Trading with point and figure

NAZ 100

2dwenug.png
 
Digesting China data run, waiting UK PSNB, Canada CPI & Reatil Sales,
US Existing Home Sales, a smattering of fed speak and more corporate
earnings

- China: GDP dip rather unsurprising, continued strength in Private Sector
FAI and rise in Retail Sales the bright spots on monthly data;
rebalancing still very much the overarching theme, debt mountain still the
problem

- Canada: core CPI seen steady for an eighth month in a row, Retail Sales
seen slowing after recent strength

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

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

Another rather choppy week in terms of asset price movements draws to a close, with a goodly volume of first division statistics, plenty of central bank speakers and indeed corporate earnings. Leaving aside the generally high levels of scepticism about Chinese official data, above all GDP, it is debatable whether markets are in fact less interested in China's economic data, and rather more in dealing with the key issues of its accumulated debt mountain and ongoing trade tensions. Otherwise there are the 'as expected' Japan National CPI prints to digest ahead of UK PSNB (budget), Canadian CPI and Retail Sales, and US Existing Home Sales. In central bank terms, there was more (but nothing new) from Kuroda overnight, while ahead lie BoE's Carney and Fed's Bostic and Kaplan. Corporate earnings highlights seem likely to include Atlas Copco, Software AG, Telia & Volvo, while the US looks to Interpublic, Procter & Gamble, Schlumberger, State Street, USA Technologies and VF. Next week's data schedule is typically modest for the fourth week of the month, and dominated by surveys (including flash PMIs, Ifo and UK CBI) and US Durable Goods, while the Bank of Canada is expected to deliver a further 25 bps rate hike to 1.75%, the ECB to stand pat and the Fed publishes its Beige Book. very briefly on the China data run, GDP may have missed in y/y terms but was as expected in q/q terms at 1.6% q/q, while in terms of the monthly data, the pick-up in Retail Sales was encouraging at 9.2%, still quite weak, but much better aligned with anecdotal evidence, while the still very soft FAI headline reading continues to mask ongoing strength in Private Sector FAI, which was steady at 8.7% y/y

** Canada - September CPI / August Retail Sales **
- Markets are heavily discounting a BoC rate hike next week, as such today's data will have to spring some major downside surprises to dislodge expectations. Be that as it may headline CPI is seen up just 0.1% m/m which would see the y/y rate dip 0.1 ppt to a still well above target 2.7%, though core CPI is forecast to remain at or close to the 2.0% target for an eighth month in a row, thus underlining why the BoC has been far more focussed on activity and labour market indicators this year, as well as how the NAFTA/USMCA negotiations 'panned out'.

FWIW via LeFonti TV yesterday - various thoughts on Italy, Eurozone, Fed, Brexit, USD .... the interview starts at 2:05 (hrs:min) https://livestream.com/accounts/23351079/events/7073618/videos/182018582
NB this is a bilingual English / Italian broadcast

From Marc Ostwald
 
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