Dentalfloss
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good ideaAlas, I was unable to shoehorn the Rolls-Royce Merlin into the Robin in time - so I'll be propping up the bar at the Casino instead
Trading with point and figure
- Thread starter Dentalfloss
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C
cantagril
Out at 1.3570 +30
Dentalfloss
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from Marc Ostwald
y in data and event terms to end the week, Draghi speech
accompanied by Canada labour data, US Import Prices and India
Production; Italy to test demand with 3, & & 15-yr BTP sales
- Canada labour data: further solid Employment gain expected, focus
on projected pick-up in wages
- US Import and Export prices likely to see energy led rise, ex-Petroleum
likely to remain relatively well contained
- Risk asset (above all EM) rally following US CPI underline FOMO and
TINA are not dead..... yet
- Charts/Tables: Fed rate probabilities, WTI Oil, JPM EM bond spread,
TRY, RUB, ZAR, INR, IDR, BRL, MXN and ARS all vs USD
..........................................................................
********************
** EVENTS PREVIEW **
********************
A rather underwhelming day awaits in terms of data and events, with Draghi's speech the highlight of a meagre schedule that will also see Canadian labour data, US Import & Export Prices and Indian Industrial Production, along with a keynote foreign policy speech by Merkel (whose 12 years in office have been littered with foreign policy faux pas) and some Fed and BoC speak. As Italy awaits the formation of an ostensibly anti-establishment Lega/M5S government, the Italian Treasury will test demand with a total of EUR 6.75 Bln of 3, 7 & 15-yr BTPs. Politics will continue to provide much of the music, as it will next week, which has a bust run of US and Chinese monthly activity data, German & Japanese Q1 GDP and the UK labour market report, accompanied by a raft of Fed, ECB and BoE speakers. In terms of the Canadian labour data, that has been consistently robust for much of the past year barring the January outlier, and is projected to see Employment rise a further 20K, with the Unemployment Rate set to remain at its cyclical low of 5.8%, while Average Hourly Earnings are seen expected to edge up to 3.2% y/y, still just short of January's 3.3% high. In that respect the speech by BoC's Wilkins will be of interest to see whether she echoes the increased optimism of governor Poloz since the BoC's April meeting on the Canadian economic outlook. US Import and Export Prices are seen rising 0.5% and 0.4% m/m respectively, but are likely to be of largely academic interest, in so far as they follow the modest misses (relative to forecasts) on PPI and CPI. The sharp recovery seen in many EM currencies and above all the JPM EM bond index yesterday in the wake of what was a marginal miss in core CPI, heavily predicated by the drop in auto prices (-0.5% m/m) and a sharp drop in airfares (-2.7% m/m), with the latter almost certainly seeing a very sharp reversal next month, underlines that reach for yield and risk assets remains a key influence, which is more testament to lingering FOMO (fear of missing out) and TINA (there is no alternative) influences than a proper risk assessment - out of such complacency do accidents arise. Just for reference, Fed rate probabilities did not budge yesterday, and the Fed's current rate path is precisely why EM currencies and assets have been under a cloud of late, and just for reference neither did oil prices, which thanks to the Iran risk premium continue to climb ever higher.
y in data and event terms to end the week, Draghi speech
accompanied by Canada labour data, US Import Prices and India
Production; Italy to test demand with 3, & & 15-yr BTP sales
- Canada labour data: further solid Employment gain expected, focus
on projected pick-up in wages
- US Import and Export prices likely to see energy led rise, ex-Petroleum
likely to remain relatively well contained
- Risk asset (above all EM) rally following US CPI underline FOMO and
TINA are not dead..... yet
- Charts/Tables: Fed rate probabilities, WTI Oil, JPM EM bond spread,
TRY, RUB, ZAR, INR, IDR, BRL, MXN and ARS all vs USD
..........................................................................
