Trading with point and figure

Naz 100

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Ostwald, Marc
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08:14 (43 minutes ago)
to Marc

- Thin day for data once again: UK CBI Industrial Trends and US Richmond
& Philly Fed surveys: politics in focus - Brexit, Budget, US mid-terms,
and Erdogan presser on Khashoggi murder; BoE & Fed speakers, UK I-L 10yr
and US 2-yr; raft of corporate earnings; API Crude Inventories

- UK CBI Industrial Trends: focus on Business Optimism, seen little changed
for third quarter, despite Brexit uncertainties

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

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

The day's run of data offers slim pickings, though the events and corporate earnings schedules are plentiful. Statistically the UK CBI Industrial Trends Survey is accompanied by the advance Eurozone Consumer Confidence reading, while the US has the Philly Fed non-manufacturing Index and Richmond Fed surveys, while Latin America looks to Brazil's IBGE Inflation IPCA-15 and monthly GDP in Mexico. There are plenty of Fed (Bostic, Evens, Kashkari) and BoE speakers (Carney & Haldane), and the EU Commission will announce its procedural intentions on the Italian Budget, while the UK sells 10-yr Index-Linked Gilts and the US 2-yr T-Notes and 1 & 2 month T-Bills. In terms of corporate earnings, Randstad and Whitbread are likely to be among the headliners in Europe, while the US has 3M, Caterpillar, Harley-Davidson, Lockheed Martin, McDonald's, Paccar, Pulte, United Technologies and Verizon amongst others. Therefore outside of the earnings specific impacts, markets are likely to be left looking at the overarching themes, be that the hope associated with China's stimulus measures (which clearly do not mitigate the threat posed by its rapid debt accumulation), the Brexit cliff edge, Italy's budget tussle, the US threats to global trade and its now rapidly approaching mid-term elections, as well as 'where to next' for oil prices (with the API inventories data due this evening, having seen a treacherous 'draw' last week that was swiftly negated by the EIA data), above all given the ongoing investigation into the murder of Saudi journalist Khashoggi, and a press conference by Turkey's president Erdogan on the subject today. Overall volatility remains very elevated in both the US and Europe, though it is interesting to observe that the S&P500 is currently trading pretty much in lockstep with the US HY Bond Average Spread vs USTs (see charts).

In terms of the bits and bobs of data, the UK CBI Industrial Trends survey will primarily be of interest in terms of the quarterly Business Optimism measure, expected to edge down to -4 from -3, i.e. little changed for a third quarter in a row, which in the face of the myriad of Brexit uncertainties could be much worse. It is however rendered largely irrelevant by the Brexit negotiations drama. The US regional Fed surveys are likely to echo the strength seen in last week's NY & Philly Fed manufacturing surveys, and likely to be reprised in tomorrow's Fed Beige Book.


from Marc Ostwald
 
68.40-68.50 first rez area
68.00 horizontal support
turns nasty if 68.00 becomes rez
 
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