecast clearly allowing them to push back on outlining their policy plans for 2018.
c) Draghi has rarely been more meticulous in ensuring that he did not leave the council 'hostage to fortune' by dint of what he said, even when talking about inflation. As per "There was a broad dissatisfaction (on the Council) tempered by the confidence that inflation will eventually converge to our objective. And this confidence ... is based on the good conditions, the good and improving and broadening conditions of the economy." Even the clues on the policy discussion timetable were couched in caution "probably the bulk of these decisions will be taken in October", but adding that they could be deferred. The fact that Draghi also noted that the ECB expects CPI to drop back going into year-end offers a strong hint that the extent of that setback will likely be a key determinant of the council taper decision. This is, in truth, a rather abject bit of myopic short-termism.
d) As for the impact of the EUR, he was keen to re-emphasize that it was not the level of the EUR that was a problem, but its impact on the inflation outlook. He even had the gall to suggest that a stronger EUR would likely impact exports, though the actual evidence is largely non-existent, though the downward drag on inflation is factual. He did at least concede there is considerable disagreement on the council about the economic impact of a stronger EUR: "Opinions diverge, but there was by and large broad consensus on the fact ... that the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability." The use of the word 'volatility' brought to mind a conversation that I had in 1990 with the BoE's Chief FX dealer about the post 1985 Plaza accord messages from G7 officials . Those with longer memories will recall that whenever the USD threatened to start to recover some of its steep declines, one or other G7 central banker or finance minister would promptly suggest that the G7 were concerned about 'disorderly markets'. As the BoE chief dealer, who had been seconded to the NY Fed at the time of the Plaza accord, this actually meant 'get off the bid side on the USD'!
e) As for "bond scarcity", Draghi was again to opine that the ECB was not having any problems with this, and then offered the rather self-contradictory: 'a deviation from the capital key is a deviation', but they are 'temporary'. In other words, the ECB will utilize every bit of flexibility that it can carve out, as long as it does not result in strife on the council.
f) As for the relatively sharp jump in the EUR from the start of the press conference, this probably owed as much to the much higher than expected US Initial Claims (298K vs. forecast 245K, prior 236K), which not only highlighted a very poor forecast, but also the inability of algos to differentiate trend changes from Hurricane Harvey related distortions (Ed: sort under "it was the algos, stupid".... or should that be "it was the stupid algos"?). The latter is also a reminder that the EUR/USD cross rate is not just a function of what suits the ECB, but also the cloud over the USD due to US politics, and Fed and market doubts on the inflation, and should yesterday's Democrat delivered short-term extension of the debt ceiling and approval of initial funding to help those impacted by the devastation of Hurricane Harvey be a signal that there is some loosening of Congressional impasses and gridlock, then EUR/USD could easily turn on sixpence. It has to be added that as much as the initial jump in EUR/USD was quite sharp, it has thus far failed to breach the previous high (see chart).
g) Overall today's meeting confirms the ECB's asymmetric policy bias, as well as increasing council tensions, while still imparting a degree of fluidity on the policy outlook. It also underlines the importance of keeping an eye on the US/Bund 10-yr yield spread, which has trended sideways around 175 bps since July, after tightening from 235 bps at the end of 2016. (see chart).
------------------------------
Marc Ostwald
Global Strategist
ADM Investor Services International Ltd
Dentalfloss
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dow coiling...ready for a pop
Dentalfloss
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21785 for A P/D
Dentalfloss
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21800 looming
Dentalfloss
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or a fake
Dentalfloss
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bounce was from 12283...we had 12270 marked
dont call levels
dont call levels
Dentalfloss
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12340 prev supp on 1 min bars
Dentalfloss
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whammmm.....stops tightened
Dentalfloss
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stopped out on dow...excellent run
Dentalfloss
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cable in a pivot area
Dentalfloss
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yes sir
Dentalfloss
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21820 dump
luvin it
luvin it
Dentalfloss
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Moneylender
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DAX close, now Inzimam can compare!
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They look pretty close to me!
:smart::smart:
:smart::smart:
Dentalfloss
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mornin folks
Dentalfloss
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some Crypto to liven up the day
