Trading with point and figure

“The fault, dear Dentist, is not in our stars. But in ourselves, that we are underlings.” :cheesy:
 
Dax
13600 pump or dump

2af0bbt.png
 
- Digesting as expected BoJ policy meeting, US temporary spending bill
extension and Trade tariff hikes; awaiting start of Davos, UK PSNB,
German ZEW and US Richmond Fed Manufacturing; busier day for US
Corporate Earnings; UK, Germany and US to sell govt debt

- BoJ: resolutely sticking to 'still a long way from achieving targets
despite improvement in outlook' script

- Germany: DIHK export forecast upgrade far more material than inane ZEW

- Charts: WTI Oil, US / German 2-yr yield spread; US Junk Bond ETF, US
High Yield OAS spread, JPM EMBI yield spread

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

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

Once again it looks to be politics and earnings which will likely hold sway over markets, once the as expected BoJ meeting and forecast update have been digested, with the data schedule offering little outside of the UK PSNB, German ZEW and US Richmond Fed Manufacturing survey. Corporate earnings are likely to see Johnson & Johnson, Kimberly-Clark, Procter & Gamble and Verizon providing the headlines, while on the government bond auction front, the UK sells £1.0 Bln of Index-Linked Gilts, Germany offers EUR 5.0 Bln of 2-yr, and the US kicks off this week's refunding with $26.0 Bln of 2-yr. Next week's US Treasury quarterly refunding announcement remains the key short-term milestone, with a sizable increase in auction volumes expected to fund the tax cut. Politically the US shutdown is over for now, but the more material issue of a long-term govt spending and debt ceiling bill merely gets another kick down the road, with the next deadline now set at February 8th. Elsewhere the Davos World Economic Forum and the sixth round of NATFA talks both get under way, the latter standing very much in the shadow of the series of trade tariffs that the US has slapped on goods such as washers and solar panels, and boding poorly for the NAFTA talks, and of course bilateral trade between the US and Asia. Forecasts for the UK Dec PSNB (£4.3 bln vs. Dec 2016 £4.44 Bln) and Germany's pointless ZEW survey (Current 89.6 vs. Dec 89.3, Expectations 17.7 vs. 17.4) look to be at best agnostic, and will have to spring some surprises to jar markets that appear to be totally immersed in their Pavlovian goldilocks path of least resistance behavioural / investing pattern - see attached charts. Rather more material in terms of the German economic outlook is the DIHK (Chambers of Industry & Trade) upgrading its 2018 exports forecast to 6.0% y/y from a prior estimate of 4.5%, and 2017's 4.7%, and above the 25-yr average growth rate for exports of 5.3%.

In terms of the BoJ meeting, there were no surprises as it left its policy rate and annual QQE volume targets unchanged, and also its headline GDP and CPI forecasts, though it did shade its assessment of inflation expectations slightly higher. Kuroda was again at pains to emphasize that a apering debate is not on the table, given the 2.0% inflation target remains distant, and perhaps ironically he also chose to emphasize that the BoJ's day-to-day JGB buying operations are not an indicator for the future course of monetary policy.

from Marc Ostwald
 
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