Trading with point and figure

- Policymakers and politics again likely to rule the roost, despite a
relatively busy run of surveys (Europe/UK) and data (USA); digesting
China Beige Book and Industrial Profits, awaiting Fed speakers, Macron/
Gentiloni meeting, rate decisions in Czech Rep. and NZ; UK and US to
sell debt

- US Durable Goods: aircraft seen pacing headline gain, core measures seen
eking out marginal gain; some scope for hurricane distortions

- US Pending Home Sales: further dip expected, low inventories likely to
act as a continued drag

- China: accelerating Industrial Profits rise offers counterpoint to debt
concerns; Beige Book suggests H2 2017 growth to be better than expected,
but risks accumulating for H1 2018

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

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

As was patently obvious yesterday, it will be the central banker speeches and political headlines that will likely prove to be more sensitive today, than the statistical schedule. The latter is nevertheless plentiful, ranging from the overnight China Industrial Profits and Q3 Beige Book though various national confidence surveys Europe, Eurozone M3 / Private Sector Credit, Italian Orders, UK CBI Retailing survey to US Durable Goods Orders and Pending Home Sales. The very dovish Bullard and Kashkari and the rather hawkish Rosengren are today's Fed speakers, though they will hardly dislodge the firming of December rate hike expectations after Yellen's speech yesterday, and indeed an as resolute signal on rates from NY Fed chief Dudley on Monday. Elsewhere, following on from Macron's EU reform proposals yesterday, his Finance Minister Le Maire will today outline the 2018 French Budget proposals, while Macron meets with Italian PM Gentiloni, with the merger of STX and Fincantieri expected to be finally approved after much wrangling. The latter is a further signal of a necessary consolidation in European heavy industry, as has been seen in the with Alstom Siemens rail merger. It has been a rather painful journey to reach this stage, though the politically sensitivities and 'posturing' attaching to the maritime/defence makes that rather unsurprising. Both countries having wanted to see their company as the 'top' shareholder, but latterly realizing that keeping both out of the hands of non-Europeans (read Chinese above all) was important, and as a Franco-Italian co-operation in a Europe so heavily dominated by Germany and the DM bloc. It is also significant as Franco-Italian relations have been at best lukewarm in recent years, neither Berlusconi nor Hollande or Sarkozy have helped much on that front, so this hopefully promises something of a new chapter in bilateral relations.

Bank of Canada governor Poloz's speech will also attract plenty of attention (December currently discounted as having a 73% probability of a further hike), as markets look for further signals on the BoC's policy path, and while the Czech National Bank is expected to keep rates on hold today at 0.25%, there will likely be some clues on when the CNB will follow up on last month's move, couched in the usual contingencies about CZK strength. New Zealand's RBNZ is by contrast likely to stick to a resolutely neutral policy outlook, citing both relatively low inflation and wage growth, the strength of the NZD and some signs that the economy appears to be slowing, let alone current uncertainties about the formation of the next government. Last but not least, there are govt bond auctions in the UK (Index-Linked 2036) and the USA (5-yr T-note & 2-yr FRN).

The China Industrial Profits data and the latest China Beige Book require some scrutiny. The former saw a further modest acceleration to 24.0% y/y for the January-August period, paced above all by the mining sector, which has seen profits rise five-fold thanks to firmer commodity prices, though some other sectors have fared less well, most notably utilities, which have seen profits drop by more than 20%. Be that as it may the key point is that with profits continuing the rise that started in 2016, after a prolonged period between 2011 and 2015 in which they were broadly flat, this does serve to modestly ease concerns about the rapid accumulation in debt, given that profit growth is now easily outstripping debt growth. This is no panacea, but at least this signals a better balance. The China Beige Book was important in so far as it suggests that the weak August monthly activity indicators do not augur a sharp deceleration in growth in H2, and it also suggested that China commodity demand should remain robust into the end of the year, even if the outlook for H1 2018 growth looks rather more fraught with risk.

** U.S.A. - Aug Durable Goods Orders / Pending Home Sales **
- After the usual sharp swings in aircraft orders (related to seasonal Air shows) in the past two months (July -6.8% m/m, June +6.4% m/m), headline Durable Goods Orders are expected to calm down, with a modest from transport accounting for an expected 1.0%. Core measures (ex-Transport and Non-defence Capital Goods ex-Aircraft) are seen posting a more modest 0.3% m/m, though the risk of an outlier looks to be elevated, given the conflicting pull of strong Orders indices in the various manufacturing surveys, and the possibility that Hurricane Harvey may have delayed some orders. As ever it will be the Shipments data that are key in terms of Q3 GDP, with core Shipments seen up 0.1% after a very solid 1.2% m/m in July. Pending Home Sales are expected to drop a further 0.5% m/m after falling 0.8% m/m in July that followed a 1.3% m/m bounce in June, with the low stock of existing home inventories continue to act as a drag, and the added wildcard of a hurricane related drag in both August and September, and the likelihood of a surge thereafter.


from Marc Ostwald
 
dentist007 said:
on 1 min bar chart
6.20am it hit 12642..that big rez
it pulled back
12620 held and it started to move up..ie a new minor uptrend
12630 held and then a tight range
OCO
long got triggered
Click to expand...

pnf trading at its purest...identify breakout point and get in on p/b before the retest and break
 
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