Dentalfloss
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mornin folks
Trading with point and figure
- Thread starter Dentalfloss
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Dentalfloss
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Dax into the open
Dentalfloss
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range shows up nicely
11850 area is horizontal supp
12100 area is prev supp/poss rez
ECB today...anything could happen
11850 area is horizontal supp
12100 area is prev supp/poss rez
ECB today...anything could happen
Dentalfloss
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pop those green areas..??
Dentalfloss
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now we have a decent idea of where support and rez lies
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Close up
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12025 area for a pump or dump
Dentalfloss
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eurusd
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Cable
poss turning down..a tad
poss turning down..a tad
Dentalfloss
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oil
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and out
Dentalfloss
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our red line became supp
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updated
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price pulled back at 12046 and we got anew breakout point/purple
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overshot our rez/green
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decent start
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updated
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12073 area/aqua now a pump or dump
supp is green and purple areas
supp is green and purple areas
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Ostwald, Marc
Attachments
08:34 (16 minutes ago)
to Marc
- Very busy day for data and events: Beige Book, hawkish Brainard speech,
strong Japan Orders and Oz Employment to digest, but likely overshadowed
by US invite to China for new trade talks; ahead US CPI, rate meetings in
UK, Turkey and Eurozone; IMF sovereign Debt Conference and IEA Oil
Market report; bond auctions in Italy and USA
- Fed: Beige Book points to strong growth, and underlines could be stronger,
Brainard speech leans strongly to raising rates gradually to restrictive
levels
- BoE: no policy changes expected, and unlikely to offer any fresh insights
into outlook; BoE Agents reports likely to be most interesting element
- ECB: focus on staff forecasts, slightly lower near-term GDP forecast
to be offset by lower Unemployment, perhaps higher wages estimates, CPI
trajectory likely to be hold; likely to maintain rate guidance
- Turkey rates: TCMB expected to deliver on promise of 'forceful' response
to CPI surge, but views highly divergent; sharp hike may stop TRY rot
short-term, but does not resolve any underlying problems
- US CPI: Energy likely neutral, Housing, Cars and Health Care likely to
exercise upward pressure, PPI data implies drag from Apparel and Air
Fares; y/y seen moving sideways
- Charts/Tables: USD/TRY, Fed, ECB and BOE rate expectations by meeting
..........................................................................
********************
** EVENTS PREVIEW **
********************
So we come to the 'business end' of the week, with a number of key data points (Japan Orders, Australia Unemployment, UK RICS & US CPI) accompanied by BOE, ECB and TCMB (Turkey) policy meetings, the IEA monthly Oil Market report (following OPEC's modest downward revisions to oil demand growth) and the start of the IMF Sovereign Debt Conference, along with govt bond auctions in Italy, Ireland and the USA. That said, politics and trade tensions related headlines will continue to exercise greater influence, as demonstrated by the commodity relief rally yesterday on the back of the news of the Us invitation to China for a fresh round of trade talks 'in the near future'. In terms of the BoE's MPC, this is a non-inflation report meeting, and with Carney and his MPC colleagues having just testified on policy last week, it appears unlikely that the statement and minutes of the meeting will offer much in the way of fresh insights into the policy outlook, and all the more so given the hither and thither as Brexit negotiations reach their crescendo point.
