Trading with point and figure

- Modest schedule of data sees UK PSNB, US Existing Home Sales and Canada
CPI and Retail Sales; politics likely to be the overarching themes, via
way of Brexit negotiations, Catalonia, US tax cut/budget hopes and
run of elections and referenda in Japan and Europe; US earnings also in
focus

- US Existing Home Sales: further modest decline expected as very low
inventories continue to impede sales

- Charts: LME Nickel, Iron Ore, US Copper and WTI Oil futures

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

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

Having 'survived' the Black Monday anniversary, markets can more than likely revert to 'auto-pilot', with the day's schedule unlikely to provide much inspiration, outside of Brexit related headlines from Brussels, or anything related to the Madrid-Catalonia stand-off. The passage of a FY 2018 budget outline in the US Senate overnight offers hope that progress is being made to an eventual tax cut bill, but with the parameters of the bill inferring quite sharp cuts to entitlements and exemptions upon which there is much disagreement, markets would be well advised to temper their optimism, though that advice will probably fall on deaf ears in these very financially repressed times. Statistically, the UK PSNB precedes Canadian CPI and Retail Sales along with US Existing Home Sales. Fed speak comes via way of the rather hawkish Ms Mester ahead of tonight's speech from Yellen. On the false political narrative front, the Czech general election has already spawned numerous headlines about this signalling further EU/Euro scepticism and another 'shift to the right', with ANO likely to be largest party in the new legislature, according to opinion polls, though it was already a junior coalition in the current government. Another coalition made up of ANO, the Social Democrats and Christian Democrats looks likely, in other words more of the same, with ANO calling more of the shots than it previously did. In truth opinion polls suggest an even more fractured political landscape with more parties getting into parliament. Sunday will also see referendums on greater autonomy (N.B. not independence) for the Italian regions of Veneto and Lombardia (both very wealthy), which look set to see overwhelming majorities for more autonomy, but should in no way be confused with Catalonia, particular given the already uniquely complex nature of Italian politics. By contrast Japan's general election would appear to be a foregone conclusion, outside of the potential for typhoon disrupting voting, with Abe set to win easily, though probably falling short of the 2/3 'super majority' required to make constitutional reforms. Earnings highlights are likely to include reports GE, Honeywell, Procter & Gamble & Schlumberger, with pace of reports set to pick up very sharply next week, which will also see the much anticipated ECB meeting and the advance US and UK Q3 GDP readings.

** U.S.A. - Sep Existing Home Sales **
- The shortage of homes for sale was well documented in August with the 1.88 Mln stock being the lowest for any August on record, and per se this will inevitably continue to weigh on sales. September Sales are expected to post a fourth consecutive fall of -0.9% m/m to a 5.30 Mln SAAR pace, which would in turn be the lowest since February 2016, and down 7.0% relative to March's cyclical peak of 5.70 Mln. The NAHB survey earlier in the week offered no reason to expect any improvement in the near term, though this clearly is not a function of demand related weakness.


from Marc Ostwald
 
This mornings DAX chart

qnwpc2.jpg
 
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