Trading with point and figure

- All eyes on Bank of England, Trump Fed chair nomination and US Tax reform
bill, modest data schedule likely to be largely overlooked; Czech rate
hike expected; another busy for earnings; France & Spain to sell debt

- BoE rate decision: rate hike expected, dissent also likely, guidance on
rate trajectory likely to be highly contingent

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

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

The much anticipated BoE rate deicision and Inflation report and Trump's announcement about who will be in charge at the Federal Reserve from Febuary 2018 dominate the day's schedule, along with the likelihood that the US Congress will also outline a tax reform plan. Otherwise it would be the case that markets would be on hold in a typical Thursday before Friday's US payrolls 'vigil'. Statistically the remaining continental European Manufacturing PMIs share the stage with German labour data, UK Construction PMI and US Q3 NOn-farm Productivity and weekly jobless claims, though these look likely to be little more than roadkill. Earnings reports should however garner rather more attention, with the non-US run likely to feature Alibaba, Bombardier, BT, Credit Suisse, L'Oreal and Royal Dutch Shell, while Apple will be 'top of the pops' in the US, which also sees reports from Blue Apron, DowDuPont, FNMA, ICE and Starbucks amongst others. FX markets would also do well not to overlook the Czech National Bank's expected follow-up 25 bps rate hike to 0.50%, while govt bond supply comes via way of medium and long-dated issuance in France and Spain.

** U.K. - BoE rate decision & Q4 Inflation Report **
- A 25 bps rate hike to a hardly restrictive 0.50% is pretty much fully discounted, and a failure to deliver would surely destroy the MPC's already very fragile credibility. There is a risk that there will be more than one dissenting vote (Cunliffe, Marsden look to be high probability dissenters, and Vlieghe not far behind), which would pile on the already high level of doubt that a further rate hike might materialize anytime soon, and that in turn questions the purpose of what would then appear to be a 'one and done' move. The message will nevertheless be that the market rate trajectory is likely to be too low, without offering much in the way of 'guidance', and of course referencing high levels of uncertainty about the economic outlook related to the Brexit negotiations. the accompanying Inflation Report and press conference will be dissected for some clues on the outlook

from Marc Ostwald
 
forgot to mention

reaction areas=column change of direction
X column changes to O column
more important the higher the reversal size is
 
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