Trading with point and figure

from Marc Ostwald

- Digesting BoJ decision to ditch timeframe for attaining CPI target and
downturn in Tokyo CPI measure, soft French GDP, as expected Spanish GDP;
awaiting UK and US Q1 advance GDP, US Employment Cost Index, raft of
ECB speakers, Tump Merkel meeting, Russia and Colombia rate decisions

- French / Spanish GDP / CPI readings in tune with ECB concerns

- UK GDP: weak consumer spending and weather effects expected to weigh
heavily, some risk of downside miss

- US Q1 GDP: seen slowing sharply on Personal Consumption, Net Exports
drag likely to moderate, Business & Housing Investment to offset,
Inventories as ever the wild card; focus on Wages in Q1 ECi report

- Russia rates: RUB drop short to medium term impact on inflation
puts high bar to any further rate cuts

- Charts: French GDP contributions, US LIBOR/OIS spread, INR vs 5-yr INR OIS,
IDR, THB, TRY, ZAR, BRL, MXN & COP all vs. USD, BoE rate expectations

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

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

Today was always going to be the high water mark in statistical terms, and the events schedule is also teeming with potential market movers. In data terms, there is already plenty to digest via way of Japan Tokyo CPI (soft), Retail Sales (missed forecast), Industrial Production (solid), and Unemployment and French (and Spanish) Q1 GDP and April CPI prints, while ahead lie UK and US GDP, German Unemployment and the various Eurozone confidence surveys. On the central bank side of the ledger, the BoJ unsurprisingly left its policy settings unchanged, and its forecast tweaks underline its message that there is a still long way to go before it gets close to reaching its 2.0% CPI target. The decision to drop a timeframe for when it will hit its target is almost certainly to confirm any remaining doubters that it will not be considering a taper or any other wind back on its QQE policy anytime soon. There are a rash of ECB speakers, who will doubtless echo the message from Draghi at yesterday's press conference that the ECB is not going to be rushed into deciding on how to proceed with its QE taper. While BoE's Carney is speech is to mark the launch of a BoE education related initiative, he will likely more than likely face some media questions that are policy related. Be that as it may, it is the meeting between Merkel and Trump which may command most attention, with Germany and the USA (or rather Trump) clearly "not on the same page of the book" on numerous issues, be they related to trade, Russia or geopolitical tensions. As such the question is whether they can paper over the chasm like cracks. Elsewhere on the EM central bank front, the Rouble's sanctions related drop has put paid to prior expectations that Russia's Bank Rossi had room to cut rates further, and a renewed dip in the RUB yesterday underlines that it remains vulnerable to the threat of further measures, though that move was probably more a function of the upcoming market holidays, with Russian markets closed between 30 April and 3 May. By extension the central bank will be keen to keep a close eye on the short- to medium impact on inflation, which it now sees rising to its 4.0% target in fairly short order. Colombia's central bank is also expected to cut rates by a further 25 bps to 4.25%, though the relatively sharp decline in the COP over the past week will likely prompt considerable caution from the central bank in terms of the inflation and policy outlook. In earnings terms there are Honda Motor and Sony results to digest, with the focus in Europe on Airbus, BBVA, Daimler, Eni, RBS and Sanofi, while the US concludes with Charter Comms, Chevron, Colgate-Palmolive, LyondellBasell Industries and Phillips 66.

** Europe/UK - Q1 advance GDP readings / France & Spain April CPI **
- UK Q1 advance GDP is expected to be hit by bad weather effects and slowing Consumer Spending, easing to 0.3% q/q from 0.4% in Q4, but leaving the y/y rate unchanged at 1.4%, with the Dec-Feb Index of Services seen unchanged at 0.6%. The ONS has already noted that Retail Sales will deduct 0.03 ppts from headline GDP, and it will also take a hit from Construction Output, with a modest boost from Industrial Production, even if this largely represents a reversal of the deduction from the Forties oil field shutdown in Q4. Across the Channel, there is likely to be considerable divergence, with Austria and Spain both essentially keeping pace with Q4 at 0.7% q/q respectively, but France missed forecasts of a slowdown to 0.4% q/q, with a print of 0.3% q/q 2.1% y/y (vs Q4 0.7% q/q 2.6% y/y), while Belgium should roughly match Q4's 0.5%. Provisional Eurozone Q1 GDP is due on May 2. French and Spanish HICP both just missed forecasts 1.7% and 1.1% respectively, (with German CPI due on 30 April), but underline why the ECB remains very cautious about giving any concrete signals on the timing of its next policy moves, given that the inflation uptrend is at best weak, and a lack of clarity about the drivers of the slowdown in Q1 GDP in France and Germany, above all whether this is transitory or not.

** U.S.A. - Q1 advance GDP / Employment Cost Index **
The US advance Q1 GDP reading will of course inevitably steal the show. The consensus looks for 2.0% SAAR headline with the Deflator little changed at 2.2%, while the core PCE Deflator is seen jumping to 2.5% from 1.9%, and Personal Consumption set to slow very sharply to just 1.1% from Q4's 4.0%. Yesterday's March Goods Trade data and Durable Goods forces some revisions in terms of the components, with a sharp narrowing in the Goods Trade deficit (on higher exports, slower imports) implying Trade will deduct around 0.5 ppts (against a prior expectations of 0.7 ppts), which will be offset by a smaller positive contribution from Business Investment, along with a solid contribution from Housing, and indeed Inventories. The various regional Fed GDPnow Q1 estimates range from New York St Louis at 3.5%, though NY at 2.9%, to Atlanta at 2.0%. It will be accompanied by the Q1 Employment Cost Index that is expected to edge back up to 0.7% from Q4's 0.6%, whereby Wages & Salaries (last 0.5% vs. period 0.7%) will be the mostly closely watched item, given that the Q4 level was much lower than the readings seen in Q1 to Q3 (average 0.7% q/q).
 
ftse

35d0wg6.png
 
cantagril said:
Morning all,

Still holding Long EG at .8685

Thinking that there are more chances for £ negativity than € with UK GDP and German Unemployment.

BTW: Greetings to Atilla ...though I feel I must point out a breach in court etiquette in that you addressed Our Great Leader and Teacher as "Mr D."

Customary forms of address tend to favour "Your Highness" or for the classically inclined, "My Liege". It is also usual (when making applications for Grace and Favour awards) to present His Majesty with a token gift - such as a diamond encrusted sceptre...or Ipad, in keeping with these modern times.:)
Click to expand...


i wish you would tell my wife how to address me......lol
 
dentist007 said:
i wish you would tell my wife how to address me......lol
Click to expand...


Don't tell me, let me guess how it is at the moment: "Oy, you!", perhaps?

I feel your pain as, alas, things are not much different chez Canta:(

I believe that there are establishments that specialise in teaching protocol and etiquette to those pretending to high office or yet, to straddling a prince or two.

For rest of us, your unworthy retinue, you may rest assured in the knowledge of our humble obedience and undying loyalty....unless the pips start drying up of course, in which case it might be off to Tyburn, right quick.
 
You must log in or register to reply here.

Similar threads

Michael Carr
  • Article
Equities Technical Analysis Testing Point & Figure Patterns
Replies
0
Views
4K
T2W Bot
T2W Bot
S
Point&Figure
2
Replies
39
Views
7K
subarashi
S
M
Point and Figure
Replies
2
Views
1K
Dentalfloss
Dentalfloss
A
Point and Figure box size for commodities
Replies
4
Views
4K
TWI
TWI
William Rafter
  • Article
Technical Analysis Point & Figure Gone High Tech
Replies
18
Views
9K
GruntnoWay
G
Top