Trading with point and figure

DAx into the open

5ybxus.png
 
its pulling back from that 12420 rez area
retrace and bulls should come in
trend is up...uneless it gets taken out with a bigger p/b
 
- Modest data schedule has UK RICS and BCC surveys, China FDI to digest,
awaiting Sweden CPI, US Import Prices and weekly jobless claims,
India CPI & Industrial Production; busy day for central banks has BoE
credit surveys & Carney speech, rash of ECB, Norges Bank and Riksbank
speakers and Fed's Kashkari; OPEC monthly oil report, Italy multi-tranche
BTP and US 30-yr auctions; Blackrock earnings

- Sweden CPI: seen rebounding quite sharply on headline and core, but
Riksbank likely to stand pat ('one swallow does not a summer make')

- India CPI: food set to continue to ease pressures, longer-term pressures
remain, but gives RBI scope to focus on macro-prudential issues near-term

- US Initial Claims: seen dropping back towards 43-year lows

- Charts: LME Aluminium cash vs 3-mth; Palladium, LME Nickel, WTI vs Brent,
TRY and RUB spot, US HY OAS avg spread vs govts

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

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

The thematics of the moment - trade and geo-political (i.e. Syria) tensions along with the Russian sanctions fall-out (see various attached metals, above all Aluminium, plus RUB and TRY charts) - continue to provide the counterpoint to the macro backdrop, which for today is rather light on statistics, and long on central banks, with the OPEC monthly report and bond auctions in Italy (3, 7, 20 & 30-yr) and the US (30-yr) offering other points of interest. In data terms, there are the UK RICS survey to digest ahead of Swedish CPI, Indian Industrial Production & CPI, while the US has weekly jobless claims and Import Prices, none of which seems likely to get much traction given the overarching political themes. On the rate decision front, the Bank of Korea held rates as expected, and Banco de Mexico is expected to follow suit this evening as ebbing inflation, and a firmer MXN (on NAFTA optimism) give it plenty of room for manoeuvre. The BoE publishes its latest Credit Conditions & Bank Liabilities surveys, which may well signal tighter conditions for consumer and real estate related lending, with governor Carney bank on his home turf in Canada speaking at the "Canada Growth Summit", while in the Eurozone ECB, Bundesbank and Norges Bank speakers are plentiful, and in the US Fed arch dove Kashkari speaks. Last but not least Blackrock kicks off the US Q1 earnings season ahead of some of the 'money centre' bank tomorrow. For all that US Treasuries and other G7 oovt bond markets are seeing support from FTQ/FTS flows, it is worth noting that this is not really crimping high levels of corporate issuance, or underlying reach for yield & risk appetite (despite a choppy profile for equities), as can be seen in the attached of the US HY OAS average spread vs govts, which tightened in spread terms yesterday.

By rights, an expected rebound in Swedish March CPI (consensus: headline 0.3% m/m 2.0% y/y vs. Feb 1.6% y/y; core CPIF 0.4% m/m 2.1% vs. Feb. 1.7% y/y) might be expected to give the Riksbank rather greater confidence to start on the path to policy normalization sooner rather than later, but Ohlsson remains a lonely 'hawk', and the rest of the policy committee would rather remain hostage to following the ECB's lead, above all running scared of sparking a recovery in the SEK. As previously noted, India's RBI has rather bigger fish to fry on the macro-prudential front (PNB Scandal, bank NPLs) than any pressing need for monetary policy changes, and today's March CPI data is not expected to present it with any headaches if projections of a further dip to 4.2% y/y, on the back of a further setback in Food prices, from February's 4.44% and December's high of 5.21%. Eminently it remains above the RBI's 4.0% target, and a closer inspection underlines that, as with China's CPI yesterday the setback is heavily food related, and while the RBI cut its forecast for H1 FY 2018/19 CPI to 4.7%-5.1% from 5.1%-5.6%, it assumes the current dip will be transitory, but that is a problem it can address much later in the year or indeed (and as markets currently assume), if needed. Forecasts for India's February Industrial Production are the usual extrapolation from the already published Infrastructure Industries (ca. 40% of total IP) Output data, which dipped to 5.3% from January's 6.1%, and headline Production is thus seen at 6.9% y/y vs. 7.5% in January. US weekly jobless claims spiked last week to 242K from 218K (1K above the recent 43-yr low), though this was primarily a function of Easter effects, and a drop back to 230K is anticipated; the fact remains that the US labour market remains tight, regardless of last week's Payrolls noise.


from Marc Ostwald
 
Morning Campers,

Still underwater on USDCAD - might be some respite with OPEC at 12h30.

On EG I'll wait until the ECB report before doing anything. Attached is my usual 15m and a 1 min which I believe shows a similar set-up to Dentists's yesterday.....and I see now that whilst I've been writing this that it's now basically all over:) See bar chart.
 

Attachments

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