********************
** EVENTS PREVIEW **
********************
A rather underwhelming day awaits in terms of data and events, with Draghi's speech the highlight of a meagre schedule that will also see Canadian labour data, US Import & Export Prices and Indian Industrial Production, along with a keynote foreign policy speech by Merkel (whose 12 years in office have been littered with foreign policy faux pas) and some Fed and BoC speak. As Italy awaits the formation of an ostensibly anti-establishment Lega/M5S government, the Italian Treasury will test demand with a total of EUR 6.75 Bln of 3, 7 & 15-yr BTPs. Politics will continue to provide much of the music, as it will next week, which has a bust run of US and Chinese monthly activity data, German & Japanese Q1 GDP and the UK labour market report, accompanied by a raft of Fed, ECB and BoE speakers. In terms of the Canadian labour data, that has been consistently robust for much of the past year barring the January outlier, and is projected to see Employment rise a further 20K, with the Unemployment Rate set to remain at its cyclical low of 5.8%, while Average Hourly Earnings are seen expected to edge up to 3.2% y/y, still just short of January's 3.3% high. In that respect the speech by BoC's Wilkins will be of interest to see whether she echoes the increased optimism of governor Poloz since the BoC's April meeting on the Canadian economic outlook. US Import and Export Prices are seen rising 0.5% and 0.4% m/m respectively, but are likely to be of largely academic interest, in so far as they follow the modest misses (relative to forecasts) on PPI and CPI. The sharp recovery seen in many EM currencies and above all the JPM EM bond index yesterday in the wake of what was a marginal miss in core CPI, heavily predicated by the drop in auto prices (-0.5% m/m) and a sharp drop in airfares (-2.7% m/m), with the latter almost certainly seeing a very sharp reversal next month, underlines that reach for yield and risk assets remains a key influence, which is more testament to lingering FOMO (fear of missing out) and TINA (there is no alternative) influences than a proper risk assessment - out of such complacency do accidents arise. Just for reference, Fed rate probabilities did not budge yesterday, and the Fed's current rate path is precisely why EM currencies and assets have been under a cloud of late, and just for reference neither did oil prices, which thanks to the Iran risk premium continue to climb ever higher.
Dentalfloss
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dax 13K lined up
Dentalfloss
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eurusd 1.1920 lining up
Dentalfloss
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usdjpy 109.25 lined up
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dollar selling off ..a tad
Dentalfloss
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in line with our massively overbought DXY
Dentalfloss
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dax...dump
excellent
in line with our slight negative bias on index
excellent
in line with our slight negative bias on index
Dentalfloss
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DAX...a different character
dax in our supp area
Dentalfloss
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dax..bounce from our supp area
excellent
excellent
Dentalfloss
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our supp area worked well for scapls
Dentalfloss
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dow in supp
Dentalfloss
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ditto nas and dax
Dentalfloss
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The Week Ahead - Preview: 14 to 18 May 2018
- A relatively busy run of activity data, above all from the US and China, and indeed G10 central bank speakers and EM rate decisions, should by rights give macro considerations the ascendancy in financial markets' firmament, but the myriad of prevailing political tensions stands ever ready to throw sand in the proverbial vaseline. The earnings season is winding down, and government bond supply is relatively modest.
- Activity data takes the reins next week from this week's run of inflation prints. Pride of place inevitably goes to US Retail Sales, with a rather more convincing pick-up from the Q1 weakness expected (0.4% m/m plus on all measures). Robust Manufacturing Average Weekly Hours (and surveyed output indices) predicate forecasts of 0.8% m/m for Manufacturing Output (vs March 0.1%), with the first round of sector surveys for May (NY/Philly Fed) seen edging down from April, but still signalling a solid pace of activity. Housing indicators (NAHB & Housing Starts) and Business Inventories also due. If forecasts indicating little change in y.t.d. terms for China's Retail Sales, Industrial Production and Fixed Asset Investment metrics are correct (though also ostensibly agnostic), then these are likely to have no more than a passing impact, thus