As for the overnight run of data, plenty of good news coming from Asia, with Japanese posting a very strong 11.0% m/m rebound in Machinery Orders after sliding 8.8% in June, and per se suggesting that Q2's CapEx surge was not a 'one-off' or heavily overstated in trend terms even if weather and natural disaster effects hint at a potential contraction in Q3 GDP. Australian Labour data were robust once again (Employment 44k, paced by Full-time Jobs +33.7K), but as yet there are few signs that wage growth is accelerating. Therd Fed's Beige Book was unsurprising in many respects, underlining solid growth momentum, but also highlighting that it could be even stronger given some companies are postponing investment decisions due to trade tariffs/tensions and that widespread labour shortages are also restraining growth. However it is the once dovish Brainard's rather hawkish speech suggesting the Fed will need to get policy rates to a level that is restrictive, which perhaps requires most attention, as markets continue to discount the FOMC getting to the neutral level and stopping, see: https://www.federalreserve.gov/newsevents/speech/brainard20180912a.htm
** Eurozone - ECB council meeting **
- Today's meeting is unlikely, and not expected, to deliver any fireworks on the policy outlook, though it will see a fresh round of quarterly staff economic forecasts. While the statement will doubtless express continued optimism on the economic outlook, it will again stress that trade tensions are a very material downside risk, with recent German manufacturing and trade data implying that these may already be starting to crystallize. The rumour / 'sources' mill has been replete with suggestions that the staff GDP forecasts will be tweaked lower (i.e. -0.1 ppt for 2018, perhaps 2019) , which in truth is unsurprising, and mostly a case of acknowledging the sluggish rebound in Q2 GDP after Q1 weakness, above all in Germany and France. However forecasts for core CPI (most importantly 2019/20) are likely to be maintained, Unemployment forecasts should be revised lower (again a matter of recognizing incoming data), and wages forecasts at least maintained, if not revised higher. As such the council will continue to state that the risks to the outlook are 'balanced', and by extension imply no change to the more loosely formulated guidance that an initial rate hike remains pencilled in for Q3 2019, without being any more specific than in June. The question then is how these 'algo plagued 'markets react to the finer points of the overall forecast picture and policy outlook, with some volatility likely. The press conference will doubtless see plenty of questions about Italy (and perhaps Greece), as well as speculation about Draghi's successor, along with the usual array of questions on the staff forecasts and the implications for the policy outlook, the response to which may again to convey the message that the ECB is determined to chisel out more room for manoeuvre in policy terms, and be less specific with its guidance.
** Turkey - TCMB rate decision
- Turkey's TCMB has promised to deliver a forceful tightening after another abject set of inflation readings (CPI 17.9% y/y vs. June 15.85%, core CPI 17.22% y/y vs. June 15.1%) and persistent pressure on the TRY, with the consensus looking for a 325 bps rate hike to 21.0% on the benchmark 1-week repo Rate, anything less will compound the TRY's woes. It has to be added that there is a very wide range of forecasts (unchanged to +725 bps), which is unsurprising given that it is very unclear what would be 'forceful' enough to stem the TRY's slide, while at the same time recognizing that the economy has already slowed (Q2 5.2% y/y, and is expected to slow to 3.4% for 2018 as a whole (though end year CPI is now seen at 19.6% y/y vs a prior estimate of 16.45%). There is also the unfortunate precedent of July, when rates were left on hold as against expectations of a 100 bps hike, once again reinforcing the view that the TCMB is hostage to political pressure. While a decisive hike should help to stem the TRY slide, and prompt some further correction, the fact remains that it does nothing to resolve key issues: a) Turkey remains in a diplomatic clinch with the US, which has imposed sanctions; b) a chronic dependency on external financing, the cost of which has skyrocketed due to the TRY's 40 pct decline this year; c) little sign that the Erdogan govt will implement the sort of reforms that might turn the economy around; d) an inherent vulnerability to rising oil prices - all of which is only mitigated modestly by the fact of its geopolitically critical strategic position, both for NATO and the EU. That is however also a reminder that for all there are similarities between many of the EM countries whose currencies are under pressure, each one also has idiosyncratic risks, which in part serves to explain why the contagion has not been wholesale, along with the overarching aspect that this is still an age of still intense financial repression due to the low level of rates across much of the world, above all developed.
** U.S.A. - August CPI **
- CPI is seen up 0.3% m/m 2.8% y/y (vs July 0.2/2.9%) and core CPI 0.2% m/m 2.4% y/y (vs. July 0.2/2.4%), which would likely be interpreted by some as signalling inflation is peaking at current levels, and therefore does not put any pressure on the FOMC to up the pace of rate hikes, though it still reinforces the case for further 'gradual increases' (i.e. 2 further 25 bps hikes in 2018, as the market is largely discounting). The large miss on PPI (-0.1% m/m headline and ex-Food & Energy) yesterday was somewhat deceptive, in so far as it was paced by another steep drop in Trade Services (-0.9% m/m), with ex-Food, Energy & Trade measure rising 0.1% m/m to edge the y/y rate up to 2.9% from 2.8%, notably paced by a rise in healthcare services (0.3% m/m), with passenger cars also posting a 0.7% m/m rise, per se these support the headline consensus view. Housing (OER) is expected to continue to pressure the core, with the wildcards once again likely to be Apparel & Air Fares, with the PPI sub-indices implying some drag from both.
