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Well I got my drop on DAX, took awhile though.
Trading with point and figure
- Thread starter Dentalfloss
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DAX areas of interest
C
cantagril
Indeed! I wasn't expecting that quite so soon.
I'll soon be able to upgrade from hutch-load to kennel - the shed gets nearer and nearer all the time. Well, actually, in my case it doesn't. Sometimes it gets quite near and then Madame Canta somehow detects the unusual proximity and gives the situation a hard reset bringing the level down impressively close to zero on occasion.
Anyway, that's me done - so all the best to everyone for pleasant weekend.
Dentalfloss
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Dentalfloss
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US October 2017 Labour report: "Hourly Earnings miss erroneously distracting from otherwise strong report"
a) Payrolls / Establishment survey - While Oct Payrolls 'missed' forecasts at 261K (still very strong), the 90K of net upward revisions to August & September actually means that the outturn was a little better than forecast. In the detail, Manufacturing posted a solid 24K rise, but unsurprisingly it was the rebound in Food Services and Drinking Places payrolls, which paced the 219K rise in Services. That said, there was also a solid 50K rise in Professional/business payrolls. The 3-month average for Payrolls at 162K remains well above the Fed's breakeven rate of 80-100K. None of this is particularly surprising given other labour demand indicators
b) Unemployment Rate / Household Report - a fresh Unemployment Rate low of 4.1% is rather less impressive, when one looks at the breakdown, which saw the Workforce slide 765K, though this follows previously very strong monthly gains, as such there is probably an element of mean reversion. That also applies to the 484K fall in Employment and 281K fall in Unemployment. This in turn dictated the sharp setback in the Participation Rate to 62.7% from 63.1% - hurricane related distortions may well have played a role. However the big number in the Household Survey was the U6 Underemployment Rate, which fell to a new cyclical low of 7.9%, thus matching the pre-GFC low. The latter implies an increasing shift from part-time to full-time work, which in passing was also very evident in the Canadian labour data published at the same time. The latter has seen gains of 88.7K and 112K in Full-time jobs in the past two months, and drops of 53.4K and 102K in Part-time.
c) Average Hourly Earnings / Weekly Hours - Average Weekly Hours saw a 0.2% m/m rise, but more notably saw Manufacturing Hours bounce back 0.8% m/m, which implies a strong rise in October Industrial Production. Inevitably market participants have honed in on the Average Hourly Earnings 'miss' at Flat m/m 2.4% y/y against September's 0.5% / 2.9%, both readings are heavily distorted due to the hurricanes, and it is perhaps wise to note a still steady 2.6% average y/y pace as per the attached chart. As is well known, Average Hourly Earnings is a rather poor measure of wage growth, and it is as well to remind ourselves of the trends seen in rather better measures such as the Atlanta Fed's Wage Growth Tracker and the Employment Cost Index (see attached charts).
d) Market reaction - As has increasingly been the case this year, market reaction has largely been a case of thrashing around, but in the final assessment still going sideways. Markets may well revert to picking over the Congressional Tax Plan and its chances of passing into law, perhaps the more so as next week's US data schedule is very minimalist. (Further thoughts on US Tax plan, Fed appointment and Payrolls preview can be found here:
).
- Charts: USD TWI, US 10yr yield, S&P500 future, US Underemployment Rate, Average Hourly Earnings, Atlanta Fed Wage Growth Tracker and Employment Cost Index and Fed rate probabilities by meeting)
..........................................................................
Marc Ostwald
Global Strategist
ADM Investor Services International
a) Payrolls / Establishment survey - While Oct Payrolls 'missed' forecasts at 261K (still very strong), the 90K of net upward revisions to August & September actually means that the outturn was a little better than forecast. In the detail, Manufacturing posted a solid 24K rise, but unsurprisingly it was the rebound in Food Services and Drinking Places payrolls, which paced the 219K rise in Services. That said, there was also a solid 50K rise in Professional/business payrolls. The 3-month average for Payrolls at 162K remains well above the Fed's breakeven rate of 80-100K. None of this is particularly surprising given other labour demand indicators
b) Unemployment Rate / Household Report - a fresh Unemployment Rate low of 4.1% is rather less impressive, when one looks at the breakdown, which saw the Workforce slide 765K, though this follows previously very strong monthly gains, as such there is probably an element of mean reversion. That also applies to the 484K fall in Employment and 281K fall in Unemployment. This in turn dictated the sharp setback in the Participation Rate to 62.7% from 63.1% - hurricane related distortions may well have played a role. However the big number in the Household Survey was the U6 Underemployment Rate, which fell to a new cyclical low of 7.9%, thus matching the pre-GFC low. The latter implies an increasing shift from part-time to full-time work, which in passing was also very evident in the Canadian labour data published at the same time. The latter has seen gains of 88.7K and 112K in Full-time jobs in the past two months, and drops of 53.4K and 102K in Part-time.
