Dentalfloss
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T"was
Trading with point and figure
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T"was
Dentalfloss
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EURUSD
buyers comin in...a tad
buyers comin in...a tad
Dentalfloss
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needs to bust out
Dentalfloss
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ya want 1.1616 area as supp om pullback
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1.2900 on cable as supp on p/b
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our supp area on Dow gettin a hanmmerin
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Digesting very dovish RBNZ, China inflation and Japan Orders, awaiting
US PPI as overarching trade and geopolitical tensions narrative continues
to dominate; US 30 yr sale and more corporate earnings
- US PPI: forecasts suggest minimal upward pressure, some upside risks,
and yr/yr rates still at 7 year highs
- China CPI/PPI: above forecasts but no signs of CNY or trade related
pressures, and underline why PBOC has engineered sharp drop in money
rates
- Japan Orders: big miss still leaves Q2 in positive territory, but
outlook for Q3 very downbeat
- Charts: US PPI headline and core yr/yr; China 7 day SHIBOR; USD 3-mth
LIBOR vs China 3-mth SHIBOR
..........................................................................
********************
** EVENTS PREVIEW **
********************
If markets were looking (but are they? Ed. 'where's Captain Kirk?') for substance on this week's macro calendar, then today is the cheeky chappy at the back of the school class screaming "Miss/Sir, please, please, please ask me!". That is probably a cast iron recipe for a 'whatever' type response, but the substance via way of the array of Japanese Machinery Orders, China CPI & PPI along with US PPI is all too obvious, with the overnight UK RICS House Price Balance and Mexico monthly CPI also requiring some attention. On the events side of the schedule, there are rate decisions in Serbia and more interestingly in the Philippines, where BSP has belatedly started to concede that it will need to be rather more aggressive in tightening policy, above all given the sharp acceleration in inflation (CPI 5.7% y/y vs. forecast 5.5%, June 52.%), with a pretty much 'bare minimum' 50 bps rate hike in the Overnight Borrowing Rate to 4.0% expected, and more likely to follow and indeed signalled. Govt bond supply sees the US follow Japan overnight with an $18.0 Bln 30-yr Treasury bond sales to round off a hefty week for US auctions, and indeed plenty of USD denominated corporate issuance, underlining that Fixed Income FMs are managing event/liquidity risk rather than credit risk. We have, as they say, been here before in 2005-2008, the car crash awaits, too many FMS (not the majority) manage 'other people's money' (and do not care) and are fixated on flows... the simple message being they are not really interested in an equity style assessment of credit risk, but rather the double headed hydra of 'inflow pressures' and the aversion above all in USD terms to 'cash' due to the ensuing investor question: 'I have a depo account.. I don't need yours (with its fat fee and processing costs), so why I am paying all these fees/charges??'
** U.S.A. - July PPI **
- If fireworks are required from US inflation data this week, then the consensus estimate of 0.2% m/m headline and core for unchanged 3.4% and 2.8% y/y readings are really not going to "cut the mustard" with markets, however the point remains is that these are the highest levels for both since 2011 (see charts). The forecast assumes (fairly obviously) that food and energy will effectively have zero impact, leaving the big wild card as ever in the Trade Services component (June 0.9% m/m, May 0.7% m/m), as the broader array of inputs continue to edge very gently higher, with some modest pressures due to tariffs, as well as transport sector bottlenecks, and by extension this is crimping on supply. The risks as such are skewed modestly to the upside of forecasts, above all given surveys continue to show prices paid indices at elevated levels. Weekly jobless claims continue to underscore a very tight labour market profile, and are seen little changed at 220K vs. prior week 218K.
** China - July CPI / PPI **
- While both CPI and PPI were above expectations, they were hardly indicative of any emergent pressures from trade tensions. Headline CPI at 0.3% m/m 2.1% y/y vs. forecast 2.0% y/y & June 1.9% was primarily taken higher by non-Food prices (0.3% m/m), though the y/y rate is still being heavily influenced by Pork prices (-9.6% y/y vs. June -12.8% & May -16.7%). PPI continued to ease back from the early year pressures, though at 4.6% y/y was slightly above expectations of 4.5% and June's 4.7%. While this had little or no market impact, which continues to be pushed back and forth by the divergent influences of trade tensions with the US, and on the other hand chatter about and hopes for fiscal stimulus. However the inflation data do underscore why the PBOC has stealthily engineered a very sharp fall in key money market rates, as can be seen in the two attached charts of 7-day SHIBOR and a comparison of USD 3-mth LIBOR with China 3-mth SHIBOR, both of which underline that where there had been some carry into CNY, this has largely been eliminated, and of itself has put the CNY under pressure, leaving aside any consideration of concerns of trade tensions or the outlook for the Chinese economy. It also underlines why the PBOC is nudging central govt to do more in the way of fiscal stimulus, given that it has already delivered in terms of easing money rates and selective RRR ratios.
** Japan - June Private Machinery Orders **
- Following on from the disappointing 3.7% m/m, the June Machinery Orders posted an even sharper 8.8% m/m decline to leave orders up just 0.3%, as against forecasts of -1.0% m/m and +10.5% y/y. The series is inherently volatile, and while today's data still leave Q2 Orders up 2.2% q/q, the fact that Q3 Orders are seen essentially flat at -0.3% implies a weak outlook for Q3 CapEx, and by implication that trade tensions would appear to be weighing on the outlook, as has been implies by recently monthly surveys.