from Marc Ostwald
Attachments
08:34 (16 minutes ago)
to Marc
- Very busy day for data and events: Beige Book, hawkish Brainard speech,
strong Japan Orders and Oz Employment to digest, but likely overshadowed
by US invite to China for new trade talks; ahead US CPI, rate meetings in
UK, Turkey and Eurozone; IMF sovereign Debt Conference and IEA Oil
Market report; bond auctions in Italy and USA
- Fed: Beige Book points to strong growth, and underlines could be stronger,
Brainard speech leans strongly to raising rates gradually to restrictive
levels
- BoE: no policy changes expected, and unlikely to offer any fresh insights
into outlook; BoE Agents reports likely to be most interesting element
- ECB: focus on staff forecasts, slightly lower near-term GDP forecast
to be offset by lower Unemployment, perhaps higher wages estimates, CPI
trajectory likely to be hold; likely to maintain rate guidance
- Turkey rates: TCMB expected to deliver on promise of 'forceful' response
to CPI surge, but views highly divergent; sharp hike may stop TRY rot
short-term, but does not resolve any underlying problems
- US CPI: Energy likely neutral, Housing, Cars and Health Care likely to
exercise upward pressure, PPI data implies drag from Apparel and Air
Fares; y/y seen moving sideways
- Charts/Tables: USD/TRY, Fed, ECB and BOE rate expectations by meeting
..........................................................................
********************
** EVENTS PREVIEW **
********************
So we come to the 'business end' of the week, with a number of key data points (Japan Orders, Australia Unemployment, UK RICS & US CPI) accompanied by BOE, ECB and TCMB (Turkey) policy meetings, the IEA monthly Oil Market report (following OPEC's modest downward revisions to oil demand growth) and the start of the IMF Sovereign Debt Conference, along with govt bond auctions in Italy, Ireland and the USA. That said, politics and trade tensions related headlines will continue to exercise greater influence, as demonstrated by the commodity relief rally yesterday on the back of the news of the Us invitation to China for a fresh round of trade talks 'in the near future'. In terms of the BoE's MPC, this is a non-inflation report meeting, and with Carney and his MPC colleagues having just testified on policy last week, it appears unlikely that the statement and minutes of the meeting will offer much in the way of fresh insights into the policy outlook, and all the more so given the hither and thither as Brexit negotiations reach their crescendo point.
As for the overnight run of data, plenty of good news coming from Asia, with Japanese posting a very strong 11.0% m/m rebound in Machinery Orders after sliding 8.8% in June, and per se suggesting that Q2's CapEx surge was not a 'one-off' or heavily overstated in trend terms even if weather and natural disaster effects hint at a potential contraction in Q3 GDP. Australian Labour data were robust once again (Employment 44k, paced by Full-time Jobs +33.7K), but as yet there are few signs that wage growth is accelerating. Therd Fed's Beige Book was unsurprising in many respects, underlining solid growth momentum, but also highlighting that it could be even stronger given some companies are postponing investment decisions due to trade tariffs/tensions and that widespread labour shortages are also restraining growth. However it is the once dovish Brainard's rather hawkish speech suggesting the Fed will need to get policy rates to a level that is restrictive, which perhaps requires most attention, as markets continue to discount the FOMC getting to the neutral level and stopping, see: https://www.federalreserve.gov/newsevents/speech/brainard20180912a.htm
** Eurozone - ECB council meeting **
- Today's meeting is unlikely, and not expected, to deliver any fireworks on the policy outlook, though it will see a fresh round of quarterly staff economic forecasts. While the statement will doubtless express continued optimism on the economic outlook, it will again stress that trade tensions are a very material downside risk, with recent German manufacturing and trade data implying that these may already be starting to crystallize. The rumour / 'sources' mill has been replete with suggestions that the staff GDP forecasts will be tweaked lower (i.e. -0.1 ppt for 2018, perhaps 2019) , which in truth is unsurprising, and mostly a case of acknowledging the sluggish rebound in Q2 GDP after Q1 weakness, above all in Germany and France. However forecasts for core CPI (most importantly 2019/20) are likely to be maintained, Unemployment forecasts should be revised lower (again a matter of recognizing incoming data), and wages forecasts at least maintained, if not revised higher. As such the council will continue to state that the risks to the outlook are 'balanced', and by extension imply no change to the more loosely formulated guidance that an initial rate hike remains pencilled in for Q3 2019, without being any more specific than in June. The question then is how these 'algo plagued 'markets react to the finer points of the overall forecast picture and policy outlook, with some volatility likely. The press conference will doubtless see plenty of questions about Italy (and perhaps Greece), as well as speculation about Draghi's successor, along with the usual array of questions on the staff forecasts and the implications for the policy outlook, the response to which may again to convey the message that the ECB is determined to chisel out more room for manoeuvre in policy terms, and be less specific with its guidance.
