Trading with point and figure

poss in supp now

3348dae.png
 
Ostwald, Marc
Attachments
08:18 (33 minutes ago)
to Marc

- Quiet start to busy week, data schedule a non-starter, weekend political
developments dominate: China stimulus, Italy debt downgrade and budget
negotiations with EU, cliff-edge Brexit situations, US withdrawal from
nuclear treaty, Saudi admission on Khashoggi murder; US corporate
earnings

- Week Ahead: US GDP & Durables along with surveys dominate data run

- Week Ahead: ECB & BOC meetings, Fed Beige and rash of speakers, rate
decisions in Indonesia, Norway, Russia, Sweden and Turkey

- Week Ahead: deluge of Q3 corporate earnings in US and Europe

- Week Ahead: US dominates government bond auction schedule

- Charts: Asia stocks performance, Italy 2 & 10-yr BTP yield, WTI Oil

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

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

For all that this is a busy week for data, events and corporate earnings, it will get off to a slow start, with little in the way of data of any note, outside of digesting Saturday's China Property Prices. Meanwhile the event landscape is a case of absorbing the run of the Italian debt downgrade by Moody's and the weekend and overnight political news. The China tax cut 'stimulus' has clearly given risk sentiment (above all equities and metals) in Asia something of a boost, but the offset from Brexit tensions in the cabinet, which looks to be increasingly cliff edge (as are the negotiations with the EU), the fall-out from the murder of Saudi journalist Khashoggi, the Trump administration decision to unilaterally withdraw from the short-range nuclear weapon treaty with Russia, the Australian govt's hevay defeat in the weekend by-election, and ongoing trade tensions offer a considerable offset. In terms of the corporate earnings, Halliburton, Hasbro and Kimberly-Clark are likely to be among those making the headlines.

Also:
Looking to forward to chatting with LeFonti.tv on their new international channel at 18.00 CET this evening
https://www.linkedin.com/feed/update/activity:6459467739219185664/

and if you are at a loose end this evening, then tune in to:
The N@ked Short Club with Dr. Stu and expert guests is broadcast live from Le Palais Des Ponzis in Avignon on Resonance- from 9-10pm, London time on 104.4FM in London, on Digital/DAB in London, Brighton and along the South Coast of England, plus via www.resonancefm.com, worldwide. https://www.linkedin.com/feed/update/activity:6459113531513151488/


RECAP - The Week Ahead - Preview: 22 to 26 October 2018

As is often the case in the fourth working week of the month, the data schedule is heavy on surveys, but light on major data, though there are the US advance Q3 GDP & Goods Trade Balance long with Durable Goods Orders and Tokyo CPI in Japan. A very busy week for central banks has ECB, Bank of Canada, Norges Bank and Riksbank policy meetings, and a long line of rate meetings in the EM, including Indonesia and Turkey. There are just short of 200 S&P 500 companies reporting Q3 earnings, and close to a 100 major companies in the UK and Europe reporting. The US dominates the govt bond auction schedule with $127 Bln total of 2, 5 & 7-yr Notes and 2-yr yr FRN, along with ca. $149 Bln of 1,2, 3 & 6-month T-bills, while the Eurozone has sales in Germany, Italy & Netherlands. The eternal themes of US politics and trade tensions, Brexit negotiations, the Italian budget stand-off and the de nouveau issue of the stamp duty burden on Spanish banks will offer the rest of the mood music. Other highlights on the political schedule include a summit on reforming the WTO, a first visit to China by a Japanese PM for seven years, the volume of absences from the Saudi "Davos in the Desert" conference as a result of the alleged murder of Khashoggi, and a meeting of top level US and Russian Security advisers, with next Sunday also bringing the second round of the Brazilian Presidential election and the state election in Germany's Hessen.

- US Q3 advance GDP gets tops billing with the consensus looking for a 3.4% SAAR rise (vs 4.2% in Q2), paced by another robust 3.2% SAAR gain in Personal Consumption (vs. Q2 3.8%), though also seeing a deceleration in nominal GDP from the heady 7.2% of Q2 to a still solid 5.7% (GDP deflator seen at 2.3% from 3.0%, core PCE Deflator 1.6% from 2.1%. The various regional Fed GDPnowcasts are far apart - NY at a lowly 2.1%, Atlanta 3.9% and St Louis at 4.5%. Outside of Personal Consumption, Business Investment should make another solid contribution, and Inventories are likely to make a positive contribution after weighing on the 3 previous quarters, and in a role reversal Net Exports are likely to deduct quite heavily. Residential housing investment will likely again be negative, though it should be borne in mind that the negative contributions in the past 3 quarters were in fact negligible (Q4 -0.04 ppts, Q1 -0.06 ppt and Q1 -0.05 ppt), as such the array of housing 'Cassandras' are best ignored. Otherwise Durable Goods are expected to see a drag from aircraft with headline seen at -1.2% (vs. August +4.4%), but core measures are projected to rebound 0.3/0.4% after prior flat and -0.9%; FHFA House Prices, Pending and New Home Sales are also due. Flash PMIs in the G7 are marginally (0.1/0.2) lower across the board, with the exception of the US Services PMI which is seen rebounding from an anomalous looking 53.5 to 54.0, and as ever the focus will be on Orders for Manufacturing, and price indices in the US measures, in the context of trade tensions and tariff impacts.