c) Average Hourly Earnings / Weekly Hours - Average Weekly Hours saw a 0.2% m/m rise, but more notably saw Manufacturing Hours bounce back 0.8% m/m, which implies a strong rise in October Industrial Production. Inevitably market participants have honed in on the Average Hourly Earnings 'miss' at Flat m/m 2.4% y/y against September's 0.5% / 2.9%, both readings are heavily distorted due to the hurricanes, and it is perhaps wise to note a still steady 2.6% average y/y pace as per the attached chart. As is well known, Average Hourly Earnings is a rather poor measure of wage growth, and it is as well to remind ourselves of the trends seen in rather better measures such as the Atlanta Fed's Wage Growth Tracker and the Employment Cost Index (see attached charts).
d) Market reaction - As has increasingly been the case this year, market reaction has largely been a case of thrashing around, but in the final assessment still going sideways. Markets may well revert to picking over the Congressional Tax Plan and its chances of passing into law, perhaps the more so as next week's US data schedule is very minimalist. (Further thoughts on US Tax plan, Fed appointment and Payrolls preview can be found here:
- Charts: USD TWI, US 10yr yield, S&P500 future, US Underemployment Rate, Average Hourly Earnings, Atlanta Fed Wage Growth Tracker and Employment Cost Index and Fed rate probabilities by meeting)
..........................................................................
Marc Ostwald
Global Strategist
ADM Investor Services International
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Expect the DAX to go a little deeper maybe 13410, main trend support.
Dentalfloss
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dax
bounce from 13424-13448 supp area
bounce from 13424-13448 supp area
Dentalfloss
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yaeh
there is a pivot 13400-13408
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13450 is resistance, there now, will it be rejected?
Dentalfloss
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change plot to close
we gotta bull flag on 01/11...it popped
price testing rez now
thats all we know
its messy
we gotta bull flag on 01/11...it popped
price testing rez now
thats all we know
its messy
Dentalfloss
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DOW
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dow....selllers only got a few in that consolidation...
still bullish
no sign of a top as yet
still bullish
no sign of a top as yet
Dentalfloss
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Dentalfloss
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The Week Ahead - Preview: 6 to 10 November 2017
- Largely due to the way that the calendar falls in November, this week's statistical schedule is not particularly burdensome, which will likely put the focus even more on political and policy events, perhaps above all Trump's trip to Asia and Brexit related developments. That said, financial markets perforamnce remains overrisingly dictated by the constraints of financial repression, and investment strategies primarily remain of the 'path of least resistance, job preservation' variety, as a consequence, with gearing / leverage elevated and by extension posing as the most likely source of an upset.
- Statistically you know that "it's a nothing week" in the USA, when the data highlights are JOLTs Job Openings and preliminary Michigan Sentiment. China therefore gets top billing via way of Trade, CPI and PPI. The UK and Eurozone have a rather busier schedule with (national) Industrial Production and Trade data featuring heavily. Germany has Factory Orders, which also feature in Japan along with Labour Cash Earnings, while the UK also sees BRC Retail Sales, Construction Output and the RICS survey. Monday also brings the remaining Services PMIs in Japan and Europe.