keeping the focus very firmly on how China-US trade tensions evolve. Following on from the BoE's cuts to its inflation and wages forecasts in its Q2 Inflation Report, this week's labour data has rather less sensitivity given that the key near-term issue for its policy outlook is whether Q2 growth recovers from what is assumed to have been a primarily weather related stall in Q1. Be that as it may, Average Weekly Earnings are seen diverging modestly, with headline wages dipping to 2.7% y/y from 2.8%, while the ex-Bonus measure is expected to edge up to 2.9% y/y, close to the July 2015 cyclical peak of 3.0% in nominal terms, though in real terms this would only equate to +0.4% y/y. Otherwise Japanese and the second round of European Q1 GDP readings are on hand; for Japan very weak Household Spending data for March imparts downside risks to an expected flat q/q reading in real terms, or +0.1% in nominal terms, wherein Private Consumption is seen Flat q/q (Q4 +0.5%) and Business CapEx at 0.4% q/q. Germany heads the run of European Q1 GDP readings, with a modest slowdown to 0.4% q/q from 0.6% q/q (2.4% vs. 2.9% in y/y terms, while the other engines of EU growth in the CEE area are forecast as follows: Bulgaria 3.8% y/y (vs. 3.5%), Czech Rep. 0.7% q/q 4.8% y/y (vs 0.8%/5.5%), Hungary 1.0% q/q 4.1% y/y (vs 1.3%/4.4%), Poland 0.8% q/q 5.5% y/y (vs 0.5%/6.7%), Romania 1.3% q/q 3.8% y/y (vs 1.0%/3.5%), Slovakia 3.6% y/y (vs. 3.5%), with the second reading on Eurozone GDP seen unrevised at 0.4%/2.5%. Last but not least Norway's mainland Q1 GDP is projected at 0.6% q/q. In perspective terms, and notwithstanding some loss of momentum in core economies, the rather downbeat narrative around the Eurozone and EU on growth looks to be misplaced. Also on hand are Japanese core Machinery orders (f'cast -2.8% m/m after surging 8.2% in January and 2.1% in February), the German ZEW survey (expectations seen unchanged at -8.2, looks far too weak given 5.0% plus jump in DAX, Current Conditions seen 85.2 vs. 87.9). Canadian April CPI along with Australian Q1 Wages (seen unchanged at 0.6% q/q 2.1% y/y, way off the RBA's objective of 4.0%) and April Employment (f'cast +20K) round off the run of major data. On the EM data run, the likely ugly Turkish Q1 Current Account (consensus little changed $-4.1 Bln) and a pick-up in Indian CPI (f'cast 2.9%) and WPI (f'cast 4.4%) look to be the highlights.
- There may be no G10 rate decisions this week, but with 2 ECB conference and 1 BoE conference, and a deluge of Fed, ECB, BoE, Riksbank, BoC and RBA speakers throughout the week, there may be some market ennui by the time the end of the week arrives. In the EM space, Brazil's COPOM is seen cutting rates by a further 25 bps to a record low 6.25%, with the IPCA IBGE inflation measure still well below target at 2.76% y/y, and despite the steady decline in the BRL (vs USD) since February. The very wobbly Argentine Peso (ARS) leaves the BCRA in a quandary, given that the merit of hiking rates from the eye-watering 40% to support the ARS look to be more than dubious, though an IMF stand-by credit line may also not the kind of 'bear hug' that facilitates the execution pf President Macri's brave reform plans. Mexico's Banxico is likely to keep rates on hold at 7.50%, despite the recent slide in the MXN, given its monetary ammunition arsenal would be better preserved to deal with an adverse outcome to the current NAFTA talks. Thailand's BoT will be relieved that the recent bout of THB weakness has in the greater scheme of things proven to be largely inconsequential (particularly when compared to 1997/98), and with inflation still subdued, and growth still rather subpar, it will be happy to keep rates at the 1.50% level in place since April 2015. Indonesia's BI has mooted the scope for a rate hike in response to the IDR tumble, but a semblance of stability has returned, and the consensus looks for no change from the current 4.25%. In Africa, Egypt's CBE is expected to use the overall firmer EGP (despite a recent hiccough), a much stronger FX reserve profile and the steep fall in CPI (though the momentum appears to have stalled in April 13.1% y/y vs. March 13.3% and February 14.4% and end 2017 21.9%) to cut rates by 100 bps to 15.75%. Mauritius's central bank is also likely to keep rates on hold at 3.50%, with the wild card being the quarterly meeting of the Bank of Zambia, which probably considers itself lucky that the likes of Angola and Mozambique have hogged the spotlight over the past 2 years in southern Africa, allowing it to reduce rates down to their pre-2014 crisis levels, with perhaps some scope for a modest 25/50 bps cut from the current 9.75%.
- The corporate earnings season is winding down, but the likes of Allianz, AP Moller-Maersk, AstraZeneca, Cisco, Commerzbank, Credit Agricole, Deere & Co, Home Depot, National Grid, Noble, Richemont, RWE, Suez, Telecom Italia, Tencent, Vodafone & Walmart will all be reporting and offer plenty of focal points.