** Turkey - TCMB rate decision
- Turkey's TCMB has promised to deliver a forceful tightening after another abject set of inflation readings (CPI 17.9% y/y vs. June 15.85%, core CPI 17.22% y/y vs. June 15.1%) and persistent pressure on the TRY, with the consensus looking for a 325 bps rate hike to 21.0% on the benchmark 1-week repo Rate, anything less will compound the TRY's woes. It has to be added that there is a very wide range of forecasts (unchanged to +725 bps), which is unsurprising given that it is very unclear what would be 'forceful' enough to stem the TRY's slide, while at the same time recognizing that the economy has already slowed (Q2 5.2% y/y, and is expected to slow to 3.4% for 2018 as a whole (though end year CPI is now seen at 19.6% y/y vs a prior estimate of 16.45%). There is also the unfortunate precedent of July, when rates were left on hold as against expectations of a 100 bps hike, once again reinforcing the view that the TCMB is hostage to political pressure. While a decisive hike should help to stem the TRY slide, and prompt some further correction, the fact remains that it does nothing to resolve key issues: a) Turkey remains in a diplomatic clinch with the US, which has imposed sanctions; b) a chronic dependency on external financing, the cost of which has skyrocketed due to the TRY's 40 pct decline this year; c) little sign that the Erdogan govt will implement the sort of reforms that might turn the economy around; d) an inherent vulnerability to rising oil prices - all of which is only mitigated modestly by the fact of its geopolitically critical strategic position, both for NATO and the EU. That is however also a reminder that for all there are similarities between many of the EM countries whose currencies are under pressure, each one also has idiosyncratic risks, which in part serves to explain why the contagion has not been wholesale, along with the overarching aspect that this is still an age of still intense financial repression due to the low level of rates across much of the world, above all developed.
** U.S.A. - August CPI **
- CPI is seen up 0.3% m/m 2.8% y/y (vs July 0.2/2.9%) and core CPI 0.2% m/m 2.4% y/y (vs. July 0.2/2.4%), which would likely be interpreted by some as signalling inflation is peaking at current levels, and therefore does not put any pressure on the FOMC to up the pace of rate hikes, though it still reinforces the case for further 'gradual increases' (i.e. 2 further 25 bps hikes in 2018, as the market is largely discounting). The large miss on PPI (-0.1% m/m headline and ex-Food & Energy) yesterday was somewhat deceptive, in so far as it was paced by another steep drop in Trade Services (-0.9% m/m), with ex-Food, Energy & Trade measure rising 0.1% m/m to edge the y/y rate up to 2.9% from 2.8%, notably paced by a rise in healthcare services (0.3% m/m), with passenger cars also posting a 0.7% m/m rise, per se these support the headline consensus view. Housing (OER) is expected to continue to pressure the core, with the wildcards once again likely to be Apparel & Air Fares, with the PPI sub-indices implying some drag from both.
from Marc Ostwald
