Trading with point and figure

dentist007 said:
SPX

kbvdix.png
Click to expand...

updated

last move only

2hhktba.png
 
if price pulls back and retests trendline..test price will be higher on aqua
lets see what happens
 
- Slightly busier day for data has higher than expected German PPI to digest
ahead of South Africa CPI, UK CBI Industrial Trends, US Current Account and
Existing Home Sales; Draghi, Powell, Kuroda & Lowe panel at ECB forum eyed,
rate decisions in Philippines, Thailand and Brazil; German 26-yr and
UK 10-yr I-L; US/China trade tensions cast long shadow

- South Africa CPI: seen steadying in middle of SARB target range, but recent
ZAR slide may pressure June/July readings

- UK CBI Trends survey; focus on selling prices amid renewed GBP drop and
some signs of pass through into PPI Output

- Philippines rates: BSP well behind the curve even with a hike today

- Brazil rates: BCB expected to hold, but may signal ready to hike if BRL
weakness gets renewed traction

- Charts: BRL/USD, PHP/USD and zAR/USD

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

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

There is a little more on the data schedule today, though whether any of German PPI (higher than expected at 0.5% m/m 2.7% y/y vs. prior 2.0%) y/y, the UK CBI Industrial Trends survey, US Q1 Current Account and Existing Home Sales will have any real impact on markets, which are understandably focussed on what the denouement for the US/China 'trade war' will end up being, is dubious. The exception to that at a domestic currency and asset level could well be South African CPI, though forecasts assume little in the way of additional upward pressure after the VAT increase predicated jump in April, with headline seen at 4.6% from 4.5% y/y, and core unchanged at 4.5% y/y, bang in the middle of the SARB's target range. That said July & August's data may tell a rather different story if the recent ZAR slide persists. Of the other items, the CBI Orders measure is seen little changed at 2 from 1, though the more interesting element will likely be Selling Prices given some signs of emergent pass through pressures from rising energy and commodity prices in last week's PPI Output, and recent GBP weakness vs. the USD. US Existing Home Sales are seen edging up 1.1% m/m to a very solid 5.52 Mln, perhaps assisted by a modestly improving profile to inventories, and the upward pressure on New Home prices due to rising lumber costs, noted in Monday's NAHB survey.

The final day of the ECB's Sintra Forum has as its highlight a panel discussion with the G-3 central bank chiefs Draghi, Kuroda and Powell along with RBA governor Lowe, while Villeroy and Nowotny also holding press conferences in their roles as national bank chiefs. In the EM space, there are rate decisions in Thailand, Philippines and Brazil, with Philippines's BSP highly likely to follow up last month's rate hike with another 25 bps hike, given persistent PHP weakness and a continued CPI climb (last 4.6% y/y), the latter underlining that even after a rate hike today, real rates will remain negative, which hardly seems appropriate given a robust pace of GDP (Q1 1.5% q/q 6.8% y/y). Brazil's BCB halted its long run of rate cuts at 6.50% at its last meeting, though it signalled that it retained an easing bias, but with IPCA-15 seen vaulting higher this week to 3.56% y/y from 2.7%, and the BRL suffering bouts of intense pressure (in no small part due to a very murky political outlook), it may well shift its rhetoric to a rather less accommodative footing. On the auction front, the UK sells a new 2028 Index- Linked Gilt and Germany somewhat unusually re-opens its 2044 Bund to the tune of EUR 1.5 Bln, which looks to be partly market liquidity management related; despite Germany's much reduced bond auction sizes due to its budget surplus, recent auctions of medium and long-dated Bunds have been very poorly attended, though not due to a real lack of demand, but the fact that the BFA/Bundesbank really need to reform the way that debt is sold via what is now a very arcane system.


from Marc Ostwald
 
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