- The Eurozone dominates the Govt bond auction schedule with regular multi-tranche offerings in France and Spain, and a tiny EUR 2.0 Bln of German 10-yr Bund, while the US re-opens its 10-yr TIPS ($11 Bln). But perhaps of most interest will be the launch of a new UK ultra-long 2071 conventional Gilt, which as ever will see demand due to it being a major liquidity event, though against a backdrop of actuaries suggesting that the era of DBS pension schemes' demand for the liability related 'insurance' of ultra-long Gilts may be coming to an end, both due to the dwindling volume of DBS schemes, and indeed the fact that many have much shorter-term liabilities. The fact of the matter is that both conventional and index-linked 20-50 yr UK gilt yields have been artificially depressed by this regulatory driven demand for nearly two decades; should that demand 'dry up' (albeit gradually), then there will probably need to a sharp re-pricing of the long end of the UK curves at some stage (see attached charts).
..........................................................................
Marc Ostwald
Strategist
ADM Investor Services International
- A relatively busy run of activity data, above all from the US and China, and indeed G10 central bank speakers and EM rate decisions, should by rights give macro considerations the ascendancy in financial markets' firmament, but the myriad of prevailing political tensions stands ever ready to throw sand in the proverbial vaseline. The earnings season is winding down, and government bond supply is relatively modest.
- Activity data takes the reins next week from this week's run of inflation prints. Pride of place inevitably goes to US Retail Sales, with a rather more convincing pick-up from the Q1 weakness expected (0.4% m/m plus on all measures). Robust Manufacturing Average Weekly Hours (and surveyed output indices) predicate forecasts of 0.8% m/m for Manufacturing Output (vs March 0.1%), with the first round of sector surveys for May (NY/Philly Fed) seen edging down from April, but still signalling a solid pace of activity. Housing indicators (NAHB & Housing Starts) and Business Inventories also due. If forecasts indicating little change in y.t.d. terms for China's Retail Sales, Industrial Production and Fixed Asset Investment metrics are correct (though also ostensibly agnostic), then these are likely to have no more than a passing impact, thus keeping the focus very firmly on how China-US trade tensions evolve. Following on from the BoE's cuts to its inflation and wages forecasts in its Q2 Inflation Report, this week's labour data has rather less sensitivity given that the key near-term issue for its policy outlook is whether Q2 growth recovers from what is assumed to have been a primarily weather related stall in Q1. Be that as it may, Average Weekly Earnings are seen diverging modestly, with headline wages dipping to 2.7% y/y from 2.8%, while the ex-Bonus measure is expected to edge up to 2.9% y/y, close to the July 2015 cyclical peak of 3.0% in nominal terms, though in real terms this would only equate to +0.4% y/y. Otherwise Japanese and the second round of European Q1 GDP readings are on hand; for Japan very weak Household Spending data for March imparts downside risks to an expected flat q/q reading in real terms, or +0.1% in nominal terms, wherein Private Consumption is seen Flat q/q (Q4 +0.5%) and Business CapEx at 0.4% q/q. Germany heads the run of European Q1 GDP readings, with a modest slowdown to 0.4% q/q from 0.6% q/q (2.4% vs. 2.9% in y/y terms, while the other engines of EU growth in the CEE area are forecast as follows: Bulgaria 3.8% y/y (vs. 3.5%), Czech Rep. 0.7% q/q 4.8% y/y (vs 0.8%/5.5%), Hungary 1.0% q/q 4.1% y/y (vs 1.3%/4.4%), Poland 0.8% q/q 5.5% y/y (vs 0.5%/6.7%), Romania 1.3% q/q 3.8% y/y (vs 1.0%/3.5%), Slovakia 3.6% y/y (vs. 3.5%), with the second reading on Eurozone GDP seen unrevised at 0.4%/2.5%. Last but not least Norway's mainland Q1 GDP is projected at 0.6% q/q. In perspective terms, and notwithstanding some loss of momentum in core economies, the rather downbeat narrative around the Eurozone and EU on growth looks to be misplaced. Also on hand are Japanese core Machinery orders (f'cast -2.8% m/m after surging 8.2% in January and 2.1% in February), the German ZEW survey (expectations seen unchanged at -8.2, looks far too weak given 5.0% plus jump in DAX, Current Conditions seen 85.2 vs. 87.9). Canadian April CPI along with Australian Q1 Wages (seen unchanged at 0.6% q/q 2.1% y/y, way off the RBA's objective of 4.0%) and April Employment (f'cast +20K) round off the run of major data. On the EM data run, the likely ugly Turkish Q1 Current Account (consensus little changed $-4.1 Bln) and a pick-up in Indian CPI (f'cast 2.9%) and WPI (f'cast 4.4%) look to be the highlights.
