Trading with point and figure

- UK and US dominate data schedule via UK inflation, Carney/MPC testimony,
US Import Prices, Industrial Production, NAHB Housing Index; German ZEW,
final Eurozone CPI and various central bank speakers, US Corporate
Earnings and German 2-yr sale

- UK CPI/RPI: energy, food, utilities, airfares & clothing/footwear likely
to boost prices, and impart upside risks, resulting in Carney letter

- UK PPI: Input prices seen rising on energy, but otherwise well behaved

- US Import Prices: Energy prices set to pressure headline, some upside
risk on ex-Petroleum from imported machinery and auto prices

- US Industrial Production: utilities and mining output expected to
give headline a lift; autos the wild card for manufacturing output

- Charts/Tables: BoE rate expectations, US/German 10-yr spread, WTI Oil

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

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

The UK looks like to take centre stage today with the full gamut of inflation indicators accompanying MPC Treasury Select Committee appointment hearings (starting 09:15) for Ramsden & Tenreyro followed by testimony from Carney. The rest of the statistical schedule has final Eurozone CPI (seen unrevised) and the ever futile, but often market sensitive ZEW survey ahead of US Import Prices, Industrial Production and NAHB Housing Market Index. ECB's Constancio & Praet, Fed's Harker and BoC's Wilkins complete the central bank speaker schedule, with Germany selling a further EUR 4.0 Bln of its current 2-yr, but these may well be overshadowed by US Corporate Earnings, which features amongst others: Goldman Sachs, Morgan Stanley, Johnson & Johnson and United Health. Speculation on the next Fed chairman has again heated up again, with various stories about Taylor meeting with Trump, and Yellen set to meet with Trump on Thursday. Powell still looks to be the favourite, in so far as he is seen as a moderate dove, but most importantly has openly endorsed (if not completely) Mnuchin's proposals on rolling back elements of the Volcker rule, and other post GFC regulation, which the departing Fischer and Yellen are clearly opposed to. While it is natural to view the appointment through the prism of who might keep the USD subdued, Trump's as ever enigmatic tactics, suggests that he might view breaking up NAFTA as a rather better tool theretofore. In any case, a decision on the next Fed chair appears to be likely before month end.

** U.K. - September CPI, RPI, PPI and August ONS House Prices **
- The consensus looks for both headline CPI and RPI to rise by 0.3% m/m, which would edge up y/y rates by 0.1 ppt to 3.0% and 4.0% respectively, with core CPI seen unchanged at 2.7% y/y. Petrol and Utility Prices will likely make a significant contribution to the upward pressures in m/m & y/y terms, with adverse base effects in Airfares also pushing the y/y rate higher, while Food (given BRC Food Prices rose to 2.2% from 1.3% y/y) and Clothing/Footwear will likely be the wild cards that could push headline CPI beyond the 3.0% threshold which requires the BoE governor to 'write a letter' to the Chancellor to explain the overshoot. Following yesterday's IKEA announcement of a 3.0% price hike to offset the impact of weaker GBP, the risk remains that CPI peaks later and at a higher rate than many are assuming. The risk in market terms may be that a higher than expected reading today heightens expectations of a November MPC rate hike, but tomorrow's Average Earnings and Thursday's Retail Sales undershoot forecasts, reigniting doubts about November, and delivering what one might term a classic 'sucker punch'. PPI Input is forecast to post a 1.2% m/m rise on the back of energy and commodity price rises, to push the y/y back up to 8.2%, though still below June's 9.9% and January's 19.9% peak. While other house price measures remain very subdued (e.g. yesterday's Nationwide at 1.4% y/y), the ONS measure has been buoyant, and is expected to remain so at 5.4% for August relative to July's 5.1%.

** U.S.A. - Sep Import Prices, Industrial Production & Oct NAHB Housing Index **
- Import Prices are very much third division these days in terms of inflation indicators, and today's September readings are expected to reprise what was seen in both CPI and PPI, namely a big boost from energy prices at the headline level, where the consensus looks for a 0.6% m/m rise, but otherwise expected to be subdued with the ex-petroleum measure forecast at just 0.1% m/m, though rising imported auto prices could see a marginally higher outcome. Industrial Production is expected to post a modest 0.2% m/m rise, boosted by a perhaps surprising rise in mining hours seen in the labour report (surprising given the hurricanes) and a rise in Utilities output. The labour report also a marginal gain in overall manufacturing hours, which is expected to be mirrored in the manufacturing output sub-index (consensus 0.1% m/m); the wild card will as ever be Auto output, which has been subdued by the weakness in sales throughout the year, up until last month's hurricane related jump, which probably served to clear an inventory overhang, rather than being likely to boost output going forward. As for the NAHB Housing Market Index, this is seen unchanged at 64, which is the year's low, but still well above levels that prevailed in 2016, and indeed robust by any historical standard. The survey's accompanying report has for many months underlined that demand remains strong and broad based, but that headwinds from a lack of appropriate plots for development in areas of high demand, and rising raw material costs continue to squeeze margins.

from Marc Ostwald
 
cantagril said:
Yep. 75 seems to be pretty much set in stone. Reckon it might have another go a bit later on. If we do get to 50 I'll add another lot or two.
Click to expand...


inflation numbers could introduce a rate rise....who knows..lol

Gareth Southgate will do a good job on mpc...
 
You must log in or register to reply here.

Similar threads

Michael Carr
  • Article
Equities Technical Analysis Testing Point & Figure Patterns
Replies
0
Views
3K
T2W Bot
T2W Bot
S
Point&Figure
2
Replies
39
Views
7K
subarashi
S
M
Point and Figure
Replies
2
Views
1K
Dentalfloss
Dentalfloss
A
Point and Figure box size for commodities
Replies
4
Views
4K
TWI
TWI
William Rafter
  • Article
Technical Analysis Point & Figure Gone High Tech
Replies
18
Views
9K
GruntnoWay
G
Top