- Politically Trump emabarks on a marathon trip around Asia, which takes in China mid-week, with the focus on North Korea and South China Sea tensions, as well as vast array of bilateral trade issues. For the UK, a new round of Brexit related negotiations begins, which will certainly be critical in determining whether the December EU summit can opt to open broader, second round negotiations on the UK's trade and other relationships with the EU post Brexit. There would appear to be some movement on the so-called Brexit 'exit bill', and indeed UK and EU citizens rights post Brexit, however the thorny issue of Northern Ireland appears to be a major stumbling block, with the relationship between the Westminster and Dublin governments at its worst for a number of decades. Equally problematic are the chasm that has opened up over the regional govt in Northern Ireland, with Sinn Fein and the DUP seemingly a world apart in terms of being able to form a regional govt, and the UK government very vulnerable due to its dependence on the DUP to pass legislation in Westminster. Indeed with the run of allegations of inappropriate behaviour engulfing parliament, the UK government appears to be doing little more than fire fighting on multiple fronts, which in itself hardly bodes well for the Brexit negotiation process. There are also EcoFin and Euro group finance ministers meetings, which among other topics are set to discuss banking union and the fiscal rules for European Monetary Union, though material progress on these seems unlikely until a new Gemran coalition government is formed.
- In central bank terms, Australia's RBA and New Zealand's RBNZ are both expected to keep policy rates on hold at 1.50% and 1.75% respectively, and will doubtless stick to signalling that rate hikes are still a fairly distant prospect, with the RBNZ also waiting to see how its operating parameters will be changed by the new government. Dudley and Draghi top a quite busy week for Fed and above all ECB speakers, and it will be a busy week for policy decisions in non-Eurozone Europe, Asia and EM countries. None of the latter are expected to see any policy rate changes, however there will be particular interest in the Polish and Romanian central bank decisions, given the realtively hawkish tone struck by the Czech National Bank last week. That said Poland's NBP has been resolute in arguing that with inflation well contained around target, it does not see any reason to hike rates near term, despite the strength of the economy, rapidly falling unemployment and robust real wage growth. Romania's BNR has also resisted pressure to tighten policy, and faces the dilemma that with the fiscal side of the equation seemingly careering out of control, with govt spending rising rapidly (and thus fuelling the economic boom) and tax revenues falling sharply as a proportion of GDP, the risk of an economic derailment is escalating. Given Powell's nomination as Fed chair and his endorsement of some rollback of post-GFC regulation, the also recently confirmed Fed Vice Chairman for Supervision Quarles' speech at the Clearing House annual conference will clearly demand some attention.
- Govt bond supply sees the US quarterly refunding with 3, 10 & 30-yr Treasuries, while a modest run in the Eurozone has Germany selling 5-yr and a 'tiddler' auction of 2030 inflation linked Bunds, while Austria sells 5 & 10-yr, and the UK re-opens the 2023 Gilt. However it is woe stricken and debt laden Venezuela which will attract more attention, following President Maduro's announcement of a debt restructuring - for some background, this Aplhaville post is worth re-reading https://ftalphaville.ft.com/2017/10...he-coming-need-for-a-standstill-in-venezuela/ along with this FT article: https://www.ft.com/content/56de9ebe-c05f-11e7-b8a3-38a6e068f464
- In the energy space, OPEC's World Oil Outlook and the EIA's Short-Term Energy Outlook will as ever garner plenty of attention, particularly any revisions to the supply and demand outlook for 2018, as the OPEC/Non-OPEC prodution cap agreement appears likely to be extended, given that the inventory overhang looks likely to persist well into 2018. In the longer run, there will be even greater challenges, as per this Cleantechnica article "Shifting Tides Could Strand 25% Of Global Oil Refining Capacity By 2035" https://cleantechnica.com/2017/11/0...il-refining-capacity-2035/?platform=hootsuite
..........................................................................
Marc Ostwald
Strategist
ADM Investor Services International
- Largely due to the way that the calendar falls in November, this week's statistical schedule is not particularly burdensome, which will likely put the focus even more on political and policy events, perhaps above all Trump's trip to Asia and Brexit related developments. That said, financial markets perforamnce remains overrisingly dictated by the constraints of financial repression, and investment strategies primarily remain of the 'path of least resistance, job preservation' variety, as a consequence, with gearing / leverage elevated and by extension posing as the most likely source of an upset.
- Statistically you know that "it's a nothing week" in the USA, when the data highlights are JOLTs Job Openings and preliminary Michigan Sentiment. China therefore gets top billing via way of Trade, CPI and PPI. The UK and Eurozone have a rather busier schedule with (national) Industrial Production and Trade data featuring heavily. Germany has Factory Orders, which also feature in Japan along with Labour Cash Earnings, while the UK also sees BRC Retail Sales, Construction Output and the RICS survey. Monday also brings the remaining Services PMIs in Japan and Europe.