Germany's Ifo is forecast to dip to 103.2 from 103.7, but remain above July's low of 101.7, while the UK CBI Industrial Trends Orders component is seen at +2 from -1, though the focus given Brexit related uncertainties will be on the quarterly Business Optimism measures (seen at -5 from -3). In Japan, October Tokyo CPI is forecast to reach is best level at 1.5% y/y (Sept 1.2%) since the Sales tax bump of 2014/2015, but core measures are seen unchanged at 1.0% and 0.7% respectively, underlining that the BOJ's 2.0% target remains very elusive. Other highlights include preliminary Q3 GDP for South Korea, Eurozone M3 and Private Sector Credit, South African CPI, Brazil's IBGE IPCA-15 inflation and monthly GDP, the latter also due in Argentina and Mexico, along with numerous other national business and consumer surveys in the Europe.

- Another ECB meeting looms at which questions about Italy, and most probably Spain following stamp duty ruling (subject to yet another review according to reports today) may well eclipse monetary policy considerations. It is expected that the ECB will not want to burn its bridges and confirm that it will end QE in December, and it may discuss but not necessarily announce whether it is looking at conducting a 'twist' operation on its reinvestment. Of particular interest will be whether it refines its rates guidance (not before H2 2019), particularly following those comments from new council member Rehn suggesting he favours a rate hike in Q4, contingent on growth and inflation being broadly in line with staff projections. Despite the unexpectedly sharp drop in headline CPI (paced by an unwind of the airfare spike earlier in the summer) and the setback in Retail Sales, the Bank of Canada is still seen hiking rates by 25 bps to 1.75%, with the solid optimism seen in this week's BoC quarterly Business Outlook survey, along with strength in Q3 Personal Consumption underpinning expectations. But with inflation well behaved and wage growth dropping back from the elevated levels seen in H1, Poloz and Wilkins are likely to stress at the press conference that they remain data dependent, but still see further gradual rate increases; it will however be interesting to how BoC forecasts in the MPR are tweaked in the wake of the USMCA agreement. Any comments on the very weak level of Canadian West coast oil prices will also be watched. See also this video on ECB, BoC and Oil via Core Finance TV on Friday:
. The Fed also publishes its Beige Book, which is likely continue to indicate a solid pace of growth, with the focus as ever on business optimism and anecdotal evidence on prices, skills shortages, wages and extant or potential bottlenecks. There are also a raft of Fed speakers including vice chairman Clarida.

Rate meetings in Norway and Sweden are expected to see rates on hold, but a very close eye being kept on both central banks rate trajectories. Sweden's Riksbank has pencilled in an initial rate hike for its next meeting in December or February, the former would seem to be gaining some favour given that CPI is now clearly established just above target, though the very dovish tendencies of many council members advises against inking that in as an assumption. Norway's Norges Bank is expected to hold rates 0.75%, after hiking in September, and will likely continue to signal that a follow-up move will come in March 2019 with one further hike seen by the end of 2019.

In the EM space, Turkey's central bank will be very relieved that with the TRY rallying in the wake of the release of US Pastor Brunson, and oil prices pulling substantially from their highs, it can take its foot off the rate hike pedal despite another larger than expected surge in CPI and PPI in September, and more obviously focus on stabilizing the banking sector, and hope that the economy starts to recover from the recent shocks. Indonesia's central bank is also seen on hold at 5.75% after a cumulative 150 bps of hikes since May, this despite continued pressure on the IDR, even if it has stabilized over the past 10 days. Russia's Bank Rossi is also expected to hold rates at 7.50%, with the RUB rally alleviating some pressure, though perhaps not proving durable in the wake for the oil price. Governor Nabiullina suggested on Thursday that it will look a broad spectrum of factors in assessing the rate outlook at the policy meeting, and noted that it would look to intervene in either or both of FX and govt bond markets in case of market volatility. There are also rate decisions elsewhere in the EM space in Botswana, Colombia, Fiji, Mozambique, Namibia, Tajikistan and Ukraine, the latter also crawling back into the EM limelight following Ukraine PM comments on Friday suggesting that it 'could default if co-operation with IMF ends'.

- For corporate earnings highlights in Europe and the US which are too numerous to list, please see the calendar in Friday's Week Ahead Preview & highlights.


from Marc Ostwald
 
You must log in or register to reply here.

Similar threads

Michael Carr
  • Article
Equities Technical Analysis Testing Point & Figure Patterns
Replies
0
Views
3K
T2W Bot
T2W Bot
S
Point&Figure
2
Replies
39
Views
7K
subarashi
S
M
Point and Figure
Replies
2
Views
1K
Dentalfloss
Dentalfloss
A
Point and Figure box size for commodities
Replies
4
Views
4K
TWI
TWI
William Rafter
  • Article
Technical Analysis Point & Figure Gone High Tech
Replies
18
Views
9K
GruntnoWay
G
Top