- There may be no G10 rate decisions this week, but with 2 ECB conference and 1 BoE conference, and a deluge of Fed, ECB, BoE, Riksbank, BoC and RBA speakers throughout the week, there may be some market ennui by the time the end of the week arrives. In the EM space, Brazil's COPOM is seen cutting rates by a further 25 bps to a record low 6.25%, with the IPCA IBGE inflation measure still well below target at 2.76% y/y, and despite the steady decline in the BRL (vs USD) since February. The very wobbly Argentine Peso (ARS) leaves the BCRA in a quandary, given that the merit of hiking rates from the eye-watering 40% to support the ARS look to be more than dubious, though an IMF stand-by credit line may also not the kind of 'bear hug' that facilitates the execution pf President Macri's brave reform plans. Mexico's Banxico is likely to keep rates on hold at 7.50%, despite the recent slide in the MXN, given its monetary ammunition arsenal would be better preserved to deal with an adverse outcome to the current NAFTA talks. Thailand's BoT will be relieved that the recent bout of THB weakness has in the greater scheme of things proven to be largely inconsequential (particularly when compared to 1997/98), and with inflation still subdued, and growth still rather subpar, it will be happy to keep rates at the 1.50% level in place since April 2015. Indonesia's BI has mooted the scope for a rate hike in response to the IDR tumble, but a semblance of stability has returned, and the consensus looks for no change from the current 4.25%. In Africa, Egypt's CBE is expected to use the overall firmer EGP (despite a recent hiccough), a much stronger FX reserve profile and the steep fall in CPI (though the momentum appears to have stalled in April 13.1% y/y vs. March 13.3% and February 14.4% and end 2017 21.9%) to cut rates by 100 bps to 15.75%. Mauritius's central bank is also likely to keep rates on hold at 3.50%, with the wild card being the quarterly meeting of the Bank of Zambia, which probably considers itself lucky that the likes of Angola and Mozambique have hogged the spotlight over the past 2 years in southern Africa, allowing it to reduce rates down to their pre-2014 crisis levels, with perhaps some scope for a modest 25/50 bps cut from the current 9.75%.
- The corporate earnings season is winding down, but the likes of Allianz, AP Moller-Maersk, AstraZeneca, Cisco, Commerzbank, Credit Agricole, Deere & Co, Home Depot, National Grid, Noble, Richemont, RWE, Suez, Telecom Italia, Tencent, Vodafone & Walmart will all be reporting and offer plenty of focal points.
- The Eurozone dominates the Govt bond auction schedule with regular multi-tranche offerings in France and Spain, and a tiny EUR 2.0 Bln of German 10-yr Bund, while the US re-opens its 10-yr TIPS ($11 Bln). But perhaps of most interest will be the launch of a new UK ultra-long 2071 conventional Gilt, which as ever will see demand due to it being a major liquidity event, though against a backdrop of actuaries suggesting that the era of DBS pension schemes' demand for the liability related 'insurance' of ultra-long Gilts may be coming to an end, both due to the dwindling volume of DBS schemes, and indeed the fact that many have much shorter-term liabilities. The fact of the matter is that both conventional and index-linked 20-50 yr UK gilt yields have been artificially depressed by this regulatory driven demand for nearly two decades; should that demand 'dry up' (albeit gradually), then there will probably need to a sharp re-pricing of the long end of the UK curves at some stage (see attached charts).
..........................................................................
Marc Ostwald
Strategist
ADM Investor Services International
Dentalfloss
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Naz 100
can the trend be maintained..??
can the trend be maintained..??
Dentalfloss
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some areas marked
is it pulling back and starting a new downtrend
or
is it a minor bull flag and it shoots up to 7K
is it pulling back and starting a new downtrend
or
is it a minor bull flag and it shoots up to 7K
C
cantagril
Morning all,
Looking at EG - 15m chart bullish-ish...but I already missed the boat for a reasonable trade. I'm thinking of a move up to .8840 and then poss 70 but as we're now (07h40) already above 25 I think I'll be leaving that alone unless we get a p/b toward .8800 odd.
Looking at EG - 15m chart bullish-ish...but I already missed the boat for a reasonable trade. I'm thinking of a move up to .8840 and then poss 70 but as we're now (07h40) already above 25 I think I'll be leaving that alone unless we get a p/b toward .8800 odd.
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Dentalfloss
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mornin folks
mornin Sir Canta
mornin Sir Canta
Dentalfloss
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all eyes on US RETAIL SALES THIS WEEK........Mexican drug cartels reporting earnings