- Politically Trump emabarks on a marathon trip around Asia, which takes in China mid-week, with the focus on North Korea and South China Sea tensions, as well as vast array of bilateral trade issues. For the UK, a new round of Brexit related negotiations begins, which will certainly be critical in determining whether the December EU summit can opt to open broader, second round negotiations on the UK's trade and other relationships with the EU post Brexit. There would appear to be some movement on the so-called Brexit 'exit bill', and indeed UK and EU citizens rights post Brexit, however the thorny issue of Northern Ireland appears to be a major stumbling block, with the relationship between the Westminster and Dublin governments at its worst for a number of decades. Equally problematic are the chasm that has opened up over the regional govt in Northern Ireland, with Sinn Fein and the DUP seemingly a world apart in terms of being able to form a regional govt, and the UK government very vulnerable due to its dependence on the DUP to pass legislation in Westminster. Indeed with the run of allegations of inappropriate behaviour engulfing parliament, the UK government appears to be doing little more than fire fighting on multiple fronts, which in itself hardly bodes well for the Brexit negotiation process. There are also EcoFin and Euro group finance ministers meetings, which among other topics are set to discuss banking union and the fiscal rules for European Monetary Union, though material progress on these seems unlikely until a new Gemran coalition government is formed.
- In central bank terms, Australia's RBA and New Zealand's RBNZ are both expected to keep policy rates on hold at 1.50% and 1.75% respectively, and will doubtless stick to signalling that rate hikes are still a fairly distant prospect, with the RBNZ also waiting to see how its operating parameters will be changed by the new government. Dudley and Draghi top a quite busy week for Fed and above all ECB speakers, and it will be a busy week for policy decisions in non-Eurozone Europe, Asia and EM countries. None of the latter are expected to see any policy rate changes, however there will be particular interest in the Polish and Romanian central bank decisions, given the realtively hawkish tone struck by the Czech National Bank last week. That said Poland's NBP has been resolute in arguing that with inflation well contained around target, it does not see any reason to hike rates near term, despite the strength of the economy, rapidly falling unemployment and robust real wage growth. Romania's BNR has also resisted pressure to tighten policy, and faces the dilemma that with the fiscal side of the equation seemingly careering out of control, with govt spending rising rapidly (and thus fuelling the economic boom) and tax revenues falling sharply as a proportion of GDP, the risk of an economic derailment is escalating. Given Powell's nomination as Fed chair and his endorsement of some rollback of post-GFC regulation, the also recently confirmed Fed Vice Chairman for Supervision Quarles' speech at the Clearing House annual conference will clearly demand some attention.
- Govt bond supply sees the US quarterly refunding with 3, 10 & 30-yr Treasuries, while a modest run in the Eurozone has Germany selling 5-yr and a 'tiddler' auction of 2030 inflation linked Bunds, while Austria sells 5 & 10-yr, and the UK re-opens the 2023 Gilt. However it is woe stricken and debt laden Venezuela which will attract more attention, following President Maduro's announcement of a debt restructuring - for some background, this Aplhaville post is worth re-reading https://ftalphaville.ft.com/2017/10...he-coming-need-for-a-standstill-in-venezuela/ along with this FT article: https://www.ft.com/content/56de9ebe-c05f-11e7-b8a3-38a6e068f464
- In the energy space, OPEC's World Oil Outlook and the EIA's Short-Term Energy Outlook will as ever garner plenty of attention, particularly any revisions to the supply and demand outlook for 2018, as the OPEC/Non-OPEC prodution cap agreement appears likely to be extended, given that the inventory overhang looks likely to persist well into 2018. In the longer run, there will be even greater challenges, as per this Cleantechnica article "Shifting Tides Could Strand 25% Of Global Oil Refining Capacity By 2035" https://cleantechnica.com/2017/11/0...il-refining-capacity-2035/?platform=hootsuite
..........................................................................
Marc Ostwald
Strategist
ADM Investor Services International
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Thanks to 007, I can relax now until Monday morning.
Dentalfloss
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