From Marc Ostwald
US PPI as overarching trade and geopolitical tensions narrative continues
to dominate; US 30 yr sale and more corporate earnings
- US PPI: forecasts suggest minimal upward pressure, some upside risks,
and yr/yr rates still at 7 year highs
- China CPI/PPI: above forecasts but no signs of CNY or trade related
pressures, and underline why PBOC has engineered sharp drop in money
rates
- Japan Orders: big miss still leaves Q2 in positive territory, but
outlook for Q3 very downbeat
- Charts: US PPI headline and core yr/yr; China 7 day SHIBOR; USD 3-mth
LIBOR vs China 3-mth SHIBOR
..........................................................................
********************
** EVENTS PREVIEW **
********************
If markets were looking (but are they? Ed. 'where's Captain Kirk?') for substance on this week's macro calendar, then today is the cheeky chappy at the back of the school class screaming "Miss/Sir, please, please, please ask me!". That is probably a cast iron recipe for a 'whatever' type response, but the substance via way of the array of Japanese Machinery Orders, China CPI & PPI along with US PPI is all too obvious, with the overnight UK RICS House Price Balance and Mexico monthly CPI also requiring some attention. On the events side of the schedule, there are rate decisions in Serbia and more interestingly in the Philippines, where BSP has belatedly started to concede that it will need to be rather more aggressive in tightening policy, above all given the sharp acceleration in inflation (CPI 5.7% y/y vs. forecast 5.5%, June 52.%), with a pretty much 'bare minimum' 50 bps rate hike in the Overnight Borrowing Rate to 4.0% expected, and more likely to follow and indeed signalled. Govt bond supply sees the US follow Japan overnight with an $18.0 Bln 30-yr Treasury bond sales to round off a hefty week for US auctions, and indeed plenty of USD denominated corporate issuance, underlining that Fixed Income FMs are managing event/liquidity risk rather than credit risk. We have, as they say, been here before in 2005-2008, the car crash awaits, too many FMS (not the majority) manage 'other people's money' (and do not care) and are fixated on flows... the simple message being they are not really interested in an equity style assessment of credit risk, but rather the double headed hydra of 'inflow pressures' and the aversion above all in USD terms to 'cash' due to the ensuing investor question: 'I have a depo account.. I don't need yours (with its fat fee and processing costs), so why I am paying all these fees/charges??'
** U.S.A. - July PPI **
- If fireworks are required from US inflation data this week, then the consensus estimate of 0.2% m/m headline and core for unchanged 3.4% and 2.8% y/y readings are really not going to "cut the mustard" with markets, however the point remains is that these are the highest levels for both since 2011 (see charts). The forecast assumes (fairly obviously) that food and energy will effectively have zero impact, leaving the big wild card as ever in the Trade Services component (June 0.9% m/m, May 0.7% m/m), as the broader array of inputs continue to edge very gently higher, with some modest pressures due to tariffs, as well as transport sector bottlenecks, and by extension this is crimping on supply. The risks as such are skewed modestly to the upside of forecasts, above all given surveys continue to show prices paid indices at elevated levels. Weekly jobless claims continue to underscore a very tight labour market profile, and are seen little changed at 220K vs. prior week 218K.
** China - July CPI / PPI **
- While both CPI and PPI were above expectations, they were hardly indicative of any emergent pressures from trade tensions. Headline CPI at 0.3% m/m 2.1% y/y vs. forecast 2.0% y/y & June 1.9% was primarily taken higher by non-Food prices (0.3% m/m), though the y/y rate is still being heavily influenced by Pork prices (-9.6% y/y vs. June -12.8% & May -16.7%). PPI continued to ease back from the early year pressures, though at 4.6% y/y was slightly above expectations of 4.5% and June's 4.7%. While this had little or no market impact, which continues to be pushed back and forth by the divergent influences of trade tensions with the US, and on the other hand chatter about and hopes for fiscal stimulus. However the inflation data do underscore why the PBOC has stealthily engineered a very sharp fall in key money market rates, as can be seen in the two attached charts of 7-day SHIBOR and a comparison of USD 3-mth LIBOR with China 3-mth SHIBOR, both of which underline that where there had been some carry into CNY, this has largely been eliminated, and of itself has put the CNY under pressure, leaving aside any consideration of concerns of trade tensions or the outlook for the Chinese economy. It also underlines why the PBOC is nudging central govt to do more in the way of fiscal stimulus, given that it has already delivered in terms of easing money rates and selective RRR ratios.
** Japan - June Private Machinery Orders **
- Following on from the disappointing 3.7% m/m, the June Machinery Orders posted an even sharper 8.8% m/m decline to leave orders up just 0.3%, as against forecasts of -1.0% m/m and +10.5% y/y. The series is inherently volatile, and while today's data still leave Q2 Orders up 2.2% q/q, the fact that Q3 Orders are seen essentially flat at -0.3% implies a weak outlook for Q3 CapEx, and by implication that trade tensions would appear to be weighing on the outlook, as has been implies by recently monthly surveys.
From Marc Ostwald
Dentalfloss
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spx
our 2853 got supported
excellent stuff
our 2853 got supported
excellent stuff
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cable
bought
excellent stuff
bought
excellent stuff
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its there now
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above 12700 area is a dog
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starts at 12680 area
there now
there now
Dentalfloss
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yes sir
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Dax
Dentalfloss
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coiling
if it breaks lower....watch for rez at upper trendline area
if bears see that ..they will be in for a kill
if it breaks lower....watch for rez at upper trendline area
if bears see that ..they will be in for a kill
Dentalfloss
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Naz 100
7460 is a test of trend
7460 is a test of trend
Dentalfloss
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Naz 100
